In order you to be able to live debt free you should learn and live by the ten commandments of debt reduction.
By following them you will assure yourself that you only spend what is needed.
1.
) Thou shall know the difference between a need and a want! - By knowing the difference between the two, you will only spend what you actually need and not spend money on what you want and you really don't need.
This will reduce drastically your monthly expenses.
You will have enough money left over to actually save some each month! 2.
) Thou shall not use the plastic known as credit cards to buy expensive items! - If you avoid buying high price items with your credit card, you wont have to pay interests on them.
Credit card interests can be high, as high as 30%.
Would you want to pay $1,300 for a $1,000 item? How about realistically, would you want to pay $130 for an item that costs $100? See why you shouldn't buy expensive items with your credit card.
3.
) Thou shall make a budget and strictly follow it! - By setting a budget for your self, you will not spend more than what you have budgeted for.
Creating a budget allows you to safely spend the amount you have carefully calculated.
This will help you stay out of debt and reduce your over all expenses.
4.
) Thou shall not desire your neighbors house, luxury car or big screen HDTV! - If you find yourself desiring them, you will find yourself using your credit card and violating commandment #2.
You don't want to do that, it is bad for debt reduction.
5.
) Thou shall save money for emergencies! - Face it, you never know when an emergency might occur.
I am not talking strictly about medical emergencies, I mean emergencies such as lay offs! If you get laid off and don't have some money saved up, what will you do until you find a new job? See the importance of saving money for emergencies? 6.
) Thou shall not spend more money than what you make! - People make a habit of spending more money than what they make.
This happens typically to people who abuse of commandments #2 and #4.
Avoid spending more than what you make.
Ideally, you should save 25% of what you make and WISELY spend the rest and save any extra that might be left over.
7.
) Thou shall not live beyond your means! - This means that you shouldn't impress other people by buying items you know you can't afford.
You want to show high class by buying a mink coat when you're making $8 an hour.
You know that is out of your means and you shouldn't engage in such actions.
It is bad for your ultimate goal of debt reduction.
8.
) Thou shall not apply for more credit cards! - The credit cards themselves are not evil.
You're the evil one as you will be tempted in using them and getting into more debt! Just don't do it.
9.
) Thou shall teach your children to manage money wisely! - You don't like being in the position you are with high debt and you will much less like seeing your children with high amounts of debt.
Teach them from a young age how to manage debt and they will grow up with a better understanding of debt management.
10.
) Thou shall never make late payments! - Making late payments ruins your credit.
You take a big hit on your credit score and you should look out for credit all the times.
By following them you will assure yourself that you only spend what is needed.
1.
) Thou shall know the difference between a need and a want! - By knowing the difference between the two, you will only spend what you actually need and not spend money on what you want and you really don't need.
This will reduce drastically your monthly expenses.
You will have enough money left over to actually save some each month! 2.
) Thou shall not use the plastic known as credit cards to buy expensive items! - If you avoid buying high price items with your credit card, you wont have to pay interests on them.
Credit card interests can be high, as high as 30%.
Would you want to pay $1,300 for a $1,000 item? How about realistically, would you want to pay $130 for an item that costs $100? See why you shouldn't buy expensive items with your credit card.
3.
) Thou shall make a budget and strictly follow it! - By setting a budget for your self, you will not spend more than what you have budgeted for.
Creating a budget allows you to safely spend the amount you have carefully calculated.
This will help you stay out of debt and reduce your over all expenses.
4.
) Thou shall not desire your neighbors house, luxury car or big screen HDTV! - If you find yourself desiring them, you will find yourself using your credit card and violating commandment #2.
You don't want to do that, it is bad for debt reduction.
5.
) Thou shall save money for emergencies! - Face it, you never know when an emergency might occur.
I am not talking strictly about medical emergencies, I mean emergencies such as lay offs! If you get laid off and don't have some money saved up, what will you do until you find a new job? See the importance of saving money for emergencies? 6.
) Thou shall not spend more money than what you make! - People make a habit of spending more money than what they make.
This happens typically to people who abuse of commandments #2 and #4.
Avoid spending more than what you make.
Ideally, you should save 25% of what you make and WISELY spend the rest and save any extra that might be left over.
7.
) Thou shall not live beyond your means! - This means that you shouldn't impress other people by buying items you know you can't afford.
You want to show high class by buying a mink coat when you're making $8 an hour.
You know that is out of your means and you shouldn't engage in such actions.
It is bad for your ultimate goal of debt reduction.
8.
) Thou shall not apply for more credit cards! - The credit cards themselves are not evil.
You're the evil one as you will be tempted in using them and getting into more debt! Just don't do it.
9.
) Thou shall teach your children to manage money wisely! - You don't like being in the position you are with high debt and you will much less like seeing your children with high amounts of debt.
Teach them from a young age how to manage debt and they will grow up with a better understanding of debt management.
10.
) Thou shall never make late payments! - Making late payments ruins your credit.
You take a big hit on your credit score and you should look out for credit all the times.
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