If you’ve been carrying around a permanent balance on your credit cards, a phenomenon known as perma-debt, you aren’t alone. Many professional finance guru’s refer to this as “stupid debt” and rightly so.
You can end up paying 2-3 times more for any single item when you add up the compounding interest on credit card balances (plus potential late fees and whatever other fees they decide to tack on). It’s amazing how blind one becomes to the ramifications of swiping a piece of plastic…it’s so second nature, like not using money at all.
I’m going to assume you don’t need a long lecture about how much damage this perma-debt is doing to your families financial future. Take my word for it, it’s not a pretty picture.
Rid your life and future of all stupid debt i.e. credit card debt and all other unsecured debt. Live within your means and save. This is clearly the logical choice and once you have the know how, it will be simple to implement.
“Hope is not a strategy for success. Your greatest responsibility is to take command of your future.” –Brian Tracy
If you’re spending more than you make, you are digging deeper and deeper into debt. Worrying about it won’t do you any good. Not knowing how much debt you have will allow you to spend as if the problem doesn’t exist.
You need to face this beast head on and do something about it.
How much debt is there? Knowing the numbers can show you the possibilities. You can trim expenses by reducing interest rates on those credit cards and pay them all off.
What’s coming in? What’s going out (and where’s it going?)
- It’s not as hard as you want to think.
- It won’t take you weeks to figure out.
- You won’t break into cold sweats and begin convulsing.
- You WILL start taking charge and create a specific plan.
- You WILL no longer rely on credit.
One step at a time – relax.
It has nothing to do with what you earn. Your income doesn’t matter. You could be bringing in six figures but at the end of the day, if more is going out than coming in, you’re not living within your means.
As a rule of life, you should spend less than you earn (duh, why didn’t I think of that 25 years ago). Figure out where you are. From there you can devise a plan to get where you want to be.
Just knowing where you are is going to give you an excellent starting point.
What I want you to do…
- In the comments below, tell me what you will or have told your kids about credit cards?
- Complete a balance sheet (consider it a wake up call and decide right now you will change your net-worth if you’re in the red).
- Share this article if you think it was useful.