When I think of debt and credit card payments, I cringe. Having filed bankruptcy nearly 10 years ago, the lingering impacts of watching every cent of every pay check get sent out to creditors was heart wrenching. I never want to return to that place again, and if you are approaching that space, you can get out now!
People often get concerned about credit scores and building credit. College students are lion’s prey when it comes to the debt trap as banks send representatives to campuses offering free gifts in exchange for their signature and a shiny “buy now, pay later credit card.” The cycle begins. That first taste of perceived freedom can have devastating impact that won’t be erased very easily.
But what about those all important questions that make people flock to big banks for the big bucks?
“How do I build credit?”
“What about buying a house? A car?”
“How will I prove to banks that I’m worthy?”
Think about it. How will you prove to banks that you can borrow their money and pay them back? They want to know that you will pay them what you owe, plus the interest the loan will accrue. That’s how they make their money and that’s how they trap people.
So what’s a person to do? You run away as fast as you can. Avoid debt at all costs! If you learn to live without it, then you won’t miss it. So what if you don’t get a cash back reward? Who cares if you miss out on airline miles? It doesn’t matter if you get a rebate on groceries if you use that money up by making interest payments. There are many ways to live a happy life without credit. But how you ask?
- Buy your first car with cash. A beater as they call it. The idea is to have something to drive around in that will allow you to save up to pay cash for a nicer car later. Spend no more than $5000 on that vehicle.
- Keep detailed records of your rental history. You’ll need that information when its time to buy a house. There are some banks that can conduct manual underwriting when its time to take on a mortgage. That’s the only debt that is acceptable to accomplish your goals.
- While you’re renting, save up at least 20% for a down payment on a house. Who knows, you may eventually save enough to pay cash, depending on where you live and how much a modest house costs.
That’s it! What else do you really need credit for? Clothes? Pay cash. Vacations? Nope, pay cash. Rentals cars? They take debit cards nowadays. So there you have it! Don’t be a slave to credit card debt.
Gain financial freedom by avoiding the pitfalls of borrowing now and paying later. Take it from me. You are not missing out on anything!
Post your debt-free success story below. We’d love to hear how you have freed yourself from the chains of debt.
Happy Saving! Live well!