Debt and Living Within Your Means

As you know, debt just doesn't go away over night. It takes a long time to dramatically reduce debt if there is limited resources to pay it down quickly. We live in a push-button society where we want instant gratification, which easily leads to accumulating too much debt. Limited resources, and living beyond the available resources is the main reason why many end up over their head.

Debt has become a rising concern in our country and I don't believe many people take the potential consequences of debt seriously enough. Many Americans are working additional jobs beyond their full time positions to reduce their debt. Will the vicious cycle of acquiring more debt ever stop?

One way to not acquire too much debt is to never take on more than what one income within your household can handle, that is if you are living on two incomes. That way if things get out of hand the other spouse can take on work to eliminate the debt. That of course is not always possible so be cautious, and if you're single it obviously is not a strategy that you can apply.

The other downside to debt accumulation is that the more we borrow, the less we are able to acquire loans or credit at sensible rates. Many people are also using much of their equity to rid themselves of short-term debt, which destroys the potential nest egg we can accumulate from equity in our homes. Debt consolidation is therefore not always the best solution.

The worst case scenario for using ones home equity is taking on a larger mortgage than one can handle and finding themselves in a position facing foreclosure. The realestate market is now demonstrating the results from that occurring due to people who took on low rate mortgages, which were adjustable rate mortgages. Now that rates are going higher they find themselves with a mortgage too high to handle.

Take charge of your debt by charging less to begin with and set a goal to work your way out of it. By living within your means you may not have the most toys, but you'll sleep better at night then your neighbor who may be financially strapped. If you're serious about reducing your debts, start with some tips for reducing your debts.

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