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How To Avoid Debt At An Early Age

Student Debt

Debt is often treated as something that simply shows up without an announcement, attacking us when we least expect it. However, debt is completely and totally avoidable, if you are willing to take the proper precautions and make the correct decisions during the early stages of building your personal financial portfolio.

While there are a variety of methods that a person can use in order to eliminate debt once has it has been given an opportunity to build up, it is much simpler to avoid being placed in the situation in the first place. Certain decisions must be made with the future in mind, as opposed to being made in haste.

One of the first life decisions that people come across that lead to their ending up with crippling debt is where they will receive their secondary education. First of all, many students fall into the trap of going to college because they feel like it is the logical next step in their life, as opposed to going to pursue a passion or fulfill a lifelong dream.

If you are a person who falls into the latter category, it is important to think your decision through. Even though taking a year off after high school is considered to be unorthodox, it is a decision that can save you a bundle in the long run. Not only are you able to work and save money for when you do eventually decide to head off to college, but you are given the benefit of extra time to make your decision.

Students will often head off to school and be ready to come home by the end of their first year. This is a decision that can leave a person tens of thousands of dollars in the hole, before they have even had a chance to become a full-fledged adult. Starting off so far behind the 8 ball causes debt to become a snowball rolling downhill, crushing every dream and inspiration in its path.

Students who wish to attend a four year institution and already know what they would like to do for a living would do well to look into area junior colleges. Most junior colleges are accredited institutions that allow to take the same classes that you would at a more expensive academic institution for a much cheaper price. You can then transfer these credits to the college of your choice and significantly reduce your student loan costs.

Another great way for students to get a jump on debt is to work while they are in school and begin paying down their loans before they have actually graduated. This can make the process of obtaining a secondary education much more challenging, but it is worth it in the long run. What most students do not realize is that they will not start off their career making the big bucks.

During those early years of employment, when you are attempting to climb the corporate ladder, having paid down your loans while in school will seem like an even brighter decision than it was at the time. You will be the envy of all your coworkers.

A common mistake that is made by students who are fresh out of college and just entering the work force? Buying a house before they are truly ready to live in one and be able to handle each of the attendant expenses.

Sure, owning your own home is nice and for many, it can be the fulfillment of a lifelong dream. But in order to keep this dream from becoming a nightmare, it’s crucial that you consider every possible outcome before making a purchase that is going to impact your way of life on a variety of levels.

One of the most fallacious beliefs that circulates among young professionals is the idea that they can simply buy houses, then “flip” them if they wish to move or they no longer enjoy the location in which they are living.

House flipping is done by professionals, people who are not flipping the actual home they live in. It is a long process and typically involves a large investment and a great deal of patience. Even the best home flippers can be forced to wait years before finding the proper buyer, so your hopes of doing so in your spare time are slim to none.

If you wish to buy a home, do your due diligence and only make a purchase if you are alright with the idea of tying yourself to a geographic region for at least 30 years. Do not purchase a home just for the sake of purchasing a home, with the idea that you’ll sell it if you want to move.

Selling a home is a much more complicated process than most younger people imagine it to be and it can lead to you suffering a significant financial loss. Be prepared for all of the consequences that come with home ownership, or else you could end up with a serious amount of debt before you have even had a chance to learn the ways of the world.

Debt does not discriminate and happens to people of all ages. Companies prey on the naivete of youth and will lock you into predatory deals, regardless of how old you are. That’s why it is important to make the right choices during your younger years, so that you are not digging out from under them as you age.

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