If you have ever watched television, listened to the radio or had a conversation with anyone, then you have definitely been influenced in some way by loans and debt.   Whether you realize it or not, you are constantly being shown how to accumulate debt in the easiest ways possible to get the lifestyle you think you deserve.

You shouldn’t feel bad if you have any of the types of loans I am about to talk about.  I was guilty of 3 out of the 5.  What I want you to realize is, just because these are common for some people to have, they are not going to be your normal anymore.  If you are working on getting out of debt, these will be the debts you pay off and never acquire again.

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The people around you (this includes family and friends) will think you are completely nuts if you refuse to have these debts.  When that happens, it means you are definitely on the right track!  Whether you are guilty of 1 or all 5 of these debts, you are not alone, and you can decide to not have them ever again.

1.  Personal Loan

Borrowing money from a friend or family member is a kind of debt.  This is such an easy one to overlook because it didn’t come with any contracts or interest.  It just feels like a nice thing someone did for you.  Guess what? This is a loan, which means this is debt.

Aside from the fact, you will have to pay them back, borrowing from friends or family can cause such a strain on the relationship.  Either the lender of the money will be judging your every action until they are paid back (is that a new sweater you are wearing? Did you buy that with the money I loaned you?), or you will feel guilty for not paying them back right away and avoid being around them.  See what I mean? Strained relationship.  Just don’t do it.

2.  Credit card use

How many times have I been told by people who use credit cards that it isn’t a big deal because they pay it off every month?  So many times! Here’s the thing, until you pay off the total you have accumulated on your card all month, everything that you purchased was purchased with borrowed money.

The benefits of maybe earning some points you can cash in for gift cards or travel miles is not worth the risk of you not paying it off in time.  If you have an intimate relationship with your credit card, you will likely lean on it when times get tough and start racking up the debt.  I have had people tell me I am not living my life correctly because I refuse to use a credit card.  Trust me, you are better off without one.  You do not need it to survive.

3.  Financing for personal or household items

Businesses are always trying to make money, and they do their best to accommodate the needs of their customers to get the sale.  This has led to the option to finance pretty much anything.  If you have a house you need to furnish you can finance couches, beds, dressers, washer, dryer, refrigerator, rugs.  You name it; you can finance it.

Our need for instant gratification has been met completely with the availability to get what we need to today and worry about paying for it tomorrow.  As an added incentive, most places run deals of 0% interest for 12-24 months.  What could be better?

This falls into the same family as credit cards.  Even if your intention is to pay the furniture off in one year with no interest, until it is paid off, you are living on borrowed money.  This is debt.  There is the risk of you not paying it off in time, and you typically could have negotiated a lower price if you had the cash for it up front.

4.  Student loans

This one is such a big deal.  From day one we are told borrowing money for education is necessary, and there is no other way to get through school unless you have a rich uncle to pay for it for you.  On top of that, student loans are considered “good debt” in the eyes of the bank.  You won’t be penalized for this debt, right?

Wrong!  Borrowing money for education is debt.  There is no good debt or bad debt; just debt.  This is such a normal part of our society now that people don’t even bat an eye when you tell them you have 5 figures of debt from school.

I have even talked to people who are struggling to make ends meet so they are going to take out student loans to get a degree to make more money.  This makes no sense!  Save for school.  Adding debt to your life, even if it is educational debt, is not the answer to becoming more successful.  Trust me, I basically stole 10 years of my financial future in the form of student loans to pay for 4 years of vet school.  Not. Worth. It……and I’m still looking for that rich uncle.

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5.  Car loans

Everyone needs a car to get to work and have a life.  What people don’t realize is, they don’t have to have a new car to meet their needs.  There are plenty of cars that would get them from point A to point B they could afford to buy with cash, they may just not like the look of them.

Instead, we finance cars based on what we can afford per month to have a “reliable” car we love the look of.  What we don’t realize is we end up paying for the car three times over and we are living on borrowed money.

Car debt is not a necessity.  Not owning your car puts you at risk for always being in debt and paying way too much for something that is going down in value every single day.  Save up $3,000-$,5000 to buy a used car and save yourself the $500/month payment toward something that will end up in a junkyard.

Related Post:  What Kind of Car Can You Actually Afford?

Why be normal?

Taking out loans is completely normal in our world.  We lack patience and want what we want right now.  Companies and businesses have been so good about providing us with what we want, we can now finance everything.  Personal loans, student debt, car loans and credit cards may be part of your friends’ and family’s lifestyle, but they won’t be part of yours anymore.

If you want to live debt free, these loans should be avoided.  I’m sure you could think of lots of reasons you need to do one or more of the above things, but there is really only one reason needed to remind you not to do it.  They are all trapping you in debt.

Change your mindset today.  If you have these debts, pay them off, and vow to never fall into that trap again.

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