I have been thinking about a few of my friends who have credit card debt and a couple of things spring into mind. Firstly, they seem to be living a very decent middle class American Lifestyle. By that I mean a nice house (most around $250,000 to $500,000). I also observed the following :<\/p>\n
1. Many are in the process of some major decorations on their home – whether it be doing their yard, installing a patio. And some are certainly taking out a home equity line of credit.<\/p>\n
2. Many have either bought or lease a new car – Here is another observation : Many of them are leasing new cars. I just wonder why don’t they a second hand car and take a loan? I’m sure it’s cheaper that way. And many of them are fancy foreign luxury cars as well!<\/p>\n
3. Most take “normal vacations” like renting an apartment at the beach or shore for a month. <\/p>\n
4. Many of them make purchases every month that goes into decorating their homes. <\/p>\n
So here’s what I’m wondering?<\/b> – If they are all have credit card debt, why don’t they make a little sacrifice and taking a less expensive vacation, get a second hand car or put off decorating or doing something with their homes?<\/p>\n
Now, many have told me that they are embarking on a debt reduction program – AKA – they are paying more than their minimum every month on their credit card bills and at some point in the future, they will pay off their credit card debt.<\/p>\n
So, you can’t say that they have no plan. It’s perhaps that looking at their existing lifestyle, they could perhaps be a little more aggressive in their debt reduction plan.<\/p>\n
So how about myself?<\/b> – Now firstly, I have no credit card debt. But I do have a mortgage and have just taken out an auto loan on my new lexus! And I sure do live a “normal lifestyle”, although my home is relatively new and unlike many people, I do not have many fix ups to do. <\/p>\n
But then, I keep wondering, if I sacrifice my lifestyle, I could pay off my mortgage faster and even perhaps reach my retirement goals earlier.<\/p>\n
Which brings us to the $6mm question: How Much Are You Willing To Sacrifice Your Lifestyle to Achieve Your Financial Goals?<\/b><\/p>\n
After thinking about it for a while, I realize that whether you have credit card debt or not, if you have a huge mortgage or not is irrelevant, we are have some financial goals to meet whether it is debt reduction, building an emergency fund and saving for retirement. <\/p>\n
The more sacrifice you make (in terms of lifestyle and money), the faster you will reach your goals. But having said that, I also feel that for some people, any heavy sacrifice may not be worth it. It may be the case that unless your income increases dramatically, putting too much of a crimp on one’s lifestyle may not be worth the effort (because we may end up living too frugally for our liking). <\/p>\n
What do you folks think about this?<\/p>\n","protected":false},"excerpt":{"rendered":"
I have been thinking about a few of my friends who have credit card debt and a couple of things spring into mind. Firstly, they seem to be living a very decent middle class American Lifestyle. By that I mean a nice house (most around $250,000 to $500,000). I also observed the following : 1. […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[15],"tags":[],"yoast_head":"\n