Debt repayment

Five Ways to Avoid Debt You Don’t Need

Many experts would say debt is the modern-day form of slavery. Always having an open balance with creditors is a sure way to continue working throughout life much longer than you’d expect. Only certain debt is viewed this way while others are used as leverage to get ahead.

Consumer debt and debt from education are the main triggers to one’s financial struggles. Some debt that people typically accumulate can be avoided and alternative solutions are much better options.

Substantial Debt for Secondary Education Isn’t Necessary

Student loan debt in America is currently in the trillions of dollars and millions of Americans have no way to pay it back. Degrees are beginning to lose their value in the workplace, just ask Google. Employers are now valuing hands-on experience over book knowledge.

Only some degrees still hold the value that they always have had. Degrees that are necessary to earn are:

● Medical degrees

● Law degrees

● Engineering degrees

● Science degrees

● Psychology degrees

There are still other degrees that hold a requirement as well, but some companies or industries are beginning to look past it.

The average student loan debt is $39,451 in the United States and some citizens don’t earn a salary that high. Americans are anxiously waiting on student loan debt to be at least partially canceled if Biden and Congress reach that conclusion.

Secondary education is good to have for career development or building a business, but a more frugal approach should be considered. Opt for trade schools, self-education, or community college for the first 2 years of your college education. Don’t be the person with $100,000 in debt from a reputable university, but cannot get a career opportunity after graduation that pays even half of that.

Avoid Buying a Home Too Big for Your Income

Society gives the impression that if you’re a homeowner then you equate to a certain level of success. In actuality, you may have just put yourself in a substantial amount of unnecessary debt.

People complain about rising rental prices, but costs for owning a home could be the same if not more. Rent includes maintenance work and sometimes utilities. Owning a home could have a person paying a mortgage, mortgage insurance, personal property tax, and HOA fees.

To those who feel that at least a home is a property you own and that it’s an asset, consider this. Unless you plan on selling your home anytime soon or renting it out for income, the home you live in is a liability, not an asset. In addition, personal property taxes have to be paid whether the home is paid off or not. Therefore, real estate can only be a real asset to you if you can earn income from it.

Foreclosures can be a big hit on your credit score and even result in some filing bankruptcy for inability to pay. Consider renting if not financially ready to own a home. Especially if owning a home exceeds 30% of your gross monthly income.

Stop Impulsive Shopping

Consumers continued to get reeled in by retailers due to credit options, installment payments, and most importantly the opinions of others. Consumer debt is at a staggering $14.56 trillion in the US as of late 2020.

Stores offering credit cards have some of the highest interest rates and effective advertising is causing consumers to max out their credit cards. Over 50% of Americans are dealing with maxed-out credit cards from impulsive shopping or using them to make ends meet.

Do not make purchases without giving any thought. If you see something you want to buy, sit on that thought for a few days. Sometimes your feelings may have changed and you might find yourself no longer wanting the item. Focus on necessities and other things should just wait and be purchased as a reward to yourself.

Don’t Go on Vacations You Can’t Afford

The pandemic has everyone experiencing cabin fever and traveling is the most desired thing to do. The travel industry took a large hit and they are trying to advertising cheaper prices to get back to normal.

Airlines offer to accept buy now and pay later options now and travel agencies are still accepting installment payments to reserve vacation packages. Even though special offers and credit options are available for consumers, many cannot afford them due to financial struggles during the pandemic.

If you have a limited budget to travel, consider alternatives if you still can spare extra funds to do so. Consider driving instead of flying, going a shorter distance away, or even a shorter vacation stay. Don’t be the person that went on vacation but has to face financial obligations they cannot pay upon arriving back home.

Don’t Go for the Brand New Vehicle

Cars do not have to be brand new to be reliable. You’ll end up paying full price for a car when the value drops by thousands the minute you drive off the dealership lot. Car loans are simple interest loans which mean daily interest is accumulated based on the balance.

Opt for cars a couple of years older. Features are similar but the price is much different. It will also save you more in insurance and maintenance costs.

You Are Not Obligated to Keep Up with Those Around You

The ways to avoid debt are apparent, but it all falls at the financial discipline of the person. Prevent falling into societal standards and traps that could leave you in tens or hundreds of thousands in debt. Keeping up with the Joneses should never be considered. If it’s not a necessity, it’s not worth the high interest.

Author Bio: Lyle David Solomon is a licensed attorney in California. He has been affiliated with law firms in California, Nevada, and Arizona since 1991. As the principal attorney of Oak View Law Group, he gives advice and writes articles to help people solve their debt problems. You can connect with him on LinkedIn or tweet him @lyle_solomon.


Olha graduated from Brigham Young University - Idaho. She joined PocketGuard in 2022 as a digital marketing manager with a strong background in product marketing. Olha is focused on brand awareness ...

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