Simplifying your life can give you more time for what you enjoy

Many people dream about the day they get out of debt. The day they pay off their credit cards. The day they pay off their car. The day they pay off their house. Financial self help books abound in advice on how to get rid of debt. Yet, the truth is, Americans are consistently in debt. Why the desire to be debt free?

Most realize that having no to little debt means they can semi or completely retire, reduce their work load and spend more time with their loved ones. However, it seems with each passing year, more and more Americans acquire more debt. They trade out their nearly paid off cars for new ones. They up-size to a newer and bigger home. They make large purchases on impulse, charging them to credit cards. Even when some have cash available, they end up spending it on comforts and luxuries. While each person can make their own decisions, if your goal is to simplify your life, work less and even retire early, getting out of debt is a key piece to the puzzle. How can you do that?

First, be reasonable with your purchases. Evaluate if you actually need something. Is it a necessity or a luxury? Don’t buy on impulse. Wait a few days after thinking about a purchase to see if you still feel the same way. You might be surprised.

Second, see if you can keep that car that you have nearly paid off. If your car is still running well and you’ve been maintaining it, be weary of clever marketing tactics! Remember, a new car loan is typically for 60 months or more – yes, that’s 5 years! Some even allow for 72 or 84 months – 6 or 7 years! These are significant debts to think about carefully!

Finally, a house payment is the biggest expense that someone can take on. If you have a house payment, you can do a few things. First, see if refinancing can save you money due to lower interest rates. Can you refinance with a 15 year loan? Can you make additional principle payments to help pay your house off faster?

Remember, the more debt you have, the more you are subject to economic changes. Loss or reduction of income can seriously affect if you can meet your obligations. Additionally, if you plan on working less, retiring or simply having more time, getting out of debt is something to consider.

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