How to Be Debt Free- Loving Life Without the Anxieties of Debt

Perhaps one of the most inspiring debt-related stories would be the case of Suzette Scarborough, who graduated from Cornell University, have 19 different credit cards but was only $5000 in debt. This debt, which is unheard of in the most ordinary instances, is a sign that people can control their spending even when the most expensive money is for the taking.

The fatal turn

However, not everything had been rosy for Ms. Scarborough. She began to have a taste for the “finer” things in life, including expensive shopping sprees and expensive luxury cars. At the end of the spending tunnel, she suddenly found herself $32,000 in debt. She recalls sadly:

“I had the mind-set that I didn’t have to wait for what I wanted. I could have it now. By 1997, I was $32,000 in debt, including the $10,000 balance on my GEO Prism. I was making all of this money, but it was going to all of these banks.”

Scarborough had suffered a turn for the worse- because her expenditures increased far more than her monetary production. A simple way to reverse this is to simply let go of the consumerist impulse.

Debt traps

According to Mary Hunt, author of Debt-Proof Living: The Complete Guide to Living Financially Free:

“People often find themselves getting into secured debt, such as mortgage and car loans, which they can sell to get out of debt. But the dangerous types are unsecured debts such as credit cards and signature loans.”

These debt traps are often the most unstable and have the highest propensity for interest rate increases. Credit cards especially, have a nasty habit of suddenly hiking its interest rates depending on market conditions. Instead of just paying for a particular projected amount, the interest rate of your credit card debts will actually increase.

Eliminating debt

According to Kidwell and Steve Rhode, who co-founded Myvesta.org:

“Going into debt rarely happens overnight. It usually creeps up over a period of time. It starts out innocently with one credit card. Then a large home mortgage, vacations, and student loans. Before we know it, we are living from month-to-month and paycheck-to-paycheck.”

The elimination of debt would begin from the elimination of the spendthrift habit. It might be a difficult transition, but you will reap many rewards in the end. Early retirement just might be one of them.

According to Hunt, planning for the future is also affected by debt:

“Being in debt prevents a [financially secure] future. You are transferring your wealth to the creditor.”