Recent studies show 70% of Americans are in debt. Some are in excessive debt while others are not. Some are comfortable with excessive debt, while others could never live with it. Why is excessive debt a “bad thing?” The problems are not only financial, excessive debt can cause terrible emotional stress and double or triple your original balance, due to interest. Therefore, it is necessary to set your debt free date now.
First, let’s start with the emotional stress. Having to think about excessive debts, for most people, causes excessive stress. Many of you will agree with that, from past experiences. Getting rid of debt-related stress makes you feel better, and feeling better leads to healthier living. For some of you, when debt is released, it is like getting a bolder off your back.
Another equally serious problem with debt is that it runs on auto-pilot, placing an individual in even more debt. How so, you say? There are two reasons, one is that most of us don’t pay attention to the interest included in our monthly payments, and the other is, many people don’t know, interest is compounded monthly. The fact interest charged is compounded monthly, means we pay more for our credit than most of us realize.
The longer the period of amortization of a loan, the longer it will take to pay off.
To alleviate excessive interest charges the remedy is to, get out of debt. How can you accomplish this without stress? For starters, it will definitely take very serious planning. Pull out your credit card bills. First, look at your monthly payment, then look at the portion that goes to interest only, make an additional monthly payment and designate it to “principle only”. This will help to widdle down your balance significantly.
Look at this example (these are approximate values, and this is a hypothetical situation):
Say you owe $10,000 on a credit card. Your interest rate is 15%. Use our Minimum Payment Credit Card Calculator to find out what additional payment you will have to pay in order to pay off your $10,000 credit card balance in 1 year, 2 years, 3 years and 4? Remember, you must stop using your credit card, (unless for dire emergencies), in order to pay it off. This goes for other bills as well.
Our Online Calculators to get you out of debt at Our Sister Site LiveRichCalculators: