How to Get out of Debt and Avoid Poverty
Overcoming Money Problems
In today's world debt is unavoidable for many who are caught in it's trap. Everyday and in all places throughout the world businesses and banks are gouging money from those who can least afford it and the spiral downwards continues.
An email from a recipient of my newsletter on spiritual help pleaded for a solution to her problems. I was touched to read: "There are times that I find difficulty to buy a loaf of bread. I have lot of debts to pay to banks etc. when I pay those no money left even for my food. Why is this."
The Spirit can help people recover from debt but you have to take the proper steps to help yourself as well. This lens is an overview of some simple steps that will get you out of it if you are willing to follow the advice. If time is running out for you then this matter is URGENT and no one can do it but you.
Cut up Those Credit Cards
Credit is music to the bankers ears. For every dollar accrued and left on the card unpaid past its due date the financial institutions reap massive rewards. The interest rate is exorbitant and has to be paid or you are in big trouble. Like a thief in the night the banks are taking your money through your card.
Many people take on more credit just to pay off their debts. That is being totally irresponsible. How do they get access to that credit? The banks know they are weak and can be milked a lot more, even driven into banruptcy. So they invite the debtor to have even more credit available. Is this good for you? No!
Have you ever thought of that interest as tax? Although it is not paid to the government that is exactly what it is. It is a legal way that banks can gouge money from you and treat you like a money cow. Have you ever heard that term before? It means you can be milked of money whenever the bank or other creditor desires. Tear up those invitations to extend your credit and turn away from credit as you come face to face with the evil that it is.
If you are in debt then you need to take this advice because without changing your ways the crisis will never go away. The experts who wrote this material know what they are talking about. Unless you are prepared to take advice of this nature then debt might worsen.
There are times when the banks will simply let you have all that you want and that is the trap. They are not interested in how you will repay only that you will do it or else. if you borrow from the bank then think about what you are giving them. They will have you in their clutches and there is no escape. Every day people are being hauled into court and having possessions repossessed and that might just be their house and/or car.
Remember the adage "there is no such thing as free money." Every cent you borrow will cost you dearly to repay. Before you spend another cent on those cards cut them up and toss them out. That very act will cleanse you and release you from the terrors within.
Now to restructure the debt and pay back what you owe in a reasonable fashion and one that you can manage,
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Spending Money You Don't Have is Creating Debt
When in a bind with debt during the recession of the 80's the solution for me was to put myself in a safe place and pay them off by regular amounts each week. The credit cards went first. Next a budget. How much come's in and how much to pay out to the cent. Anything over is saved in an envelope in a safe place. Stop things like Christmas presents except for simple gifts made yourself or bought with loose change during the year.
If you are unable to restructure your payments with banks and other organisations then get some help. Charities like The.Salvation Army, St. Vinnies, and others, have experts to do this for you as well. They will also help out with the odd bill or two and even supply some food vouchers to help you over the rough spots. That is great and very helpful but remember never to go back to the old ways. Pulling yourself up out of the ashes of debt is hard and will take its toll but once you are free of it there must be no going back.
Protect your credit card from fraud. It is something that is world-wide as criminals reap billions of dollars by this form of robbery.
Think twice before you spend anything that is not in the budget. The list of essential purchases should be noted along with their costs, Make sure the utility bills are covered each month and any repayments on mortgages and hire purchase must also take priority. Spend less on food, don't buy things like ice cream, soft drinks or soda, packaged junk food or cakes, and certainly no take-aways. Make your own food at home and if you are not such a good cook then simplify your taste.
There are good frozen foods available that can be added to with veges from the garden to make delicious meals. My favorite is frozen dory (6 slices to a pack for $7 to $9) and one or two slices with lots of veges or salad make a delicious meal. Prices vary, as you can see, so when they are low buy enough to last a few meals. There are also off-cuts in supermarkets that make lovely stews and things. These might be sold as pet food but look them over and check out how much meat there is to the quantity of fat. This will still be good meat as the butchers must adhere to proper hygiene conditions. Make sure you wash everything before you cook it. I always wash my meat because I don't know how clean the processor was when it was cut and packaged.
The bottom line is that you won't die as you progress towards debt freedom but your stomach might need some retuning. If you have a family then they too must adjust. Don't pay for movies and entertainment that can be got through the TV or radio. Teach them that drinking water is better and healthier than sodas and wean them off biscuits and other luxury items. A good meal is all they need and in between snacks are a waste.
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More fraud prevention techniques for card holders. My bank account has been robbed three times now by overseas crooks using my credit card. How they got the details and managed the sting is beyond me.
