Debt: The never ending cirle of doom

Have you ever heard the expression of “robbing Peter to pay Paul?” If so, then you’re either in debt or know someone who’s been affected by it. For some, debt is a devastating thing, and for others, it’s a positive thing. One might ask, how in the world could debt ever be positive? I’ll get to that a little later, but first let’s explore debt and what effects it can have on one’s life.

I personally know debt all too well! I have a long history with debt. It began for me as a young teen fresh out of high school. I had a job working in the fast food industry. At the time, I wasn’t too interested in attending college, and was just satisfied with living life and having a few dollars to have a good time with. I was introduced to credit cards through a department store. Back in the eighties, most credit offers came from major department stores. But soon after I’d opened a couple of charge accounts through a department store, offers started coming in the mail from major players, such as Discover and Visa. I was always responsible and made my monthly payments on time. When you’re young, you’re not thinking of your future 50 years down the road. I didn’t think at all about interest rates, APRs or anything else and how it would affect my payment. When I saw something that I wanted and didn‘t have the money to pay for it, I’d charge it. And as long as I had the paycheck to make the payment each month, I didn’t think about anything else, including losing my job, which I did. No matter, on to another job, and onto another credit card.

Since opening my first credit account, I am sad to say that I’ve always had a credit card account. There may have been times when there was a negative balance, but I always had a credit account that was open. When life would throw me a curve ball, the credit cards would come to my rescue. There have been times when I’ve purchased things that were needed and things that were desired. There have also been times when I was grateful to have a credit card, like the time when my family and I relocated to Florida from Georgia. We had enough money to get us through the first couple of months. My husband and I planned to get jobs and start working, but life doesn’t always happen on our terms. I had to go into the hospital just a week after relocating. After having surgery, the only person I could depend upon was my husband, and in order for him to help me, he couldn’t work. During this time, we actually lived off of credit cards. Needless to say, we incurred a lot of debt in a very short period of time. We are presently working on ending our dependence on credit cards once and for all. We’re also working on paying off our credit accounts and closing them forever. It truly is a wonderful feeling when your balance says zero. I wouldn’t say that being in debt has destroyed my family or my life, but it does have the potential to do so. I saw my father’s life be destroyed by debt. It broke my heart to see how many loans he had open and was indebted to when he died.

Debt is a never ending cycle. You’re like a hamster on a wheel that just keeps on turning and turning, but never goes anywhere. I admire people who don’t have debt and have never been in debt. I at times see people who only pay cash for things that they’re purchasing. If they don’t have the money for it, they don’t buy it or they save up for their purchase and buy it later. I believe that we are driven to purchase unnecessary items and incur debt. We are exposed to a lifestyle of consumerism at a very young age. Companies will tell you how you qualify for debt, but rarely explain the pitfalls of debt. They don’t want you to read the fine print. They just want you to consume, because the more you consume, the more money they make. It’s almost weird that things like this are allowed to take place in our country. Why would the government allow companies to entice people so negatively. Yes, ultimately, it is our own desires and ignorance that puts us into a position of debt. I look around at things and how there’s always something better and new. Computers for example, have you ever thought about how they keep changing? Same thing with cell phones, I mean how much technology do we really need to have?

Since maturing and seeing what’s really important in life, I’ve also seen that things are just that, things! The material things we purchase may bring us joy and satisfaction, but when you’re in a position where you can’t afford to pay your bills and eat too, you realize that those little things you liked so much as a young adult in your 20s just aren’t that important in your 40s. Another thing that I’ve noticed is that the hot item that’s out right now, won’t be hot in a couple of months. So why go into debt for something that’ll be outdated before you even pay off the amount owed on the item on your credit card and did I mention the interest you’ll be paying?

Debt is negative, but it can also be positive, how so? Purchasing a home is considered positive debt. If a situation arises where you can no longer pay for your home, you can either sell it or rent it out. Maybe you’re relocating and choosing to sell your home. If so, you can gain equity in your home and can actually earn money from the sale. Meaning that the money from the house being sold doesn’t just cover the amount remaining on your loan, but you’ve paid off the mortgage and now have money left over. Have you ever paid off a credit card and received a check from the credit card company? I didn’t think so. Another form of positive debt is purchasing a car. It’s not as positive as a house, but you can also sell the car and pay off the amount of the loan, especially if your car is in great condition and has very low mileage. Your car would actually be more valuable than what the Kelly Blue Book suggests. You may not be able to receive anything back upon selling it to a car dealership, but on a personal level, you may be able to come out even.

