Is Debt a Four-Letter Word?

Debt plagues the nation. Not only is the national debt astronomical, the debt of the citizens of the country is rather high. While many people try to avoid debts beyond things like homes, the fact is there is still a huge percentage of people who owe $10,000 or more on credit cards and in consumer debts. So, is debt a four letter word? Yes. Here are three reasons why:

1. Debt reduces your freedom. When you owe money, you have less ability to do what you want. You are obligated to someone else. You have a financial responsibility to someone. This means that your ability to do and spend as you please is diminished. Buying on impulse, spending more than you have, it is like a plague or disease. Once you are pulled under the spell, it can be increasingly difficult to get out from under it. This means that your options are fewer, and your burdens heavier. Who is freer to travel, enjoy life, and be who they want to be? The person who makes $30,000 a year and has no debt, or the person who makes $100,000 a year but has $8,000 worth of debt payments they have to make each month? Exactly. Debt reduces freedom, and the worst part is that it is self-inflicted servitude.

2. Debt adds stress to your life and relationships. One of the leading causes of divorce is money problems. Debt is a stressful thing. It causes unrest and disharmony in relationships because money problems are hard to deal with. In addition, debt means less financial freedom because the money you are earning is already allocated. This can be really stressful, especially if you are living paycheck to paycheck, which a majority of Americans do. When you have a lot of debt, and your spouse buys something haphazardly, etc. it can be the root of contention or frustration. Heavy spending, over spending, etc. all lead to increased stress and as a result, relationship problems.

3. Debt makes it difficult to progress. If you have debt, it is harder to advance in life. Debt makes it harder to get home loans, good rates on loans, etc. When a loan officer calculates your ability to borrow, they evaluate your debt to income ration. Even if you make good money, if you have a high amount of debt, your ability to qualify for a home, or a car, or any number of other things decreases. This can mean that as your family grows, your life progresses, your ability to progress with it is hampered by your debts. You end up spending money to buy things before you have money for them, and thus, never feel like you have any money.

Debt is a four letter word. If you are suffering form it, create a repayment plan, and pay it down aggressively so that you can get out from under its thumb.