Debt Elimination 2

The First Step To Debt Elimination

Regardless of your personal and financial circumstances, your
education and your background, the chances are the first step
you need to take in debt elimination has to take place in your
mind. The Western mindset, especially in the US and UK, is
firmly fixed on consumer debt. It is the way you have been
reared in a debt ridden society.

To be realistic, let us assume that total debt elimination is
not practical, nor necessarily desirable, from a financial
point of view. The one major exception is in buying a house.
When you buy a house, very few people are likely to be in a
position to do so with cash. Unless they have inheritance, are
very wealthy, are moving down the house market, or moving from
an expensive to a cheap area, people buying a house will
require a mortgage.

There can be considerable financial gains in the long run from
taking on mortgage debt. Firstly, you have to live somewhere,
so living in your own home is more desirable than renting for
the rest of your life. Secondly, if you are lucky the capital
growth on the house over the years will increase your
underlying wealth, in a way that cannot happen with rented
accommodation, which has the opposite affect. So, let us
assume, for the purpose of this article, that by debt
elimination we mean the elimination of all your consumer debt,
except your home mortgage.

You may well find that, if you can change your mindset to be
against borrowing to feed your consumer desires, that mortgage
will be paid off much sooner than your average contemporaries.
When you reach that stage, then there is every possibility that
your debt elimination will become total, and your mindset will
be so changed that there is never a need to take on any new
debt.

Changing The Mindset To Support Debt Elimination

You are unlikely to find it easy to alter your attitude towards
consumer debt. After all, it is the way you have probably been
brought up, surrounded by easy credit. However, changing that
mindset is both possible and financially desirable; debt
elimination is achievable if you can successfully get through
this first stage in the process.

So, how do you change the way you think about debt? Now, I am
talking purely about consumer debt, not borrowing money to
start or expand a business; about using debt to satisfy your
material desires earlier than you can really afford them.
Business finance can, and often does, justify itself through
increasing your wealth at a faster rate than the interest
charges decrease your wealth.

Consumer debt, on the other hand, is guaranteed to reduce your
financial well being. When you borrow money to spend on
consumable items, such as holidays, and diminishing assets,
such as cars, then your wealth building is undermined; your
assets are reduced over time. That, really, is the key to
altering your mindset to favour the elimination of debt from
your life. You need to:

1. Be aware that consumer debt is not good for your financial
well being. You are increasing the bank's assets, and
decreasing your own, by spending on credit.

2. You need to resent the fact that the banks make money out of
you, when it should be the other way round. It's your hard
earned money we're talking about here.

By giving constant focus to those two things you may develop a
mindset that is shifting towards debt elimination. You can then
give yourself greater strength in your determination by
convincing yourself that, not only is debt elimination possible
in the long term, but it will bring with it many rewards:

1. You will feel financially comfortable and in control; it
really is a great feeling as those around you drown themselves
in debt.

2. Over the years you will accumulate significant wealth
compared to those earning the same amount but whose debt has
always been out of control.

3. You will be able to walk in to a travel agent and pay cash,
or debit card, for each vacation, while the person behind you
in the queue will probably pay by credit card and then struggle
the whole year to pay it off before the next vacation.

4. You will be able to walk into a car dealer and negotiate the
best possible price for a new car as a cash buyer, knowing that
the cash is your own and not the bank's.

5. You will be saving regularly for all your needs, while
paying off your mortgage within the term.

All the while, your wealth will be accumulating, not being
stripped bare by interest charges.

Imagine, in 10, or even 5, years' time, a comfortable financial
life with no pressures. You may not be a millionaire, but beside
your peer group you will be a beacon of financial stability and
growing wealth. It's a long term process, but once you have the
mindset, the journey can become a smooth one, with good planning
and determination. Debt elimination really can be the final
goal.

In the next article I will look at planning to eliminate debt.


About The Author: Roy Thomsitt is the owner and part author of
http://www.eliminate-credit-card-debt-now.com
===============================================================

Learn How To Get Out Of Debt, Using Only The Money You Already Earn And Not A Penny More! Learn how to put all the money you're wasting each and every month (Paying Interest) To Work for You!
Click Here For: Total Debt Elimination!