Obviously, the last thing you want for yourself — or anyone that you care about — is to be afflicted with the disease called debt for even a day; let alone the rest of your life! In fact, that’s why you’re here on this website: to get trusted advice, tips, techniques, strategies and life hacks to help you intelligently deal with your current debt situation, and ensure that any future debt that you take on (e.g. a mortgage, car loan, etc.), is part of a strategy that serves your best financial interests.
However, sometimes it’s more helpful — or at least, more memorable — to be reminded of what we shouldn’t do to achieve a goal, rather than what we should. It’s kind of a “wake up call” that let’s us know what’s at stake, and what we need to watch out for if we don’t want to spend the rest of our lives fending off debtors and collection agencies, and being used by debt instead of using debt.
With this in mind, here are four ways to stay sick with the disease called debt for the rest of your life:
Don’t create and stick to a realistic plan.
The biggest reason that many people are in debt is because they vastly underestimated the gap between their income and expenses. This is impossible to do with a realistic and robust debt management plan.
Only pay the minimum payment amount on credit card and other bills.
The phrase “minimum payment amount” should be obliterated from the vocabulary, because for many people it creates a false sense of security. All they’re doing is kicking the can ahead a month, and going deeper into debt. Of course, debtors love this because it’s a total cash cow. They don’t have to sell a product or service, and they get paid month after month. For them it’s the gift that keeps on giving.
Keep up with the Joneses.
Life is about trade-offs. If you want to keep up with the Joneses — who may have just dropped $10,000 on a Disney cruise — then you’ll find yourself stuck in debt until there’s all tunnel and no light. Basically: unless the Joneses are willing to lend you money (interest free) to get out of debt, don’t try and keep up with them. They’re not on your team.
Buy into the myth that filing for bankruptcy is total financial devastation.
Filing for bankruptcy (individuals typically file for chapter 7) sounds terrifying or even traumatic. And it’s obviously a big step that cannot be taken lightly. But eliminating it as an option is, ironically, playing right into the hands of creditors who desperately want to keep you from filing — which is one of the reasons they use such aggressive collection tactics. As noted by Charles Huber, an experienced bankruptcy attorney and principal of The Law Office of Charles H. Huber (learn more here: http://charleshuberlaw.com), the instant you file — we’re talking the very second — your creditors must stop contacting you through any manner, and you avail yourself of very strong legal protections. This isn’t to say that you should or must file for bankruptcy. But it’s something you should look into, so that you know what your options are.
The Bottom Line
The disease call debt is scary and painful. But it’s not permanent! If you wisely avoid all of the above mistakes, you can give yourself more than a good chance to turn your financial situation around. As always, consult with experts and stay focused on what’s in your best long-term financial interests. The road ahead may be long and difficult, but you’ll make it through!