Managing Your Money
Most people are hopeless when it comes to managing money, They seize it with one hand and out it goes through the other It is human nature to want to save it as a nest egg for a rainy day. In our world, however, the emotions generated by nice homes, great surroundings and luxury items are our downfall. So everyone wants to live in the best places and hang the expense. That means sacrificing financial security while going into debt. So how much are you allowing your emotions and cravings rule over you.
The movies and magazines that many are addicted to are always showing us what we could have if we can afford it. The urge to be like the rich guys is very strong but many of them are also in debt because they live above their means. The behaviour we engage in is to say "well I want it now." That's great if you have the money. But the creditors play on the hunger they generate through the commercial world to make you incapable of waiting. The economy depends on a good money flow so the more you spend the more you circulate that current that ends up making you poorer and those who supply the goods a lot richer.
Over the last 100 years or so there has been a steady increase in the wealth of merchants as opposed to the general decline of the poor who are now, in effect, the new industrial slaves. The process is simple. Industrialists hook them up to something they can't avoid having and create a market that is forever expanding. The more 'fish' you get on that line the richer you become if you are one of them. But the so-called fish (the little guys like you and me) are doomed if we do what they want.
When the flow stops, however, there is a financial crisis. That happens when the greedy rich apply pressure that their victims cannot meet. That is what the housing crisis and sub prime mortgages were about and when that bubble burst things went haywire and affected the financial institutions around the globe. People were given mortgages on houses that were, to begin with, grossly overpriced and they did not have the income to meet their obligations to repay them.
It happened because after 9/11 the Bush administration panicked and overreacted by creating a money flow that gave credit to everyone who simply could not afford it. In effect the terrorists brought it about by their attack on the financial heart of New York. They achieved what they set out to do.
As the creditors defaulted the result was like a collapsing deck of cards. House after house went onto the market as the banks tried to recover their losses. The bottom fell out and the banks collapsed. It was up to the government then to step in and save the banks to try to avoid the massive recession they faced. This is where the huge debt started that has plagued the United States ever since and drove it into a debt crisis that has affected the world. Now there is a catch 22 situation that yet may bring about a huge collapse of the economic world.
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Bankers overseas, such as in Uk and Ireland, were heavily affected because they had backed the loans of the USA. Other countries fell into the same hole for similar reasons. The money they should have saved was as if it had been shoveled into a hole in the ground and nothing was left. Only Australia avoided the debt crisis by spending through it.
The government here gave all low income people and pensioners a cash bonus to spend. They told everyone to make sure they spent it and did not put it away. That gave the economy a big boost but it did put us in debt and the budget is still in the red. But there was no recession and no loss of jobs because of the GFC.
Managing a country's finances is not really much different to managing the household budget. If you stretch things too far the result is like a rubber band pulled out beyond it's limit. It will either break or snap back in a major recoil. Either way the effect is anything but manageable. But who is the main manager of the household's budget and who runs the country? Think about that for a while.
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You are Taxed More Than You Know
Next time you do your tax forms think about all the hidden taxes you pay that are draining your resources like a vacuum cleaner sucking up your money. You may not consider a lot of your costs as tax but they surely are. Interest paid on loans and credit cards is also a tax.
If you drive on a motor way or bridge and pay a toll that is a tax. If you gamble and wager money then that is equivalent to a tax. If you drink and smoke then the outlays for them is also equivalent to being taxed. In fact anything that takes money from you that is not in the line of a requirement for life or utilities is a tax.
There are many of these costs that you can do away with. Instead of shopping whenever you need something and taking the car with you then try shopping once a week or using a local shopping center within easy reach. If you run out of sugar, for instance, and go to the shop just for that item then the petrol you use might be worth more than the purchase. Running a car is a major expense and it is not just the petrol to consider. Every time you drive it the car uses oil, rubber off the tires, battery life and wear and tear on all the parts. That means that the more you drive the quicker you will be replacing these things and that is an expense you can put off for as long as possible.
Try putting off outings that will cost you money. Often a simple game played by the family at home will provide you with more entertainment then a trip to the cinema or a drive into the country. You need to become a miser for the time being and let the money coming in overtake that which is going out. There is a song by Harry Belafonte called "There's a hole in the bucket, dear Lisa, dear Lisa."
That song stuck with me throughout my withdrawal from debt. If the bucket you are trying to fill is full of holes then the contents leak out. Plug those holes and let the results speak for themselves.
There's a Hole in the Bucket
How Sound are Your Finances?
Is carrying debt a good thing?
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Businesses are closing down because they are driven to the wall with debt. This book may shine some light on how to deal with such a problem if it affects you.