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Debt Does Not Just Happen: Essential Clues to Watch For






     It is the vast majority of person's desire to live the American Dream. They desire to have the capability of purchasing everything they crave whenever they desire it. But, that good dream can turn into a terrible dream if you’re not careful. This could cause financial crisis or even forclosure. Debt might sneak up on you and strike you out when you may not expect it and when you are really vulnerable.

Getting into debt is not needed so that you can have the capibility to possess the items that you have to have or want. However, it is really too simple to get caught up in the trap of thinking that you need to have those items now, and most times that means charging those things on a credit card and/or getting some loans.

Aside from an I have to have mentality, the following are a couple of other warning signs that you might be in danger of a whole life with indebtedness.

One warning is that you do not have a budget. When you don’t possess full control of your money situation, you are in danger of going in indebtedness. A cash flow plan allows you to the freedom to tell your money the place it is going to go and then opens the special door to wealth. The key to keeping away from debt, while at the same time possessing the options to buy those luxuries you crave and have to have, is having the capability to save up for them and buy with cash.

Another sign is that you’re spending beyond your financial means. When you find yourself struggling to make ends meet every week, then you are living outside your capacity. When you notice more money escaping than coming in, you are at a greater risk of influenced to fall into debt in order to get the things you have to have.

A different signal is that you don’t have an emergency fund. Now that emergency fund is money put back for a rainy day. You need to have at the very least $1000 put away somewhere for tough times. Cash for food, weekends away, and routine car maintenance are not rainy day situations. You should have cash set aside for the aformentioned things. A real rainy day could be an unexpected hospitalization, a death in the family, or a car accident. When you don’t allocate a rainy day fund and a real emergency comes about, you just might be forced to getting in debt in order to take care of hospitalization expenditures or different situations.

A fourth indicator that you may be in a state of debt is that you believe you have to get in debt in order to get stronger credit. This is possibly the worst drawback in all where indebtedness is concerned. Your siblings and or other guardians have probably told you that you have to build your credit score so you can own those items that you need in this world. However, the real deal of the matter is that, you may have nice materials while not going into debt, including nice homes and cars. The method is budgeting, putting money back and proper planning so that you can purchase with actual money! You don’t need to pull out a loan and/or utilize a plastic card, even to buy the larger items. By seeing these critical signals, you should be able to avoid those deadly traps of indebtedness and be free to live a life without debt.




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Posted on 2013-05-11, By: *

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