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One lesson we learn early from our culture is that debt is normal. In many circumstances, upon death one of the few things people unfortunately leave behind for the immediate next of kin is debt. Precious few creditors will forgive debt when we leave this world. With rising costs everywhere, we all suffer a bit when relying heavily on loans to keep us financially afloat. And “floating” on debt is like sitting in a life raft with a leak...
Typically there is a fairly strong negative association with being in serious debt, but shame or social discomfort is unnecessary. Certainly if purchases were made for urgent needs or even an emergency, debt may be your only option. Even the savviest of financial counselors can wind up in debt for one reason or another. You would think that someone who is good at taking care of his financial obligations in general would also be good at debt management. This is not necessarily so. On the surface, it is simple. To be proficient with home finances requires knowing how much money is coming into the home, the cost of monthly bills, and how much is needed to pay them off. But the tie of debt has a certain allure that can ensnare even the most financially astute! Effective debt management relies heavily on knowing one's total debt obligations and the amount needed in earnings to adequately address them. There are simply more people who practice poor debt management than good, and they continue borrowing without sufficient financial resources to repay. When you begin the process of addressing and resolving your debts, you will first need to take inventory of those debts. All of them. Write down the total amount of the debt, the individual amounts, and the monthly payments. Divide them into two groups; one for essential or urgent bills, and the other for those that can be at least briefly delayed if necessary. Pay the essential bills first and the lesser priorities afterward if money runs short. Those without an income source should avoid borrowing altogether simply because debts accumulate and create an endless cycle of debt crises. It is all-too-easy to meander into debt, but much more difficult to escape its claws. It is much better to “err” on the side of caution when weighing the prospect of borrowing from anyone. Resist the temptation to use credit unless you know you can afford to pay it off in a short amount of time. While debt is a quite natural state of financial life, all should learn basic money management to avoid it. Learning ahead of time about interest rates and different types of loans will help one to better face the facts of debt. |
