Long-Term Debt – A Bad Thing or Not?

Wipe our Debt

Wipe our Debt (Photo credit: Images_of_Money)

Debt is nothing new to humanity. As a matter of fact, it has been out there ever since the Biblical times. And although debt on its own is not a sin, it can become a huge burden you have to face daily. Most of the people nowadays get indebted for various reasons: they take a student loan, a car loan or a mortgage loan. But are long-term debts really worth it in the end? Moreover, are they actually bad, or is it us who make them look so “evil”?

The short answer is this: no, long-term debts should not be an evil thing. After all, they are all about making a dream come true and about investing in your future. Leaving rent behind and living in your own home or investing in your education are, in fact, things you do for a better future (for you and your family).

So, how to actually manage long-term debts? How to keep yourself focused not only for a few months (like in the case of short-term debts), but for years?

The first thing you should do is to constantly remind yourself why you got there and how much it was worth it. A student loan can seem like a burden, especially if you are still in your 20s. But, in the end, it is something you had to do to increase your chances of better employment. In the same manner, buying a house is a long-term commitment to your lender that may feel like suffocating you at times. But then again, paying rent was not a good idea either.

To keep yourself focused, plan ahead everything. Decide exactly how much you have to pay and decide whether you would like to do it step-by-step (by paying off lower amounts of money to your lender at a time) or if you would like to get rid of it faster (and thus make larger payments to your lender each time).

Then, decide which cash loan you want to pay off first: the small ones or the big ones? Although it may seem like a good idea to start with the bigger ones, it may demotivate you over time. On the other hand though, starting with the small ones will make you feel like you are moving forward with the entire process.

Remember to reward yourself with each milestone you have reached. And no, this does not mean you should over-spend your money (and thus get into debt – again). Small things such as a dinner, a day out of the city spent with your family or purchasing a small item can make you feel a lot better about the entire debt-relieving process.

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