In this day and age of rapidly rising prices, is it really possible to become debt free? Prices on everything including food, housing and education are increasing while salaries are not. The short and simple answer is yes, it’s absolutely possible to experience debt free living.
However, there’s no magic wand that some fairy godmother can give you in order to help you out along the way. The moment at which you become free from all of your debt is one of the best moments of your life, but it won’t come without some hard work along the way. You’ll be free from the debt collectors, monthly payments and will finally have extra money to spend and invest for your dreams and retirement.
What Can You Do Without Debt?
Once you are out of debt, you’ll find that you have lots of money left over once your regular expenses are paid each month. Imagine that you were paying $1,500 a month in payments on loans, credit cards and other debts. If you get it paid off by the time you are 35 and use that “found” money to invest until you retire at age 65, you’ll have over $1.2 million.
Of course this is assuming that you can get a return that averages five percent and that you contribute all $1,500 to that fund. Chances are, you’ll want to use some of the money for vacations, eating out or fixing up your house, but as time goes on, your income is also likely to go up and you may be able to eventually put away more than $1,500 a month.
Your situation may be different. You may only have $750 in monthly payments, or you might have $2,000, but the same idea still applies–the less you pay to others, the more money you’ll have to take care of yourself. But just imagine what it would feel like to have even a million dollars at retirement. It’s a pretty nice dream, a dream that can become a reality.
In order to make this a possibility, you’ll need to first “find” that extra money by means of paying it off. One of the best ways to do this is to work with a debt consolidation agency to settle your debts. You’ll find that this process works well because you have accountability with the agency that you work with, plus you are paying less overall because the debt settlement agents have worked with your creditors to reduce the amount that you owe. Most people who go through debt settlement become debt free in 24-48 months and notice a debt reduction of nearly 50 percent. This means that if you initially owed $50,000, you could end up paying as little as $25,000.
Your experience will vary since each person’s situation is unique. The more debt you have, the longer it will take to pay off, but you will find that you can reduce it by a larger percentage than someone who has less debt.
Some of the debts that can be reduced include credit cards, personal debt, business debt, collections, medical debt and repossessions.
Other debts such as IRS debt, student loans, government loans, secured debt, mortgages and car loans can not be reduced, and you’ll need to pay the full amount on them.
How To Become Debt Free And Get A Good Credit Score?
Debt settlement will also help to speed up the recovery of your credit score. Right now, you probably have poor credit and are anxious to get your credit score up in the high 700s so that you can get better interest rates and lower insurance premiums. The sooner you get your debt paid off, the sooner your credit score will go up.
Maybe you’ve heard that by settling your debts, you’ll cause your credit score to drop. This is true. Initially, your credit score will go down because you aren’t paying every penny of your debt. However, your debt to income ratio will drop, and that will help to increase your score.
You probably won’t even notice this temporary hit to your credit score, and it’s far better than going through bankruptcy. A bankruptcy will stay on your credit report for ten years while other accounts only stay on for seven years after they are paid off. Additionally, a bankruptcy can prevent you from getting some jobs, and you won’t be eligible for a mortgage for five to seven years after the bankruptcy is completed.
If you’re ready to build wealth and experience, the freedom of living debt free, contact us today to get more information about how you can get started on settling your debts. Fill out the simple form or give us a call and we’ll be happy to guide you through the process.