2018-07-11 / Editorial

WHY ARE WE IN DEBT?

Martha Chalker

Many of us in this country are carrying much more personal debt than we’d like to admit. Whether our income is $50,000 or $500,000, we all seem to be caught up in the same habits of overspending and over-borrowing. Not just the mortgages on our homes and cars as in the 1950’s and 1960’s but easy credit for furniture, decorators, weddings, clothes and expensive toys. We think we have to have extensive phone contracts, unlimited access to movies in theaters and at home via Netflix, Hulu and Amazon Prime, all of which increases our monthly expenses. We think we need to dine out weekly or pick up takeout food all too easily paid for with credit. From the 1970’s until now, we have watched consumer debt grow to an alltime high. The trap is set! We want it all, we borrow to get it before we can actually afford it and get caught up in the vicious cycle of credit card debt. Additional temptations include the payday loan companies located on just about every block and car title loans advertized non-stop. Studies from magazines like The Wall Street Journal state that 70 percent of the American public lives from paycheck to paycheck. How did we get here and how do we change?

We all love our “stuff” but when we overbuy and overborrow we live in bondage to our “stuff”. Parents especially fall into the temptation/desire of providing their children with all the clothes, shoes, games… whatever their children ask for. This was one of my personal weaknesses. We must shift our view of stuff and money and learn how to handle both. As a culture, we are ignorant of what money is and how to manage it. We’re not unintelligent; we just weren’t taught the basic principles of making financial decisions for ourselves and our families. We don’t have the knowledge of mortgages or car financing, but we buy and sign the notes. We don’t really understand the implications of credit cards, high interest rates and late payment charges, but we get five pre-approved credit cards and use them anyway.

This financial philosophy and all the problems that come with it can be corrected (or prevented) by acquiring some basic knowledge. First, money is active. It is always flowing through business, banking brokerage houses and checking accounts. It can work for or against you. Either you gain control over your money or the lack of it will control you. Second, money is neither good nor bad. The way you use your money or lack of it will tell you something about you. Financial problems are often not the real issue but are symptoms of personal problems or short-comings in other areas of your life.

To begin making changes in your financial future, start with a few simple steps. Increase your awareness about what you owe and why. Know the terms and policies of each loan, lease and credit card. When you notice your minimum payment was $300 and the finance charge for the same period was $150, that should make you mad enough to change something. THIS IS THE BIG ONE! Make a commitment to stop creating new debt, destroy the credit cards and get control over your need for stuff. Develop discipline! This will take some soul searching and hard work. The strengths and weaknesses in your personal life will affect your personal finances. Sorry, it just does. It will be uncomfortable while you work at the discipline of handling your money. You may want to hire a financial coach or financial advisor to help you achieve your goals faster and easier. If you’re serious about getting out of debt and staying there, it is imperative to recognize the importance of both minor and major change.

Martha Chalker is a personal and business coach with over 20 years of experience. She also practices cognitive therapy providing the PACE and MTC programs with Learning Enhancement Centers. She can be reached at 706-564-4458.

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