Even Albert Einstein recognized that knowledge isn't everything when he said, "Imagination is more important than knowledge.
" What did Einstein even mean by that? I think Time's person of the year 2010, Facebook co-founder Mark Zuckerburg hit the nail on the head by combining knowledge of programming and human social behavior with genius imagination.
Recent stats show that 1 in 10 people on the planet uses Facebook.
Even if you're not out to create the next Facebook, the idea here is that if you really want something, you can usually find a creative way to make it happen.
The same mentality can be applied to financial debt.
Though there are many debt relief options out there, the best may actually rest inside your mind.
Imagining what your life would be like sans debt, combined with knowledge and strategy can go a long way.
Here are some guidelines for broadening your perspective on squashing debt:
- Look beyond circumstances.
Excess debt is often caused by tough circumstances like death, divorce, job loss, and pay cuts.
If you stare at horrible circumstances, chances are you will stifle the imagination and perseverance it takes to work through life's storms. - Choose to learn a tough lesson.
Sometimes excess debt is accrued due to poor financial management and choices.
This is one area where knowledge really is key.
Without adequate understanding of your finances, it is incredibly easy to let ignorance be bliss. - Embrace moderation.
What do you really need to survive? It's most likely less than you think.
Take a look at monthly spending and cut frivolous expenses like excessively eating out, shopping, and making other unnecessary purchases. - Think about negotiating.
In some cases you may be able to negotiate a lower interest rate with your bank, especially if you have established relationships with a local branch manager and have a good banking history.
Before trying this, however, research whether or not your bank has done this in the past, and under what circumstances.
You may also be able to transfer balances to a credit card with a lower rate.
If you choose this option, be aware that the rate may rise after a certain introductory period - be sure to read the fine print. - Seek to pass on good spending habits to your children.
A great motivator to reduce debt and practice good spending habits is to teach your children the same.
You know the stress of not managing resources well, so why push the same onto your kids? You are most likely the first example they see. - Rise above the minimum payment trap.
Minimum payments are designed to keep you in debt longer.
They usually barely cover interest while applying a sparse amount to the original balance.
Even if you make 1.
5 times the minimum it will help you get out of debt faster.
You're not defined by your debt, but it sure will hold you back in life.
Get out of your comfort zone and put employ imagination and knowledge to come up with a debt-reduction strategy.
There really are no one-size fits all solutions, but living a debt free life is within your grasp.