Removing Liabilities From Your Life
One of the challenges I see in living a frugal lifestyle is trying to find new ways to rid myself of liabilities, obligations, and monthly bills and expenses from my life. Here are some of the ways you can get to work on living a quality life on a limited budget by removing liabilities:
- Pay them off now-- goodbye forever, but sometimes easier said than done
- Consolidate them-- sometimes it makes easier to get your arms around the problem
- Divide and conquer-- the other side of the coin to the previous idea
- Suspend purchases immediately-- don't add to your liabilities while you are busy eliminating others
- Sell the thing that is creating the liability-- you will notice I didn't say sell the "asset" because it is the "things" we own that cost us the most
- Suspend the liability-- warehouse it for the time being
What does all of the above apply to? Fill in the blank. Just about any bill or expense you have can be eliminated . . .
Make some decisions and do something about them today!
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Categories: Money Savers, Personal Finance, Credit, Frugality
Tags: Personal Finance Ideas Frugality Goals Money Savers Debt Frugal Motivation How to ideas Tips Tricks Techniques Credit
These are examples of both strategic and tactical thinking. A very real concern about carrying so many obligations (liabilities) is that if we lose or reduce our income, then we have to change our lifestyle to match our diminished disposable income, or scramble to off load the liabilities.
As we get older, most of us should have fewer liabilities and more assets. That means we are eliminating the financial burdens as we go along. If we don't, then we wind up working right up until they put us in the ground. That sounds too much like slavery to me.
Tactical mistakes are made by getting involved in many of the financial "tar babies" that we encounter in life. Whether they can be eliminated quickly or not.
Good strategic thinking has us paying off the larger obligations as we head towards retirement. That way, our retirement income doesn't have to be nearly as robust as it was when we were working full time.
Another strategic move is to get rid of the liabilities (recurring expenses) by replacing (trading) them for something else. Growing your own food and generating your own electricity are two examples that eliminate an expense, and can also be used to produce an income. Sometimes these can be a good trade, as long as we don't make the tactical error of getting ourselves involved in something that is more costly over the long haul.
Clair
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