No one wants to be in debt. Owing money to people or companies, is not an easy place to be. Past due bills, collections calls, and the stress that comes with them take a toll on a person - on a family. Debt can dishearten people, dissolve relationships and destroy your personal finances for years to come.
On some level we all know debt is toxic. But, the "buy now, pay later" mentality is so prevalent that according to www.debt.org, Americans owe a total of 11.4 trillion dollars in consumer debt.
Let's put it in perspective,
"What is a trillion dollars? These days the “t word” gets thrown around a lot, but do people really understand what it means? The simple answer is that one trillion is a one followed by twelve zeros. It’s a million million. It’s a thousand billion. A dollar bill is about 6 inches long. The earth is about 93 million miles from the sun.
A trillion dollar bills laid end-to-end would stretch further than the distance from the Earth to the Sun. If you spent $1 million a day – every day – since Jesus was born, you still would not have spent a trillion by now." Elite Daily, 2012
This is you, that tiny spec in red on the left, standing next to one trillion dollars in hundred dollar bills:
We're teased with credit card offers from the time we're teenagers. At the mall they tell us that we can save 10% on our purchase if we just sign up for their credit card. "No Money Down" is all the rage.
But what what does it really mean when we buy with credit? For starters, we put off the pain off the purchase until we get the bill later. This seems like a good thing - it feels good anyway, right. You've always wanted that new outfit, now you can have it. But, it makes it easier to buy more because we don't immediately feel the impact of our actions.
After that, if you're not immediately paying off your debt it means that the new shoes you bought for $100 are going to cost you way more than $100. Interest charges on credit cards add up quickly and if you're just paying the minimum monthly payment - it could take you months to pay off even a small purchase.
Taking it a step further, racking up debt can turn into a lifestyle. It's easy to do. And, according to the statistics most of us do it. Again, according to www.debt.org, "each household with a credit card carries more than $15,000 in credit card debt."
Debt can snowball quickly and get out of control faster that you can say, "Charge it!" When you take on debt you become accountable to the debt holder and if you don't do what they tell you to do it's going to cause bigger problems. The Bible says, "The rich rule over the poor, and the borrower is slave to the lender." Proverbs 22:7 NIV You're stuck doing what someone else wants you to do and you're not in control of your own finances anymore.
It's an innocent enough beginning and I suspect most people have good intentions to pay off their debt. But life happens. You can get sick or injured and miss a paycheck. Maybe one of your kids needs bailed out of a sticky situation. The dog gets sick. You name it. No one starts out thinking they'll get into debt problems. But, it happens.
So, you're in debt. What do you do? Well, the first thing is to stop spending money. Cut up those credit cards! Don't keep digging the hole deeper and deeper. You've got to stop.
Next, read almost everything you can get your hands on about getting out of debt. There are a lot of great resources out there and I'll give you two links to start out. I don't get paid to recommend these folks. My wife and I have used Dave Ramsey's "Total Money Makeover" and I can personally recommend it. And, I really like some things from Crown Financial, too.
Later on, I'll talk more about debt, bankruptcy, budgets, and home finances.
Len Hancock
Middletown Home Sales
Ph: 304-296-1900
email: lenh@mhswv.com
