Debt is a part of life for some of the most affluent people in the world. Debt is essentially a given in the economy. Financial markets deal in debt all the time and major companies that we know, such as Uber and even Tesla have debt ranging in the billions. This is often why some people also think that debt in their own lives is simply something they should accept. Yet, there are some types of debt that everyone can avoid and never come into contact with at all. Let’s explore three types of debt that you may think are commonplace, but you don’t actually have to ever take on.
Mortgage debt
This is something many of us believe right? Mortgage debt is just a given when buying a new house. Of course, this is something the lending market wants us to believe. Mortgages were designed to help everyone get onto the housing ladder, but they only became mainstream about 30-40 years ago. Many people simply saved up for a home until they could afford one outright. Since when did this become a pastime? You don’t have to take out a mortgage on your home if you can wait to buy it yourself. This does mean you will have less financial firepower in the short term, but if you have a stable job, discipline to save and can manage to rent an apartment for a couple of years, then you shouldn’t fear buying a home without a mortgage.
Student debt
Did you know that student debt in the United States is now the second-largest debt pile in the country? That’s right, it’s $1.7 trillion, outstripping credit card debt and even car loans. This has meant that for many students, they are up to the necks in debt that they are trying to pay off while also, trying to save for a house, pay rent, enjoy life by going on holiday, etc. One person by the name of Eli Munc found a way to avoid student debt as he entered into the marketing industry without a college degree. He believed that the marketing industry is so fluid and always changing, that the college curriculum would not be able to keep up and thus, provide him with skills that may not match his particular job.
Car loans
Car loans should be a thing of the past but here we are, people still believe they need to take out a loan to buy a car. The leasing market is far more advanced, as you can rent a car for 6-12 months and then either update your contract and continue on with the car dealer or just call it quits and end it. Not to mention, electric cars can now be leased so if you install a recharge station at home, you pay a few dollars for the energy and a few hundred dollars a month for the car itself. The savings are potentially huge.
These are just some of the ways you can avoid the most common forms of debt. You don’t have to get into a debt hole and just accept it. Think outside the box and form your path towards your purchases.