Debt can have an all round negative impact on your life. Despite this, social spending is built in such a way that it makes some sort of debt important and relevant in our lives. After all, you build credit history by taking on debt. It is natural for most people to have one form of debt or the other and it is essential if you ever need a loan that's absolutely unavoidable, like a house loan, since it's almost impossible to buy one without a loan or to study further and enhance one's job prospects. But debt is a habit, almost addictive like smoking or alcohol! After all, it's human nature to seek instant gratification, but debt solutions are available.
But the last few years, have forced millions of us to rethink our attitude towards debt. From a means of convenience and comfort, and instant happiness, it has led to misery, for a lot of us. Staying out of debt is now being seen as the new Zen state, the new path to Nirvana, the fresh road to happiness and peace of mind. (The collection agent not calling, wow, now that's happiness!)
As you trudge your way through loan repayments there are few strategies for you to stay out of debt, if you stick to the plan, forever. And when we say "out of debt", we meet bad and desperate situations. Anything that makes you lose sleep, gain weight, worry, and so on. Not the kind of debt that ties you to a job, that's normal.
What You Can Do
First of all, to start with, cut up your credit cards. Yes, you don't need ALL of them. Except one with a basic limit, you can even cap your limit on the credit card. Use this one you can use to buy gas and food-nothing else.
Commit to the living within your means. Easier said than done, we understand, but through small strategies, you can commit to living within your means. You can have a two-pronged approach towards this: a) Don't buy the little things you can do without b) Don't buy the big things you don't need.
The little things you can do without include your morning frappe, when the coffee from home is enough, take-away, where a meal from home would have been sufficient, purchasing DVDs, while you could have rented it and so on. The list is endless. These little things can make a big impact on your life. Calculate the dollars saved on your frappe for a month, now calculate it for a year. The big things you don't need include the flat screen television, a Play Station, a pair of Nikes… you get the drift.
With all that saved money, you build an emergency fund. So if you ever lose your job, you don't end up paying bills with your credit cards. Last but not the least, get a health insurance if you don't have one already.