What’s Wrong With Being A Slave To Debt?
Everyone’s Doing It
The best advice any good financial advisor will give you if you ever want to get ahead financially is to watch your debt by watching your financial habits. Developing bad financial habits could end up making you a slave to debt. When you are a slave to debt it’s such a struggle to break free and become financially independent. Once you are entangled in the web of debt, it can strangle any chances you may have of financial freedom; unless you approach your debt a different way. Just because debt may be in vogue so to speak does not mean that it’s a good financial move for you or that you have to follow along. Financial freedom and being a slave to debt are at the opposite ends of the financial spectrum. You cannot be a slave to debt and still enjoy financial freedom, it’s not possible.
But how would you know if you have are a slave to your debt? If you tell yourself that being in debt isn’t a bad thing, use your credit cards to pay for everything (even your basic living expenses), are always paying your credit cards late or miss some payments now and then or have maxed out your credit cards…you may be a slave to your debt.
#1 – Stop The Easy Ride
Every time you tell yourself that debt cannot be that bad because it is easy, you are headed for financial trouble. Getting into debt is so easy and that is the problem. You can have anything you want, go anywhere you want and do anything you want if you are willing to rack up your debt to do it. But people who are financially ahead of others do not follow the crowd and rack up their credit card debt just because it’s so easy to do. Folks who have the financial freedom that you are looking for decide if the things they want are more important than financial freedom. You choose to get ahead or you can choose to take the easy route and keep being a slave to your debt.
How can you change? You can stop the easy debt cycle by limiting yourself to one or two credit cards, that’s it. Do not sign up for every credit card application you get. Avoid becoming dependent upon your credit cards by not using them for every single purchase. This will help not maxing out your credit cards.
#2 – Stop Wasting Your Money
Debt is expensive. With credit cards you have to pay annual fees, interest on account balances, fees on late pays and missed payments and even higher interest rates if you have too many late or missed payments. With an auto loan you end up paying double for your car after the interest is calculated into your monthly payment. Who wants to pay double for their car? What a waste of money.
Another way debt gets expensive is the way it affects your credit score. If you have too much debt, too many delinquencies, debt write-offs and bankruptcies your credit scores get a negative hit. When you have a low credit score (between 350 and 500) creditors consider you to be a bad risk. Which means that creditors believe that they will not get their money back therefore you will pay more for everything you buy…what a waste of your money.
How can you change? Financial habits change when you change your spending habits. Evaluate your spending, do you spend too much money, too often? If you are a frivolous spender you are wasting your money. If you buy on a whim with little regard for the need, you are a frivolous spender. Have a purpose for your spending. Buy based on what you need not just what you want. It’s easy (and wasteful) to buy everything you want. Change your enslavement to debt by changing the purpose of your spending.
#3 – Watch The Consequences
Debt allows you to buy now and pay later. You can purchase anything you want and not worry about the consequences until another day…what a deal right? No, it’s not a deal, it’s an easy way to get yourself in financial trouble. When you can buy today and not get a bill for those purchases for thirty or so days, it’s easy to buy more. That’s a trap.
How can you change? You have to want to change. If you always use your credit cards to pay for things you want but cannot afford, you are falling into the debt trap, you know, the one with no consequences. Be financial accountable to yourself, track your expenses so there are no surprises when the credit card bill arrives. By tracking your spending you will know where your money is going, and that’s a positive step in the right direction.
Change Directions, Don’t Be A Slave To Debt
When you have a loan out on a car or home, you do not own that property until that loan is paid off in full; the creditor owns it. The creditor in effect, owns you while they carry your loan. If you miss too many mortgage loan payments, you foreclose and they take your house. Miss too many auto loan payments, they repossess your car. Basically, you are a slave to the loan until it is paid in full. Some debt cannot be avoided, homes and transportation costs. However, a lot a debt can be avoided. If you change the direction of your finances you may be able to eliminate or at least reduce some of your debt.
When you overspend or spend for the wrong reasons, based on wants instead of needs you are making it very easy to find yourself buried in debt and a slave to that debt. If you can avoid debt like the plague, do it. Debt has more negative results than positive. To avoid being a slave to your debt focus on your spending habits and as much as possible try to live within your means. Many people find that sticking to a budget helps keep their spending in line and their debt to a minimum. You may want to try budgeting, it can’t hurt. And if you don’t like it you can always stop, but unless you try to change something about your finances you will always be a slave to your debt.