I am a firm believer that living with debt is a choice for many people, and realize the first step to becoming financially fit is to change your mindset. Changing your mindset is not so easy when you live in a society that thinks your nuts for being frugal and cannot fathom life without debt. Below I have listed 5 financial myths that keep people in debt.
1. Debt is normal. I don’t know when debt became the norm, but I really believe that this myth is out of control. I use to think that it was ok to have credit card debt, and in fact when I finally started getting myself together (well so I thought), I was proud to pay the minimum balance due each month. It made me feel so responsible and like a real grown up, until one day I realized that I was living below my privilege.
2. Having credit card debt is normal. Statistics also show that the average U.S. American household has a total of 15,611.00 credit card debt and credit cards is now the leading indebtedness that Americans have. I don’t hate credit cards and when used responsibly they can actually be beneficial, but when abused with no discipline the cards in return can make your life a living hell.
3. Buy now and pay later is a great deal. These deals are a golden invitation into the prestigious club called The Debt Trap. The catch is if you don’t pay off the balance before the negotiated interest deferral program end date, the lender will charge you double by including the interest from date of initial purchase. Most people fail to pay for the merchandise on time and end up paying double for that two-year old couch that no longer looks or smells good anymore.
4. The young has time to save for retirement later. According to Bankrate’s monthly financial security index survey, 36% of Americans are not saving for retirement and more than a quarter of Americans between the age of 50 thru 64 have not started to save for their retirement. If I could call these people on my cell phone, I would remind them that when the bill collectors call during their golden years, they will not be able to use procrastination to pay the bills.
5. Your clothes, car, and home signifies status. I am a woman who loves nice things, but I refuse to accumulate debt and buy prestige so people can look at me or my luxuries and say Ohh and Ahh. I know I lot of broke people who walk around with Louis Vuitton purses and cannot afford to put $10 dollars inside their wallet. I’ve also have friends who live from check to check but sport a luxury car while struggling to pay off someone elses mortgage, because they cannot afford their own home.
I’m encouraging you to let the myths go and begin to live the life you’ve always wanted to live….
What are your thoughts?