We are a county in debt. All you have to do to figure that out is turn on any news channel…it seems that all they talk about is how bad the economy is and how the government is in debt up to its eyeballs. And it’s not just the government that is in debt, but we, as Americans, are in debt ourselves and the problem is not going away…it is getting worse!
Did you know that 1 in 7 Americans carry ten or more credit cards…TEN or more! Do we really need that many? The average family carries a balance between $7,000 and $10,000 on all their credit cards. Over $1,000 per family is paid in interest alone, every year! Imagine what you could do with the interest alone…start a fund for a family vacation, down payment on a car, help others in need, and the list goes on and on. These numbers are just averages, some people owe much more.
Overall, Americans put over $1 trillion every year on their credit cards, and owe over $500 billion…meaning we are only paying off half of what we put on them. The rest becomes debt. Debt that usually takes years and years and years to pay off. If debt continues at the current rate, 1 family in 100 will be forced into bankruptcy. Over 90% of Americans’ disposable incomes are spent paying back debts.
I totally understand these numbers because this is how our family has ‘survived’ for so long. But, we are finally putting a stop to it and turning our lives around…so looking forward to the end result.:)
I think before before we can learn how to be debt free, we need to understand what being ‘in debt’ means to us. To some, being debt free means paying off the credit cards. To others, it may mean not having a car payment any longer, no credit cards, etc. And still to others it means, NO DEBT WHATSOEVER….no mortgage, no credit cards, no car payment, etc., etc.
I know that I personally, want to be in the last category and to do that I need to figure out how to pay off the debt I owe, plus bring in enough income so that I can pay CASH for everything else that I want…more on how to do that later.
To put it simply, debt is the money that you owe…whether it is to a credit card company or a bank for your mortgage or car payment.
Getting into debt is easy and it might even be fun…at first. We all want to have that nice car, nice house, and don’t forget that nice pair of shoes or article of clothing that we just HAVE to have! And if we don’t have the cash available for it those credit card companies make it so easy to ‘borrow’ the money from them. And we (myself included) find it easy to justify it by saying we’ll pay it off as soon as we get the bill. Well, for those of you that do that, kudos to you….but you are the minority! When we don’t pay it off each month, it turns into that nasty little word…DEBT. Ugh!
Have you ever heard of cholesterol? In this day and age, who hasn’t? Well, just like there is good and bad cholesterol, there are good and bad debts. Debt can make your life easier or ruin your life, but however bad your debt issues are, there is always a solution.
Those who know how to handle debt and manage their credit, can use it to their advantage. But there are still a lot of us out there who never learned how to manage their debt and are now in trouble. It doesn’t matter if we are told from a young age to have good credit, live within your means, etc., if we are never taught how to accomplish that feat. I know this for a fact, because I was raised that way, but it surely didn’t help keep me on the right track. I guess at least I knew that was the goal, but no one ever taught me how to reach that goal, so it took many years of failing to figure it out. I believe we are finally on the right track and that is one of the reasons why I want to share the things I have learned with you.
You know, debt is not all bad…we often have no choice but to take on debt. Student loans are a good tool to be able to make it through school without having to work 3 or 4 jobs, and not be able to apply yourself as you should to your schooling. You just need to have a plan to pay the loans off when you graduate and get out in the real world.
If you can afford to pay for things in cash and limit the use of credit cards and taking on debts, then by all means DO IT! Do not hesitate to pay with cash (or a check card tied to your bank account) when you have the money. Taking on debt, just to spend it on things you really do not need is the worst thing you can do.
You must keep your debt under control…do not let it control you! If you are already in over your head, create a plan and stick with it the best you can and you WILL get out of debt!