by TJ Nelson

The term debt refers to something being owed, which is money in most cases. Living a debt free life is jeopardized everytime you charge up credit cards, get personal loans, finance a car, or even buying a home using a mortgage. No matter what way debt is accumulated, it is money that must be paid to the bank that provided the loan.

It can be pretty easy to get into debt, especially since loans, credit cards, and lines of credit make it possible to purchase items one cannot afford to buy with cash, since they are given the luxury of being able to pay it back over time. It can, however, turn into a serious problem when interest fees and other charges take place, because the individual is then required to pay back way more than the initial purchase. More and more fees are charged each month that there is a balance remaining on the account, which can turn into a huge mess that can leave individuals struggling for money.

The best way to live a debt free life is to avoid all credit cards and loans, but this is not always possible for middle class individuals. Credit accounts should be limited as much as possible, and only used for necessities rather than material items. Having a credit card for emergencies or a car loan is ideal, but having more than two to three open credit accounts can lead to serious debt that can be hard to get out of.

Once debt has accumulated, it can be hard to get out of it. Many think that paying the minimum monthly payment is all that is required, but it can actually take years to get a credit card or loan paid off this way. If possible, it is best to pay at least double the minimum payment each month, to ensure a small portion of the loan is actually being paid off. Because interest fees are charged each month, they usually cancel out the monthly payment and actually cause the balance to increase.