Debt versus savings


One of the issues that people discuss is debt. Most people have some kind of debt and many people that are in debt talk about getting out of debt. However many people don’t know how to get out of debt or where to begin. So I am wondering, how have you dealt with your debt?


3 thoughts on “Debt versus savings

  1. Pay less for rent. This may seem impossible to many young people, but it makes a huge difference. Say you’re paying $500 in rent. Move into an efficiency, get a roommate, or lengthen your commute by 15 minutes and all of a sudden you’re paying $350. Put that money into debt and start making a big dent without noticing a huge change in your lifestyle. (Triple these numbers if you live in the DC metro area.)
    I found it much easier to make this “one time” decision than to try to continuously cut spending in other areas. Let’s pretend that you eat out once a week for $20 and get one cup of Starbucks a week for $4 each time. If you give up eating out altogether and Starbucks altogether your quality of life has fallen significantly and you’ve only put $92 toward debt as opposed to the $150 from moving.

  2. No matter how you deal with debt every plan starts with sacrifice. If you are not willing to sacrifice something then any plan will most likely end up in failure. The most efficient way would be to lower your basic overhead cost and focus more on just needs instead of wants.

    • Most things in the US anyways are wants, you can live pretty inexpensively if you really want. However what I have witnessed is that people want their cake and eat it too. One of the guys I worked with at Sheetz was bragging about his extensive blue ray collections along with his 40 inch plasma and stereo surround sound system however he was being evicted from his house. I couldn’t figure out his priorities.
      Sacrifice is tough however the long term effects are very much worth it.

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