Getting Out of Debt and Staying Out of Debt

Let’s face it. Most of us, if not all, have had our own share of problems on money and debt. Whether it’s about trying to manage our credit card debts, paying our personal loans, paying our officemate or schoolmate money we lent from them, or simply just staying out of debt if you don’t have one. If you’ve not experienced any or something related of what I’ve mentioned above,then its either your very, very rich and you’ll stay rich. Or maybe you’re not human – you have been living in another planet where the concept of money doesn’t exist.

Let’s first talk about two of the most famous ways to EASILY get into debt.

Credit Cards

Yes, it’s that shiny little plastic card inside your wallet. It’s that plastic card that gives you the power to purchase something you really don’t want. It’s the plastic card that gives you power to purchase something that you don’t really have money for. It’s supposed to make buying easy.

 

Image Credit: xb_cardv3_1 by o5ть35

The credit card in itself is really very simple, but it can easily make the most complex situations. It’s simple because you just choose what you want (or you let the salesperson persuade you), present your card to the cashier, sign and then receive the item. Just like that. No worries, no hassles – at least for now. Until the bill comes, and you actually pay for the item you have bought. Paying is the complex part.

Paying credit cards actually have many factors. Annual fees, finance charges, bonus/reward points charges (yes, there is such a thing), interest rates, and minimum payments are some of the factors in paying credit cards. Remember, the credit card is just supposed to make buying easy for you. It didn’t say anything about making payments easy as well.

 

Loans

We’re talking about all kinds of monetary loans – a cash advance loan, car loan, housing loan, government loan, etc. You get a certain amount of money, and you promise to pay the amount plus interest rates in a staggered manner.

Loans are supposed to help us. When you need a car, there’s the car loan, a house – a housing loan, cash – a cash advance loan. When you really need it, a loan could really help.

So what’s the problem on loans? Again, it’s the complexity of payment.

Image Credit: Apostrophe Hell by aeu04117

Now that we have two of the most famous culprits in putting us in debt, it’s just a matter of knowing how not to pay them but still get out of debt right? Wrong. If you think this is about a trick to get around the money you owe then you’re in the wrong place. I hate to be harsh but you really are in the wrong place.

 

Then why did we identify the two? It’s because to solve a problem, we have to know what caused the problem.

But are these two really the problem? I hate to disappoint but they’re not. And no, I won’t be saying that the problem is you. Well maybe you are. But hear me out just a little bit more.

Finding the root cause:

Do remember, that the credit card’s purpose is to make buying easy for you. Paying has always been complex. That’s why if you don’t have a credit card, you can’t buy that “dream gadget” or “dream shoe”. Without the credit card, payment is done upfront. No cash, no item. Credit cards actually do intend to help us.

As mentioned earlier, loans are there as well to help us. They offer to give you cash/credit so you’ll be able to buy that thing you said you needed.

Now that’s a key phrase.

 

“Buy that thing you said you needed”

 

Is that phrase entirely true? Is that shoe or gadget or car or thousand dollar watch, what you really needed? Or is it merely something you really wanted?

Image Credit: Obscured Fame by Eleaf

Now I don’t want to go and discuss in detail what are the things that are really needed and what are just wants. But let me just tell you that most of the things that you buy when you swipe your card or loan money are just plain wants.

Let’s go over a few.

When you got that cool phone from the shop, did you really need it? There are way cheaper phones out there that can still call and text.

When you got that phone from a high end subscription from your mobile provider, did you really need it? You say you need it for work? Then isn’t it supposed to be provided by your company?

When you got that car from a loan, did you really need a car? You got to your office just fine before.

When you got that loan for a business you were to undertake, did you really need to put up a big business right from the start? Or could you have started small?

I can go forever with this.

 

The Ultimate Lesson

It’s really about distinguishing wants vs. needs and acting upon them. I’m not saying you ignore your wants. You’re a human being, and you deserve it.

What I’m just saying is your real needs should first be fulfilled before anything else. If you think you can satisfy your wants without sacrificing your needs, – then do so. I’m just saying that by willing to sacrifice your happiness for temporary satisfaction or contentment is too great of a risk.

Don’t risk your financial future because of a cell phone that would be outdated in two months time anyway.

 

(There is another article named "Getting out of your Credit Card Debt" which I reccomend that you read after this one. Its best that you read that article right after this one.)