How to Be Debt Free
There are scriptures that tell us to owe no man nothing and to be the lender not the borrower. That was probably easy at one time in history but today most people live on a borrowed dime. Somebody else’s dime. Credit cards are the norm today but this was not always the case. When the first credit card came out, the Diners Club, it was the result of one man going out to dinner and forgetting his wallet. A simple idea that would provide a solution. There is one way to become debt free today, discipline.
The Credit Boom
Today it seems that no one is a stranger to owning a credit card, especially college students. The Fair Credit Opportunity Act changed everything in 1974 when it became illegal for any financial institution to discriminate against applicants based on their religion, race, national origin — and gender. Lenders were no longer able to ask applicants questions that would disqualify them. This did give many more individuals the means to finance the things they could not afford. Major purchases, houses, cars, and appliances were popular. Today consumers buy everything from toilet paper to electronics on credit. That is not a bad thing but it is a quick and easy way to fall into a never ending cycle of debt.
Emergency Funds
As I mentioned the Bible gives us some insight and guidance on this; we just have to exercise some control. Credit to me should be used in situations were it is absolutely needed. I don’t like spending OPM – other people’s money. When something is charged it should be a priority to pay off that balance as quickly as you can and owe no man nothing. This makes sense for a few reasons if you only look at credit cards as use as needed then you are more likely to be responsible with your spending. For example, if you’re in a store looking at something that you really like but don’t need and don’t have the cash to buy outright, what do you do? You have a credit card in your purse or wallet, it has a balance but it’s not maxed out do you whip it out and charge it? Or would you admire the item put it back and keep it moving?
The Trap of DEBT
Yeah it might feel good to walk in a store with your shoulders back and you head cocked to one side, pick out what you like, swipe and walk out feeling like a proud new owner but it’s a trap. First you pay more than the actual price for items and you do not own anything that you owe a balance on. It’s a simple as that.
Interestingly enough when credit cards were first introduced you had a high bar to cross to qualify, today everyone can get credit. This is good and bad, if your responsible financially great, if not then you may have a problem. Controlling your debt also requires mindfulness. Too many people go through the day charging everything from bubble gum to parking. You may begin the day with a bagel and coffee, then you stop to fill up the tank, you run into the store and grab a few snacks. By the end of the day you have spent a lot more than you intended to but you never do the math. Check you balances, see where you are at and then you repeat the process. You make you minimum payments on time and feel good about that but you are now stuck in this daily cycle of spending or what you subconsciously think of as swiping. For a while things seem manageable and you think you are handling your business.
The balances continue to grow because you are paying interest. Plus you continue to give in to the temptation to buy stuff you don’t really need, can’t afford and you charge it. This new system is great for the big businesses. They are profiting. The average Joe in most cases is very happy to have credit, finance a car or mortgage a home. People who live paycheck to paycheck are able to put food on the table during tough times so the thought of debt pilling up doesn’t play a big part until it’s too late.
The Snowball Effect
As you charge and make you payments you will and should fell good about that but you need to foresee the long term effect of charging. Credit Card companies, banks and credit unions all require the minimum payment and would prefer you do not pay off a balance. That makes sense the longer you owe the more you pay in interest and the more the company makes off of one kind act of lending whenever you swiped. It is well worth taking a close look at your spending, balances and total debt on a regular basis. Once or twice a month is good but pay attention to it and this should encourage you to focus on paying down the debt.
Debt adds stress to your life. As you pay down debt you feel the weight lifted. We all know that someone who don’t care and will run up debt and then complain and fuss later when the party is over. Owing anyone anything is always going to hang over your head so don’t put yourself in those shoes. Pay your bill on time, be consistent, make payments that cover the interest and the principle to eat away at the balance. Stop buying crap you probably can do without. Everyone is using credit or debit cards today. But not everyone is buried in debt because of their spending habits.
Do You Need It or Just Want It
The next time you are out and find yourself ready to charge a coffee, I mean really, stop and ask yourself if it is a need or want. Those small items add up faster than you realize. Think of it this way if you had a one hundred dollar bill when you walked into a store and came out with only ninety dollars you would know that you spent ten dollars. Let’s say you then stop to have lunch and spend fifty dollars, big lunch, you still are aware of how much you have spent and what you have left. Sixty has been spent and you would have forty dollars left.
Yes it is more convenient to carry just one plastic car as opposed to paper money and coins but for those of us who may need a little more financial discipline the good old fashioned dollar and cents is the wise choice.
Owe No One Nothing
There is something about actually owning your belongings. This could be the clothing in your closet or the furniture in your home. What ever it is buying outright has many benefits. True ownership is what puts you in a position to be a lender rather than a borrower. If you are debt free and another is in need you can be the lender as scriptures teaches us.
In conclusion, as you pay off and control credit card debt you release stress and free yourself from that black cloud. Borrowed goods are helpful but God bless the child that owns its own.