‘Bad debt’ is a word to sent shivers down anyone’s spine. In the current economic crisis, if you have the sword of bad debt hanging above your head, you have every reason to worry.
Are you one of those individuals who are hopelessly trying to pay off debts, only to find the amount just won’t budge? If yes, we are just what you need to get a clear picture of your current situation. Read on.
Good Debt vs. Bad Debt
Well, if you always thought debt is an evil word, that’s not really the case. If the concept of ‘good debt’ is completely foreign to you, here’s what you need to know. A debt is good debt if you are getting something of value in return.
For instance, if you are investing in financial education or using money to purchase seminars, it’s good debt. You are gaining something that is worth more than the money you are spending on it.
In much the same way, if you have taken a loan to invest in a startup and have successfully created a source of passive income or an alternate channel for cash flow, it also accounts for a good debt.
On the flip side, when we talk about bad debt, it’s the money you unwittingly spend on unjustified or useless expenses such as for taking a vacation or buying clothes. This is the kind of debt you have to keep at an arm’s length.
Is Bad Debt A Risk Worth Taking?
Despite knowing how hard it is to establish footing in the recent turbulent economic climate, the problem is that we sacrifice our peace of mind for short-term pleasures. Instead of planning for a future free of financial mess, we enjoy the moment and end up jeopardizing our finances.
Freedom- Our Sole Focus
For any smart individual, the sole focus should be on pleasures that benefit an individual in the long run such as freedom. This freedom can only be accomplished through reaching all those financial goals and aspirations you have in your mind. In other words, if you are investing in the right areas, even debt can make you rich.
Earn More than You Burn- Control Spending To Spell Success
If you singular goal in life is to earn more without any regard to controlling your spending habits, you are doomed to financial crisis, frustration and goals that will never find their realization. That’s if you wish to completely eliminate bad debt, controlling your purse strings is the first trick you need to master.
You come first
When you are trying to overcome a mountain of accumulated debt, there’s one thing that you should never forget – you come first. For the freedom you truly seek, it is crucial that you set a certain amount of money aside each month. Promise yourself that this money will be used to improve your life.
You will use it to gain superior control over your money. Even when the money issues will give you a hard time, bear in mind that not only will you avoid spending recklessly, you will try to save as much money as possible without making any major sacrifices.
These little sacrifices will pay you off in the long run. You will feel empowered. You will drive satisfaction out of knowing you have actually done something to improve your financial situation. You and your family will enjoy immense benefits. In short, choose to be financially free and revel in the many benefits that this change has to offer.
You will have more time for family and friends. You will be more secure and will have choices in life more than you ever thought possible. So, are you ready to grow your investment portfolio? Are you ready to enjoy unlimited financial freedom? If yes, take the desired actions today.
