Monday, August 3, 2009

Debt-Free in a World of Credit

Many people think being debt-free is impossible. I always did too. I mean, so many expenses, so many things you want. …So much debt already. How could being debt-free ever become a reality? Well, before we talk about the how, let’s talk about what it’s like to be free from the tyranny of the credit giants.

It’s not the feeling that I expected. Don’t get me wrong, it’s pretty amazing and exciting, but I thought I wouldn’t be able to wait even a minute to call up Dave Ramsey and shout, “We’re debt free!” Not only have we not called, I actually got a bit anxious thinking about all the next steps and things that we’ll have to save up for in the future. There’s college, a home, cars, emergency funds, savings, investments and even job transitions to plan for. You see, we are still at the beginning of our journey down “the path to financial freedom.” And it still seems like a long road ahead.

So, if I don’t have enough money, should I buy it anyway?

If you’ve never seen this video, you need to watch it now. If you have seen it, watch it again.

In a way, having debt can feel pretty liberating. What do I mean by this? Well, let’s say I want to go out and buy a new computer. It can be justified. I’m a student, my laptop is getting old and I’m gonna have to upgrade sometime. But I don’t have the money, not quite all of it anyway. I can just put it on my credit card. It’s just a few bucks a month and I’ll hardly notice the interest. Right? The problem with this is, of course, that a lot of things start to become small justifiable purchases… And before you know it, you’ve got thousands of dollars in debt. I don’t just mean a few thousand, I mean $30, $40, $50,000 or more. Rent Confessions of a Shopaholic to get a good idea of where this kind of mindset can get you.

Wait a minute. That stuff only happens to people who are irresponsible with money.

First, I believe that most people are irresponsible with money in some way. There can be many different reasons: Lack of experience or advice. Bad habits or bad “luck.” Bad investments. Big college loans. Naivety. The list goes on. Yet, our culture and our advertisement unabashedly proclaim credit as a form of freedom. It is a lot like surrendering to the enemy in order to preserve your life. You may live, but you will still be a prisoner.

Good money management. No debt. True freedom and happiness… Priceless. There are some things money can't buy. For Everything Else, There's MasterCard.

It’s no wonder the world has a debt centered mind-set. Take a look these other credit card company slogans:

American Express:

My life. My card.
Long Live Dreams
American Express. Do More.
Make life rewarding
Do you know me?
Don't Leave Home Without It
(American Express Charge Card)
The businessman's passport

Discover Card:

It pays to Discover


Visa. Love every day. (Europe)
Visa. All it takes
(Asia-Pacific campaign)
Visa. All you need.
It's Everywhere You Want To Be
Wherever it takes you, the future takes Visa
(European ad campaign)
Could be cheap. Could be expensive. Visa. All you need.

Long Live Dreams? Make Life Rewarding? Love Every Day?! Who are they kidding? Creditors are clearly trying to make their products sound like a solution to all of your problems.

This is why having the right mindset toward credit is critical to your financial survival.

To better illustrate this point, I will share with you a story about how credit works in real life, not in the credit industry’s fantasy land of plastic bliss. But you'll have to wait until my next post!

To be continued...

1 comment:

  1. Hi,
    I used ”Credit Solution” to settle my debt and avoid bankruptcy. They managed to reduce my debt up to 58% and improve my credit score. It's legitimate . I came across this company on NBC News Special Edition. Check it out here: