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5 Common Financial Debts And How To Improve Them

The Debt We Live With

In the western world, people are accustomed to debt. Many people believe that debt is necessary in order to live an ordinary life. Generally, right after high school, people get themselves into debt. This is because western cultures encourage a selfish spirit; people want what they want as soon as they want it. That type of entitled attitude leads people to buy things that they cannot afford with money that they do not have. Is there a way to live debt-free? What are some of the common debts that most people have, and how can you get out of them? Those are the questions that will be answered in the following article.

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Credit Card Debt

Credit card debt is one of the most common debts that exist today. People get into credit card debt for several reasons. Credit card debt can come from a variety of sources. Some people get into debt because they make frivolous purchases for things that they want. There are also individuals who use their credit cards to cover necessary expenses because they do not earn enough to cover their expenses. No matter what your reason may be, there are three great ways that you can get out of credit card debt. First of all, you can try to increase your income and pay off your debt with the extra money. Secondly, you can make a great budget and lower your expenses so that you can squeeze out extra money for your credit card payments. Third, you can try to get a credit card debt settlement. With a debt settlement, you can work out a plan to pay down your debt in a reasonable manner.

 

Hospital Debt

You must have an emergency fund because hospital bills are always unexpected. Even with an emergency fund, some hospital debt can not always be avoided. Often you may not know how much a procedure or even a simple check up can cost you, so it’s always good to have an understanding of your insurance and the price of care at the various clinics around you.  Most people do not know that you can generally get the hospital to either forgive fees or give a huge discount. Do not let this debt go into collections. Call the hospital and try to get them to give you some assistance. You must be persistent, there is help available.

 

Student Loans

Student loans are the bane of many professional’s existences. Student loans are some of the highest debts that a person can have. Some people think that it is impossible to pay off their student loans because of the amount and because of the interest, but that does not have to be the case. There are some great steps that you can take to pay off or avoid student loans completely.

First of all, try to get scholarships while you are still in high school so that you don’t have to pay the full amount. There are scholarships available for every student entering college. If you just search for scholarships, you can find so many for small things. There are some small scholarships that only need you to submit an essay in order to qualify for it. Apply for as many scholarships as you can, no matter how small, they will all help. You can also apply for FAFSA in the US which will help get you need-based scholarships and help you apply for financial loans.

Second, go to an in-state university. In-state universities are usually less expensive, and you can save money by living at home for free. Many university students don’t want to live at home, but it is a really great financial choice if you are struggling to pay for your education. This time in every student’s life is one of growth and compromise and there are many delicate financial decisions that must be made, maybe staying home will end up being the best decision for your financial security.

Third, work while you are in school. There are plenty of great students who are disciplined, and they work hard while they study in order to avoid student loan debt. Finally, if you already have student loan debt, try to keep a super low budget, and put a large amount of your fabulous income towards your loans in order to get them paid off as soon as possible.

 

Car Debt

The best way to get out of car debt is to make a good decision when you buy a car. A car should be affordable, and you do well to save for an affordable car that drives well instead of getting a car loan. If you are already in debt because of your car, consider selling it and reinvesting in an affordable car if it is too expensive. If you are determined to keep your car, you will either have to increase your income, tighten up your budget or use the debt snowball to pay it down as soon as possible. Since cars lose value as soon as you drive them off of the lot, do not consider a car to be an investment.

 

A Home Loan

Since most people will not be able to save up enough money to get a mortgage, you want to make sure that you buy a house that you can afford. If your mortgage payments are more than 30% of your income, you can’t afford the home. If you have an affordable home, try to get a 15-year mortgage, and pay as much of the principal off as you can.

 

You Can Live Debt Free

In spite of what popular opinion says, you can live debt-free. You just have to be determined to pay off your debt by any means possible. Increase your income, lower your expenses, make a budget, and you will reap the reward of a life that has more meaning and less stress. The more you know about how to live debt-free, the easier it will be for you to pay off your current debts and not accrue any more.

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