|
SolveYourProblem.com
Article Series: Debt Relief & Debt Consolidation
I Want To Get
Rid Of My Debt...NOW!
Don’t
Save When You Have Credit Card Debt
Humans are funny creatures. We don’t always
do what’s best for us – instead, we do what feels best, and
try to blank out any reasons why it might not be the best thing
to do. Maybe that’s why there are so many people who have both
savings and debts.
It’s a Matter of Psychology.
Yes, it feels better to save. Saving feels like building a
foundation for your future, while paying off debt feels like
throwing your money down a hole. That money is for the kids’
education, or for improving your house, or whatever else –
and it’s in an account earning a good rate of interest. What
could be wrong with that? Lots, if you have debt.
Don’t Be Fooled.
There are almost no savings accounts that offer interest rates
as high as the ones credit cards charge. Here’s a question:
if you have $10,000 in a savings account earning 5% per year
and $5,000 on a credit card at an interest rate of 20% per
year, how much money do you have? After just five years, the
answer is effectively $0 – your debt would have grown to around
$12,500, the same amount that your savings are now worth.
You might not believe it now, but it really is much better
to pay off your debt. If you used half your savings to pay
off that debt, you’d be in such a better position that it’s
really amazing. You avoid five years of compound interest on
the debt, but you still get to keep $5,000 in your savings
account, earning interest – after five years, that’s about
$6,380.
If you’d still rather keep your savings intact instead of
using them to pay off your debts, ask yourself this simple
question: is your pride worth $6,380 of your family’s money?
Think of Your Financial Health.
When you have enough money to pay off your debt, there’s absolutely
no reason to keep it. Debt is for people who don’t have the
money, and need to borrow it. Debt costs money, and savings
make money – you want as much of your finances as possible
to be savings, not debts. If your savings account and credit
card are with the same bank, then you’re effectively paying
for the privilege of borrowing your own money from them. Why
would you do that?
There are other benefits to paying off your debt with savings.
You’ll be less stressed about your debts, and your credit report
will show that you were able to pay everything back – getting
you a much better interest rate if you ever need to go into
debt again.
I know it can be hard. You
just have to remember that any money you’ve ‘saved’ hasn’t
really been saved at all. It is
money you should have been spending instead of making purchases
with a credit card. Yes, it feels much worse to spend money
thinking that you’re spending away your future – but always
remember that when you use a credit card to spend that same
money, you’re spending away your future, plus interest. Anyway,
if you’ve got the debt, then those savings have already been
spent – stop denying it to yourself.
Click here to discover my current SolveYourProblem recommendation and choice pick for the fastest, easiest and best debt relief solution you'll find anywhere. Get it and reward yourself with more cash in your pocket.
# # # # #
by SolveYourProblem.com
: 2006
> Home > Debt
Free Articles: Main Page
|
