Who doesn’t love a life without debt? But given the number and amount of loans and mortgages these days we are neck deep in debt. Here are simple ways to live a credit and debt free life.
1. Save an emergency Fund
Most of the people use their credit cards as emergency funds. When there is an unexpected expense, the card acts as a rescuer in that case. Instead, you can use that money to build up an emergency fund, which will keep you out of debt when something unexpected comes up.
2. Save for goals
Once you are done with your emergency fund, you can start saving for other things. For that, you will need to set a goal and the amount it would take. Then prioritize your goals and start saving for them accordingly.
3. Get a debit card
When you make purchases online you will have to use a debit or a check card if it has name of a major company, say MasterCard or Visa. You can replace your credit card with a debit card and this would solve your problem too. So instead of buying stuff on credit it will be debited straight from your check account which means you need to have that much amount first.
4. Earn interest instead of paying it
The problem with debit and credit is that they involve interest rates which eat away your finances. So, instead you can make money by investing it. So, instead of suffering losses, your money that was once eaten away by interest in now garnering interest of its own and multiplying thus making you richer.
5. Buy a car on cash
It seems almost impossible given the high prices of cars these days but it is an effective method to save up on loans which in fact never seem to end. So you should make savings deposits and save up on all that loan you pay for your car which becomes rather double the price of the car through the term of loan.
6. Invest for retirement
This can actually be one of your savings goals. It never hurts to have money at a stage of life when you will not have a job. Rather, common sense in fact!
7. Travel without credit
If you think that you will not find a hotel room or a car without credit card then you are wrong. Many hotels and car rentals offer you the same services on cash too. You just need to find the right hotels.
8. Rent without credit
Generally people accept rents through credit checks only. But you can still use many other options instead of credit checks such as using large deposits.
9. Buy a home without credit
This would seem even more difficult than buying a car without credit. Sometimes, renting is a better option than actually buying one given the amount of mortgages involved.
10. Use PayPal online
Shopping online is very tempting and not very good for your credit card too. Instead use PayPal, this would ensure that you have the money in your account before making a purchase.
Simple steps such as these can make a big difference, provided you follow them.