More Debt Means Less Control

We’ve all been there. It’s so easy to throw your bar tab on the credit card or defer that student loan payment. It’s only a little money, right?

Whoops, that’s wrong! We’re giving up control every time we choose to add to our debt. Someone else is picking up that tab. We owe them and they own us.

The next time you spend money on a credit card, remember one thing:

With a 20% APR, this purchase is at least 20% more expensive than using cash

Five dollars for a cappuccino? More like six. A hundred dollars for groceries? Try $120.*

Dave Ramsey describes how easy it is to fall into the debt trap:

In fact, Americans have wandered into so much debt that the average household credit card balance is now $7,996, up 5% from 2016. It’s nothing to be ashamed about — everyone is doing it!

We’ve become so OK with debt that we fail to realize how much it controls our lives.

With high monthly payments, what are the odds that you’ll be able to just quit your job and work on a personal project?

With a six figure student loan balance, how are you going to save for a house? Are you going to rent the rest of your life?

Manageable debt that we can pay down every month is a fine vehicle. It’s great if we can afford to pay off the balance at any time. Flexibility with credit is not a bad thing.

Once we start to have trouble making payments or never see the balance dropping, it’s a sign that the debt has become a bad thing.

If you find yourself in this situation, that’s okay! Most everyone has been there at some point in time. The only way to beat it is to FIGHT it!

Taking control means putting in the effort. It’s time to figure out how much your debt is costing you (or you find someone who can).

Stop using your credit card. Grab some scissors, literally cut the card and stick to cash. Calculate your actual student loan cost and pay a little more each month. Find communities who can support your efforts and hold you accountable.

Get angry. Not at yourself, but at the Man who locked you into this. It might be a long fight, but you can do it!

*This assumes you only pay minimums each month. The math with interest can get annoyingly convoluted. See compound interest for details

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Originally published at medium.com on September 19, 2017.