I was recently reminded of a dirty little secret:
Crushing credit card debt is not just for the low-income or average-income
family, it also hits families making great money, too.
I was working from Panera recently and happened to
meet a man who was there to pick up the day-old bagels for delivery to local
homeless shelters. When we got to talking, he shared with me that he works for
a credit counseling agency in the area. Since I am always trying to make better
sense of the actual financial lives people live, I asked him who his clients
where. Boy was I surprised when he said members of that country club up the road.
As we talked a bit more, he revealed that all it takes is one job loss for
people to get into deep trouble with their debt.
The reason this conversation surprised me was that
I assumed that, if you can afford to be a member of an exclusive environment
like a country club, then you
probably have plenty of money in the bank to cover your expenses for years to
come. But this is not always the case; for all of us, debt represents a promise
to pay for something we buy today with money we will earn in the future. This
thinking works great until our ability to earn money changes for a wide variety
of reasons.
So, why does paying off credit cards suck? Because
it means that we have to pay for our past when we would rather just move
on. The reality, though, is that we must address what has happened before we
move into the future with our finances. Otherwise, our debt will continue to
serve as an anchor to the future growth of our finances.
To attack debt, you must come at it from two angles:
logical and emotional.
Logical:
1. List all of your debts together on one page (include
balance, interest rate, minimum payment, credit card company name, and phone number).
2. Organize what you owe from smallest to highest
amount.
Emotional:
1. Reflect on what was going on in your life that
caused you to spend so much on credit cards. It may have been a stressful
season, or perhaps you were counting on a pay raise that never came.
2. Were you buying out of guilt, fear, anxiety, etc.?
It’s important to acknowledge the root of your spending to learn how to get
your situation under control.
3. Think about where you get your true sense of
meaning in life. Is it from consumption of goods and services, or is there
something else that can help give you meaning that will not cause you to spend
beyond your income?
At the end of the day, being in credit card debt does not make you a bad
person. Too often, I see people beat themselves up for the situation in which
they’ve ended up. Often, however, the reasons why people have ended up in
credit card debt are vast and complex; no two cases are alike. It is more
important to take a stand and realize there is hope in what may feel like a
hopeless situation. The first step is acknowledging that you need help.
Feel free to give me a call to talk more at 980-275-1627.
Ed Coambs
Edited by Reena Arora of Arora Media, connect on Facebook
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