A Haiku - Debt
Debt is staggering.
One cure exists: the budget.
Assets may be used.
Burdened by debts?
American debt is staggering, and I'm not referring to the National Debt of nearly $18,000,000,000,000. I'm referring to personal debt (although admittedly each American is also ultimately responsible for their share of the National Debt!)
The chances are that someone in your immediate family is already staggered by personal debt.
The chances are that personal debt is not limited to just the car loan and the mortgage, but includes other secured and unsecured loans, especially the ubiquitous credit card debts that are so easy to take on and so hard to shake off.
Credit card debt comes with interest, sometimes exorbitant interest, and then there are the accumulating interests being paid on any penalties for overdrafts, late, and missed payments.
In the real "good old days" there was an understanding that charging too much interest was called "usury." Criminal gangs have been noted for "loan sharking" (charging such high interest that they were effectively making slaves, even co-conspirators of their unfortunate victims.)
These are the "not so good new days" when usury is legal, and compounding interest (if you are paying rather than receiving) just pounds, and pounds, and pounds.
Only slightly less challenging is the fact that even, if you have a real "nest egg," banks, despite the almost 0% interest rates they are charged to borrow, are paying scant interest on savings and certificates of deposit. In fact, the interest on savings is so low that inflation means that in real terms you are losing the purchasing power of what you have saved!
There are several solutions for debt, and the best one is creating a budget, and then sticking to it. The sticking to it can be even harder than creating one.
The winning budget starts with listing reliable income, then lists regular bills and minimum expenses, and takes from any surplus (and let's hope there is some, otherwise more income, reduced expenses, and/or both become a must) an amount to be put into "debt retirement," "future retirement," and the "inevitable emergency fund."
Once that has been done wisely and realistically, whatever is left could go into a "wish list account."
Budgeting so that everyone involved knows where the income comes from and has to go, can set the priorities in stone.
If you can't bring yourself to take a realistic look at your finances, it is time to spend a little up front to get professional advice from a CPA or a certified financial planner, or both.
Debt is an avoidable stress, and modern life in these "not so good new days" has enough stress, without the added stress of endless debt.
Put up the STOP sign by doing a budget, so at least you can know where the "money leaks" are, then do whatever it takes to plug the leaks before the very undesirable reality of bankruptcy becomes the only (and it is undesirable) solution.
Failing to plan, is (by default) planning to fail.
© 2014-2015 Demas W. Jasper. All rights reserved.
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