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Eliminate Debts
By peace | October 18, 2007
Debt is a tool, and it works just like a lever. The word leverage is often used when people refer to debt, and that’s exactly how debt can operate. The more debt you have, the more buying power you control. However, many people in today’s world have gone crazy with debt, and this result is a record number of bankruptcies. Debt is fine if you know how to use it. You can use debts to leverage your home, and business as long as you can afford to cover the payments. However, you cannot use debts to leverage your self-image. Using debt to live in a lifestyle you cannot afford is wrong.
Two ways you can reduce debts are:
1. Use Low-interest Credit Cards
Compare and find credit cards with the lowest possible rates.
2. Refinance Your Mortgage
Shop around when mortgage rates drop to see if you can get a better fixed rate. If you plan to stay in your home for more than two years, and if you can improve your mortgage rate by as much as 2%, you should consider refinancing. This may reduce your mortgage payments and reduce the amount of money you spend each year on interest payments.
Many rich people pay cash for everything and avoid debt(except for their home mortgage). Instead of borrowing money to purchase an item, they wait until they save enough money to buy the item with cash. Save money for the things you want and pay cash.
