To Debt or Not to Debt

Let’s talk about something that almost everyone has in common:

Debt.

Be it credit cards, auto loans, student loans, personal loans, or a home mortgage there is a good chance you are on the hook for one of these.

Let’s face it, our world runs on debt.

The United States, for example, holds the title of most indebted country in the world with a national debt of around 22 trillion dollars. TRILLION, with a T. Can you even fathom a trillion? A thousand billion, a hundred thousand million. You get the picture.

That works out to almost 180,000 dollars per citizen…man, woman, and child. That is just what the government alone owes.

If we look at how much us common folk are on the hook for it’s just as scary. We owe almost 15.5 trillion dollars in home mortgages, 1 trillion dollars in credit card debt, 1.3 trillion dollars in auto loan debt, and over 1.5 trillion in student loans! More than credit cards and auto loans combined!

So, what do all these MASSIVE numbers boil down to?

Well there is a good chance the Joneses in your neighborhood with that shiny new F-150 in the driveway of that 4-bedroom McMansion are in debt up to their eye balls, living paycheck to paycheck while trying to pay off their student loans they took out 20 years ago.

Why is everyone striving for this life style? Why is everyone striving to absolutely bury themselves in debt just to maintain an image?

I’ll tell you why…

Debt is easy and delayed gratification is hard.

Just sign on the dotted line and only 24 easy monthly payments of $25 gets you the latest shiny iPhone.

Just sign on the dotted line and only 72 easy monthly payments of $700 can get you that new Silverado.

Easy.

“Save $700 per month for 6 years. Are you insane? That is going to take forever.”

You want that shiny new car NOW! Not in 6 years! You earned it. Right?

“Bah! Who has $1000 on hand? That’s just crazy! All my friends have the new iPhone. I deserve to treat myself”

Our inability to wait and save for the things we want or realize there are things we want we really cannot afford is our downfall.

The credit system is setup to get you into that debt cycle and keep you there. You get a grade that literally tells these companies how much you love debt. A good credit score is something you “need” to get the things you want. You get a score on how good you are with debt just to take out more debt. Do you see how crazy this sounds?

Have you ever really thought about the loan terms you take on for your phone? Car? Education? Or home? I mean like really think about it. Why is it a 2, 5, 15, 30-year loan? You spend more money and the lenders MAKE more money.

Why does your phone provider offer financing your new phone for 24 months? Is it because in 2 years most folks are getting the itch to get that shiny new thing?

Why do most auto loans fall within the 5-7-year mark? Is it really to make your monthly payments smaller? Or is because in 5-7 years most people are looking for a new ride.

You are literally on a payment plan that once you finish you are ready to trade it in, throw it out, and get right back on the debt hamster wheel. It’s like they figured out the human psychology to keep folks in the game of debt!

So now that you are starting to see how debt runs our world what can we do to break the cycle? How can YOU get off that hamster wheel?

So what are your thoughts? We would love to hear from you! Leave a comment below or send us an email via our Contact Page.

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Categories: Money Rants

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