Not all debt is created equal. Deciding to invest in an educational loan is widely different than buying the priciest pair of jeans in the mall. Understanding why you make certain decisions regarding money will help you make better financial decisions over the long term.
A few years ago, my nephew expressed frustration that he was paying the minimum balance without seeing a reduction of his credit card bill. After a quick lesson on how interest works, he was floored to learn that his habit of paying the minimum amount due was not enough to completely eradicate the balance within a given time frame. Most of us (including him) have come to understand the basics of credit card APR, but do most of us understand the emotional residue that comes from the monthly arrival of bills that we just can't seem to resolve? It's not the original amount of the purchase (emotion you felt when you first buy something) it's usually the interest (guilt, frustration) you feel every time a bill arrives in the mail - that's the real culprit. You can learn every trick in the "get out of debt" books and articles, but until you deal with the reasons you behave the way you do, you'll get out of debt.....and then right back into it.
Understand yourself - Spend less time understanding financial markets and more time becoming acquainted with the real cost of every financial decision. Again, you are making decisions - not just spending money. Every time you elect to place your card in the reader, you've made a decision that will impact your life. Stop thinking about your credit card as impacting your financial health. Start thinking about how your emotional health influences your decision to spend money you haven't even earned yet.
Develop a plan - As you examine the landscape, it is much easier to find ways to construct a budget, reduce your debt, and guard against creditors than it is to find ways to stop being impulsive or short sighted with money. As soon as dieters figure out it's not the food that's causing weight gain - they actually are better at keeping the weight off. Newsflash - your debt isn't caused by your credit card.
Good news - You have the power to solve this problem. It will take time and support, but reducing or eliminating your credit card debt is achievable. You have to accept that you are the problem - not the card. This is the best news you'll get today. If you accept you are the problem then you can learn that you are also the solution. If you need help understanding why you make decisions that negatively impact your financial health, visit CommandingVoices.com. If you want to develop a strong financial understanding and plan, I recommend following Kem Washington (Kemberley.com). She lost everything in Hurricane Katrina. She has since built a successful financial advising career and written several books. Right now, she's one of the best out there.
Comments