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Gaining Control of Your Debts
The first feeling that we feel is that we hate debts, and if we could, the first thing we would do if we had extra money, would be to pay them off right away. From there on, we could tell ourselves that we are now only going to buy everything in straight cash and never become indebted again. But life in the real world is not like this. How many times have we reduced the debts in our credit cards, to then once again be stuck in the same situation? The wisest thing would be to take control of our debts looking forward. The system that is proposed is based in paying off the minimum amount required, even though this might sound strange. Most people desperately dedicate all their effort into paying off all their credit debts as quickly as they can. The problem is that years can go by, and it is not guaranteed that we will have taken care of them yet. The worse thing is that during this uncertain time we will be sacrificing the quality and joy of our every day lives. The most difficult thing to accept from this system is the contradiction that it has in itself, since for every person that knows about financial calculus they would say that the sooner one pays off the debt, the better. The problem is that there is not any way to guarantee that that specific difference of money will be effectively saved up, but that it will again get put into a mayor expense. The crucial point is that, in the meanwhile, while we are trying to get out of that debt in the least time possible, the quality of life starts to decline. If a person chose to pay out the minimum amount of the debts, the inevitable question is what happens to the interests that we are paying in the long term? After many years of spending almost all of our pay checks on trying to pay off debts, to save ourselves from those elevated interests, we probably will have not been able to save up one cent either. The theory that is preached by financial experts does not work in real life, because we are not capable of really materializing that payment capacity available in savings. At the margin of the paid interests, what matters is what does work.
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