Staying in debt is a lot like staying overweight. The principles of avoiding the situation are simple and no secret, but people continue to maintain bad habits that perpetuate the situation. If you’re not making the progress you want on your debt situation, give yourself a gut-check by seeing if you’re telling yourself one of these debt-prolonging lies.
Budgets are Too Much Stress
Sticking to a budget means spending time and energy you might want to use on other projects — but the stress from missed payments, overbalance fees and not knowing what’s going on outweighs the extra effort of paying attention to your finances.
I’ll Pay It Off Right Away
This lie usually accompanies a 0-percent interest financing offer or a store offer that gives a discount for opening a credit account. They seem like good deals, but the banks financing these deals count on the fact that almost nobody pays off the debt right away. Most keep a balance long enough for the account to turn a profit.
It’s an Emergency
In real time, this isn’t always a lie. Car repairs and health care usually mean spending serious money up front. The lie here is in allowing the emergency to require credit. Good financial sense means maintaining an emergency account high enough to pay for most sudden expenses — using an account that pays you interest when not in use, rather than one that charges interest when you access it.
I Deserve It
You see a luxury you can’t afford, but really want. You work hard. You take care of business…most of the time. You deserve to indulge yourself just this once. By the time you’ve paid off the debt the purchase created, you’ve spent 150 to 200 percent of the item’s price. What you really deserve is the lifestyle you can have by not buying things on credit.
It’s Only a Little Debt
Whether you’re talking about low balance, low payments or low interest, this lie condemns you to a death by inches. One little purchase is rarely enough to hurt, but even more rare is that purchase being alone. The “little debt” habit can add up to real money in the same way that daily gourmet coffee does.
It’s Only Until I Graduate (Get the Promotion/Find a Job…)
When it comes to student debt, this isn’t a lie — assuming you borrow only what you need and pay tuition proportional to the earning potential of your field. In general, though, this lie is even worse than normal credit card debt. With regular debt, you’re spending money now that you’ll make later. With this lie, you’re spending money you might make later. Even if you can pay it off quickly and efficiently, there’s always the possibility of your ship not coming in.
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