How do people get into debt in the first place (especially with credit cards)?
There are a few primary reasons.
- They don’t have enough money to buy the things they need for physical survival/pay the bills at the time so they charge it.
- They desire something now, instead of later
- They justify their use to themselves by thinking they are using it to improve/invest in themselves or some product which they place a value on
In all cases you are promising your future time and work for purchasing power now, instead of later.
You are a Slave.
Black or white, rich or poor, you have just traded a portion of your life and freedom away.
Slavery is defined as the state of being under control of another person.
You are now under the control of your debtor and they can take legal action against you if you do not repay your debt and at interest.
You have just traded any future equity you may have in your time, skills and resources for something now, instead of later. In some cases this may be a good investment. Usually it is not.
People lend you money because they can make money through the interest they charge you.
What it basically comes down to is do you want to work for yourself and be able to keep your wealth or do you want to work for them?
How many days do you want to work for them for what you are charging? 10? 30? 365?
How long will the thing you are charging last? Longer than how long you will work for them? Will it be gone within minutes? Could you work just a little bit longer for yourself and be able to buy it cash?
Why do we do this? Why do we allow ourselves to become Enslaved?
- We lack discipline and desire something now or something for nothing
- It has been made easy and convenient for us to do so
- We feel we have no other choice at the time or that it is a wise choice
How can we stop doing it?
- Immediately close all paid accounts and cut up ALL of your credit cards
- Get and use only a debit Visa card for convenience
- Always carry at least $100 in small bills on your person and track how you spend each penny in a notebook
- Immediately rip up and throw any new credit card offers away when you receive them
- Delete any credit card numbers from your hard drive
- Run your life on a strictly cash basis as much as possible-if the cash isn’t there, it means you can’t afford it-use your mind and action to harvest, create or acquire some wealth so you can-don’t be a slave and work for someone else for free
Can you do it? Do you have the will and courage to do this RIGHT NOW or are you going to make excuses? Once it is done, all you have to worry about are new credit offers coming in or being stupid enough to try and get more cards own your own.
DO IT NOW and BEGIN to Free yourself from Slavery!
when you are in debt you are in an abusive relationship-just like a woman. use techniques and strategies. overcome fears by becoming educated. If you terminate an abusive personal relationship in an unworkable manner, you may get hurt or even killed. Similarly, if you use inappropriate means to exit relationships with tyrants, you could get hurt or even killed. Freedom Technology — described elsewhere — includes the means to legally, elegantly, and safely exit abusive relationships with tyrants. n general, it’s easier to inform and empower yourself to the point that you can competently exit an abusive relationship, than it is to reform the abuser. This applies to both personal relationships and relationships with tyrants.
Paying off the debt you have accumulated and becoming Free.
As a last resort, save your money, hire a lawyer and declare bankruptcy (yup, even that’s going to cost you)
Read Sleepers article on debt on this site-it’s a Classic!
- If you have zero income, make a plan to harvest, create or acquire some-do what it takes to pay your living expenses-they will always be there, you can’t pay them off, but there are ways of reducing them
- You need to get an exact picture of your financial life. Make a list of all of your bills and consumer debts-a spreadsheet is ideal. Make a list of all sources of income. Total it all together and subtract your expenses from your income. It will either be negative or positive. If it is positive, congratulations-this is the extra money you need to start snowballing your debts. If it is negative or even, you either need to increase income and decrease expenses.
Rank your debts from lowest to highest and start snowballing; in some cases if you are facing legal action, you may have to change priorities.
This is the classic method which is usually discussed. Pay off your lowest total dues first and then use the extra amount to pay off the next largest creating that snowball effect.
Now what kind of things can go wrong here?
First of all, most people usually try and guesstimate their expenses and don’t really know what is going out. You need to get a notebook and keep track of every single penny you ever spend-always and forever!
Secondly, far too often, it will come up as a break even case or negative. You can’t even afford to pay regular household bills, let alone consumer ones. Increase income-track and decrease expenses. Negotiate lower payments with your creditors.
Third, people are addicted to debt, just like a drug, and don’t have the necessary self-discipline to follow through. You really need to develop that mental attitude that you are going to be debt-free no matter what it takes. You need to get some kind of cash coming in. You need to learn how to sacrifice. You need to develop emotional control and learn how marketers trick you into impulse purchases. You need to pay your bills first, before spending money for any other reason.
So you are firmly resolved that you are going to get out of any and all debt. You have some income coming in. You have cut up all of your credit cards. You know exactly how much you can pay each month to snowball your debts. Now you may need to get yourself some breathing room and have these creditors leave you alone so you can pay it off.
My personal experience and ideas on negotiating with creditors (not to be construed as legal advice)
- There may be no way that you can increase your income or decrease your expenses enough to pay all of your minimums and still afford to live, so you may have to negotiate for lower payments
- With secured debt, you have some real wealth to lose
- If you have a clear picture of your financial life you are in the drivers seat-you know exactly what you can afford to pay on each bill and are dealing from a position of strength
- You now need to take action and call your creditors telling them what you ARE going to pay each month (to be followed up with a certified letter of intent and a call after the first payment has been made)
A phone call script or letter you can use to negotiate for lower payments.
A letter to make them stop calling you.
Until you can learn to control consumer debt, you will not be able to generate significant wealth for yourself-it will always be a form of stress and a strain on your resources. So please, please, please make a firm resolve to yourself to get out of debt.
Consumer debt is something that we knowingly agree to-next time we will look at legal forms of theft and how we are being stolen from without our knowledge and a few things we can do to protect ourselves.