Debt: It wasn’t that long ago that debt was a dirty word. Having a credit card was a privilege of high income earners. Your bank manager grilled you before they would lend you money.
Saving for things that you wanted was the norm. What has happened to change this?
Debt is no longer a dirty word. It seems it is now acceptable to get into debt when you are young and stay that way for the rest of your life. It is easy to blame the banking system and yes, they do have a lot to answer for. But we are the ones that sign on the dotted line and get interest free, deferred payment deals to sustain our need for instant gratification. Or use the credit card that gets sent to us through the mail. We need to be more strict on ourselves and start saying NO.
Some debt is seen as ‘good’ debt for example student loans and your mortgage for your home. Other debt like credit card debt is seen as ‘bad’. Whichever way you choose to look at it, debt is debt, and your plan should be to get rid of it!
In his book “The Compound Effect” Darren Hardy talks about a conversation with his accountant when he was starting out in real estate and had ‘forgotten’ to save for his taxes and had no idea where his money was going. “You are spending money like a drunken fool….. you’ll dig your financial grave with your own wallet.”
As a money mentor, I see many people in this very situation, and the starting point is always the same; find out where your money is going and then make a plan to allocate more to debt and break the shackles.
Darren Hardy’s Daily Mentoring on the topic of breaking the debt shackles is well worth taking six minutes out of your day to watch.