Debt Free Living
5 Tips To
Get Out Of Debt
by Justin Koh
A few times I wonder what sort of credit system moved the global economy 200
years ago. If the intention of getting into a business is meant to 'help'
fulfill the needs and wants of someone, I don't see how credit card salesmen can
drove more people into debt and bankruptcy. Clearly most people fail to have a
good understanding of the increasingly sophisticated (and complicated) terms and
conditions behind the card they apply for, how it benefits the bank more than
the applicant and what the ubiquitous card is best used for.
The 'cashlessness' of the advanced world surely works its illusions into the
minds of those caught up in the disease of consumerism, who found it too easy to
buy anything anywhere with a flash of the card without realizing the interest
incurred to the bank every time a purchase is made. Before you get the math
right, you must get personal spending principles and habits right first, and
only then you will attain self-awareness and a conservative mindset that lights
up a red warning in your head just when you are about to make a purchasing
Here are 5 tips for you to get a head start:
1) It's not how much money you make (or spend); it's how you can keep. I didn't
say this. Robert Kiyosaki said it. Far too often poor people never carry
happiness within themselves and depend on external sources for their own
happiness, so they either buy to impress others or get a certain 'nice'
indulgent feeling for having new things. Mathematically speaking, if that new
thing does not serve a purpose or even a significant function, it is a wasted
2) Forget credit; get debit. A debit card is quite similar to your ATM card in
that it deducts directly from your account on purchase and can be used
worldwide. The credit card enables you to BORROW money from your bank to fulfill
a particularly expensive purchase provided you pay back the loan PLUS the
interest incurred in the form of monthly bills. Based on track record, if you
have always fulfilled your credit obligations, your credit ratings will get
better, leading to better protection and concessions. But unless you typically
deal with large transactions and understand your spendings cycle, you are better
off making your life simpler just knowing exactly where YOUR money--not the
bank's--goes if not into your account.
3) Be conscious of your financial balance. Do a monthly plan-and- review for
your savings and expenditure. Those items that you have to buy with your
card...how necessary and regular is it? Why is it an investment to you and to
other people like your family? What else can be cut down? Sometimes you must
realize your financial decisions do impact your immediate loved ones and this is
a significant consideration to take care of.
4) Use your card only for emergencies. I don't know how many times I've been
reminded by my elders but don't get rebellious for the sake of it.
5) If you are facing a tighter budget, you did better confront the problem
sooner than later. Discuss with your immediate loved ones and financial advisor
where the finer problems lie and they are sure to help, not to aggravate your
situation, because if it doesn't affect you, it will affect them and your
The debt problem is not one on a personal scale but a prevalent one worldwide.
It is a sickness infecting people who grow too worried witnessing the exorbitant
increase in the cost of living everywhere they go, whether it's in the New York
or Kuala Lumpur, so they keep on borrowing in order to 'stick their neck out'.
Wrong thinking: it becomes a vicious cycle that feeds on itself, pushing you
closer to losing it all than ever before.
Come one day, you finally wake up from your debt problem when the bank or
creditors start knocking on your door, and you don't want that to happen. Stop
being influenced by what goes on around you but to take good stock of your
financial attitude and well-being. You have a choice not to get involved with
your bank 'deeper' than you need. It's time to be happy living within your
means. Be grateful for what you have now and work the most out of your current
resources, then you will find better use for your pair of scissors than to cut
up credit cards.
Justin Koh is a freelance writer whose articles have appeared in most major
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