Debt and the Overwhelming Weight of It

In today’s society, debt can seem inevitable. Between student loans, credit cards, vehicle loans, mortgages, and more, debt can become an integral part of life. 80% of Americans have debt. With stats this high, debt really can be unavoidable. But the weight of that debt can be overbearing. What if there is a way to reduce that weight?

Debt as a crutch.

Many people use debt as a crutch, as a way to buy things they cannot afford. However, it doesn’t have to be this way. If we can learn to use our money to work for us, instead of letting it run away. This is the first step towards financial freedom – living below your means.

The first step to accomplishing this is by creating a budget. The budget allows you to see where your finances are, and where they should be going. It allows you to make adjustments to your spending and find room within your monthly spending. Once building a budget, you can also find tendencies to purchase on credit. For example, you can evaluate the types of transactions you typically put on your credit card instead of paying cash. You can evaluate your car loan and evaluate the types of vehicles you tend to purchase.

Once you learn about your habits, you can learn to break them. This is truly where financial freedom can happen when you begin to change your approach to money.

Guarantees the future.

Many times in counseling sessions with people, we have heard the excuse that they need to have a good amount of debt so that they can maintain their credit score. One person shared an example of needing to get a “secured” credit card because he had let all of his credit lapse and had no credit to show payment ability. Unfortunately, this is also a common misconception, which comes from a lack of financial literacy. Your credit score is your “debt score”, and shows how much of it you have. It is possible to maintain a good credit score with minimal payment history.

For example, a credit card, which is paid off every month and spent using a “cash mindset” and a mortgage can be sufficient to show payment history. If you have bad credit and have no way to provide credit history for a loan option, there are other options to show credibility in borrowing money. Rent payment history, job history, and account balance history can also assist with obtaining credit if you can find a flexible lender.

Regardless, you can maintain a decent credit score without maintaining a mountain of debt. It’s all about how you spend money. If you don’t spend your entire balance, maintain on-time payment history, and don’t take out excessive amounts of debt, you can keep a great score.

It’s not a necessity.

Despite common understanding, utilizing too much credit is not an inevitable part of life. You can have a healthy financial life, credit score, and even own a home or nice car, without an overwhelming mountain of debt. If you’re already in it, you can work towards becoming financially-free. Check out our series on paying off debt if you want to more about being financially-free.

What are your thoughts on debt? Do you feel as though it is an inevitable part of life? Or is there a better way to live? Let us know in the comments below.