I could go into more detail about how debt has affected my life, but if you’re currently in debt, then you already have an idea of what debt is like. One may have a very positive credit rating and a very good credit score, but having a lot of debt is like playing Russian Roulette with the major credit bureaus. Loose your job, and your credit score could plummet over night. For those who don’t have credit and have no idea what being in debt is like, I’ll try my best to give you some things to ponder and see why negative debt is something you should run from. Run as fast as you can!

  • You see something that you’ve been wanting, but don’t have the entire amount to purchase the item. The item goes on sale and you’re enticed to open a charge account with the store. You think to yourself, “I’ll just get this one item. I already have most of the money for it, so I’ll just put the money I have now and use it towards the balance and add some more money to it and pay it off in a month.” This rarely happens. Usually, something else comes up and you spend the money you had on the emergency. Now, you’re stuck with the entire balance of the credit account and it’s starting to incur interest.
  • An emergency arises and you need to travel from Georgia to California. The quickest way to get there is by flying. You purchase an airline ticket and vow to pay off the bill with any extra income you earn. You know there are a couple of months out of the year when there are three extra pay periods. Meanwhile, your water pipes burst and have to be replaced. The entire repair cost is $1200. You only had $500 in savings, but had to use $300 to travel to California for a previous emergency. A month passes and your car breaks down, and now you jump on the vicious hamster wheel of debt. Life is uncertain and the plans we make are often lost in living life.
  • You get a consolidation loan to pay off your car loan and all of your credit cards. You now are making one payment and paying less interest. You are in a position to actually save a few dollars each month. Life happens once again, and you find yourself charging another purchase, and gaining more debt.

  • You do inventory one day in efforts of moving or just getting rid of old things and notice how much you have that you’re still paying for, because you charged them. What’s interesting is that most of the items are very outdated and can’t even be used with the technology of today. You now see that you’re wasting your money over and over again.
  • You unexpectedly lose your job and with the present job market, you find yourself out of work for months. You have a credit card that allows cash advances. You get cash from this card to pay your rent, utilities, buy groceries, and to pay your two other credit card bills. You even put some of the money aside to pay the bill for the credit card that you got the cash advance from. You’re now, robbing Peter to pay Paul.

Debt is very enticing and very easy to obtain. But, it is very difficult to get out of and even more difficult to resist in those desperate times of need. The very first thing we need to learn and the younger the better is discipline. I’ve learned that if I didn’t act upon my desires and thoughts, I would’ve had more money in my pocket. I am still working on discipline. Once you’ve lived your life without discipline, it’s so difficult and damned hard to make a change. But, it’s not impossible!

The first step in being debt free is to cut up the credit cards that you currently have. I know, it’s not easy to let go of your security blanket Linus, but you’ve got to do it! Even I need to do it! Pay off the smaller accounts first. One way to do this is by paying extra each month. Pay the balance due along with the amount for the interest. Work on this until you get the job done. But once you’ve paid off your balances, don’t keep them open. Write to the credit card companies and tell them to close you account upon receipt of your letter. They’ll shed a few tears, but they have to do it. Devise a plan that works best for you. If you’re not in a position to do this, make it an effort not to charge anything in the future. As stated, I know this is difficult. Especially when your car breaks down and you don’t have a penny to your name. I know the feeling. I’ve been there, done that! I have a t-shirt and still have the keys to the condo rental. I can say these things because I am like you. I am a work in progress. We can’t turn back the hands of time and change our present situations, but we can change the outcome of our futures.

The last thing I want you to really think about and focus on is this. I even invite you to copy, and paste it where you can see it each day. With each payment that you make, you come closer to paying off your balance. And when you think you will never be able to save money or ever be in a position where you don’t need a credit card, think about this. Your house, utilities, car, insurances, are not debts, but necessities, they are not considered debt. Your car is a form of debt, but as mentioned before, not as negative. Now, think of the money you spend on credit cards and maybe your consolidation loans each month. Now, let’s say you don’t have those credit cards and loans, but you’re still employed and earning the same if not more money. Won’t you be in a position that’s far better than the one you’re in right now? And, won’t you be in a position where you can actually save money each month? And with the money you now have, aren’t you in a position of worrying less and enjoying life more? Tell those credits cards, they’re going down!

Don’t think that you can’t change your life! When you want that major item, relax and know that in a couple of months, something else will be out to replace it. If you’ve saved up for it and really really want it, then you’ll probably be able to get it cheaper. You’ll definitely be able to find it on eBay. Discipline is not easy, but once you’ve mastered it, you’ll never want to part from it. Each day is a new day and a new opportunity to change. Don’t think that you can’t improve your life. You are unique, smart, and intelligent. Don’t think so just because you’re indebt? Well, if you weren’t intelligent, you wouldn’t be ready this article.

Empower yourself with knowledge. For, knowledge is the key that unlocks the doors to freedom.

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