The UGLY Side of Debt
And why a cash based lifestyle will save you.
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The Negative Aspects of Carrying Debt
High Interest Payments = Debt often comes with interest that compounds over time, meaning you pay far more than you originally borrowed. This is the trap that most people don’t see until AFTER they have been trapped and are working on a way out.
Lower Credit Score = High balances and missed payments can reduce your credit score, affecting your ability to get future loans or favorable rates. The worse your credit score, the higher you pay in interest… which means you pay more for the same things as someone with good credit.
Increased Stress and Anxiety = Constant financial pressure can lead to mental health issues, including chronic stress, insomnia, or depression. This can lead to hospitalization which = MEDICAL DEBT.. which equals more debt.
Limited Financial Freedom = Debt payments eat into your income, restricting your ability to invest, save, or spend on things you enjoy. This will become depressing. Ask anyone who’s been in this position before. Not being able to eat out or take a day off because you are in an uncomfortable amount of debt is not an appealing position to be in. Don’t put yourself there.
Reduced Emergency Readiness = Carrying debt usually means less money in savings, leaving you vulnerable in emergencies like job loss or medical bills. The rule of thumb is 6 months of your monthly expenses in your savings account for a rainy day. It’s hard to keep that up when you’re constantly making debt payments.
Relationship Strain = Money problems are a common cause of arguments and breakups in relationships and marriages. One of the leading causes of divorce is FINANCIAL STRAIN/ISSUES.
Delayed Life Goals = Debt can postpone buying a home, starting a business, or saving for retirement. It can even delay life milestones like having children.
Some Ways To Get Out Of Debt & Stay Out Of It
Create a Realistic Budget = Track your income and expenses, then assign every dollar a job—including debt payoff. Stick to it.
Use the Debt Snowball or Avalanche Method
Snowball: Pay off smallest debts first to build momentum. Watch this video with Dave Ramsey. He explains this well. If you owe $500 to one bank and then $2300 on a credit card, focus on paying off the $500 loan first to gain momentum then work on paying on the $2300.
Avalanche: Pay off highest-interest debts first to save the most money. For example, if you have two credit cards; one with a 25% interest rate and one with 15% interest rate, focus on paying down the card with the 25% interest rate FIRST because it is costing you the most money every month.
Cut Unnecessary Spending = Temporarily reduce discretionary expenses (like dining out, subscriptions, or impulse buys) and redirect that money to debt. If you don’t need it to survive, get rid of it. Getting out of debt is your main concern at this point. All fun can wait.
Increase Your Income = Take on a side hustle, sell unused items, or ask for a raise to accelerate debt payments. Do anything you possibly can. Upskilling to make more money should be your main priority if you can’t keep up with your basic monthly expenses.
Build an Emergency Fund = Even a small cushion ($500–$1,000) prevents you from going back into debt when unexpected expenses hit. Once you get there, don’t stop. Set incremental goals; $1500 then $2000, then $3000 and keep going until you hit 6 months. Then one full year of your monthly expenses in your high yield savings account for safe keeping.
Now we’re about to get into my FAVORITE part of today’s message. DEBT FREE AND LIVING ON CASH. I feel like everyone needs to get to this point in their life at some point (hopefully early 20s before you take on any loans). This lifestyle will teach you how to only live on what you make, NOT what you’re allowed to swipe for. As you gain a nice reserve to fall back on, taking on credit will be something you do after careful consideration and you probably won’t take it lightly.
Pros of Living a Cash-Based Lifestyle
Better Control Over Spending = When you pay with cash, you physically see the money leaving your hand, making you more conscious of every purchase. You can’t spend what you don’t have.
Avoids Interest and Debt = No credit cards = no interest charges, late fees, or accumulating debt. You only spend what you actually have.
Reduces Impulse Buying = Cash limits how much you can spend. If you don’t have enough on hand, you’re forced to think twice before buying.
Simplifies Budgeting = Using cash makes it easier to set spending limits for each category (like groceries, gas, entertainment). Many use the envelope system for this.
Encourages Saving = When you're not constantly paying off debt or interest, more of your income can go toward savings or investments.
Improves Financial Discipline = A cash lifestyle fosters long-term habits like patience, delayed gratification, and intentional spending.
Avoids Credit Card Fees and Risks = You sidestep late fees, annual fees, fraud risk, and the temptation to “buy now, pay later.”
No Credit Dependency = You learn to rely on your own resources, not borrowed money. This can be empowering and reduce financial stress.
Clearer View of Financial Health = If you can’t afford something without credit, it’s a clear signal to reevaluate your budget or savings plan.
Use these methods to save you from what is to come.