How Did We Get Here? Our Debt Crisis
Have you ever felt like you were drowning in debt? Have you ever felt like you are in over your head?
That status belongs to me right now. I’m pretty deep in debt. I’m ashamed. It hurts. I might not be as deep as some folks out there, but relative to my income it’s a very scary place to be.
But why did this happen?
It happened because I was caught up in being like everyone else.
I wanted nice things, cool things, good food, big TV’s, nights out, more food, and generally anything else that I truly wanted. But I didn’t have the money for any of it.
It was swiped away on various credit cards and forgotten. I say forgotten because if you don’t pay off your cards immediately every month, these charges become lost in a sea of other charges. They become remnants of an age that you couldn’t afford this shit. The pile(of shit) grows larger until you are literally swimming in debt, fees, and high interest rates.
My friends, I know some of you are in this situation.
The rest may even be laughing directly at us.
Fiscal responsibility isn’t taught very well in America. The good ole’ USA wants us to spend until we die. Borrow and spend. Borrow more and spend. It’s a product of Capitalism, and don’t get me wrong there isn’t anything wrong with Capitalism per se.
We as Consumers should be protecting ourselves and teaching the youth how do handle these treacherous waters.
Who is to Blame?
Where do we lay the blame? Advertisements, peer pressure, movies, TV, mom, dad, the inescapable feeling of WANT; all of these things are not to blame.
WE are to blame, You and I.
The knowledge of what we were doing has always been there, hiding right behind all of these things. We chose not to see it, we chose not to heed warnings. Blame will only get us so far, so how do we clean up this mess?
Let’s start with me. DM the Wasteful Spender Supreme. Below you’ll witness the debt I am burdened with. Once again, I am ashamed.
- Credit Card: 4120.38
- Credit Card: 3876.23
- Paypal Credit: 1857.98
- Store Credit Card: 788.65
- Motorcycle Loan: 8956.32
Holy Shit! Look at that mess! For the record, I make about 30k a year. So with the exorbitant interest rates of these debt items you can imagine that the struggle is real!
Do not fret Dear Reader, I have a plan. Hopefully this plan helps you as well.
Debt Relief Action Plan
To most people the plan should be obvious. The true problem with reducing a debt burden is we don’t stop the bleeding.
You don’t need stuff right now. Other than the bare necessities, our focus is going to be on paying off debt.
Luckily I do have an emergency fund saved up, I recommend you do the same. Not the 3-6 months worth that most people advise, just enough to make sure if something comes up you can handle it.
I personally have $1000 in this particular fund.
So now that we have stopped spending, what’s the next step?
We focus on one card, especially the one with the highest interest rate, and start to put every available dollar towards it. Continue paying the minimums on the others, but focus on this high interest one first.
In my case that would be Card #2. It’s gonna be a hot minute, but once that is paid in full, I can move on to the next card. Then the next. Etc, and so on and so forth. Simple!
Internally you are screaming that its not so simple!
I need STUFF.
Really and truly you don’t.
Recently, I’ve taken up reading a lot more and gotten a library card. Free books! There are a million and one hobbies and things we can do to make our time productive instead of shopping or spending willy-nilly.
If this sounds preachy, I don’t care. Look at yourself in the mirror and ask if this is where you want to be. You’ll find the answer comes very quickly.
Financial Independence is not having bad debt, Financial Independence is never having to answer creditors calls again, Financial Independence is spending less and saving more.
Now that I have told the world that I have made mistakes, we will dedicate our lives to fixing ours and helping you to fix yours too.
There are plenty of excuses on why things are the way they are, but the future will never improve without action now.
Come with us Dear Reader, and let us help each other.
This is just the beginning. I will keep you updated on where I am in the process and I want to hear from you as well. If you have tips and tricks to share I would love to hear them!