Debt. Many of us have it, and we don't know how to get rid of it. In fact, a recent study done by the PEW Charitable Trusts discovered that an estimated 80 percent of Americans hold some form of debt. Now, there are situations where people's assets outweigh the debts they hold, but 80 percent is still staggering! Often times we tell ourselves lies about the debt that we hold, and those lies can dictate whether we dig ourselves out of debt, or fall further into the trap of being consumed by monthly bills.
Let's be honest for a moment. We are a credit union, and we realize that people need loans. After all, we offer Mortgages (Home Loans) and HELOCs, Auto Loans, Credit Cards, and several other loans that are designed to help you. We also understand that several people around the country are loaded with debt and don't know how to get out. We're here to tell you that it's possible...but don't tell yourself these lies. It will only lead to more trouble in the future.
"I need to make more money"
We aren't saying you shouldn't make more money. Raises and promotions are great! Generally speaking, making more money won't solve your debt woes. In fact, it can worsen them. If you start making more money, you have the ability to spend more money. Perhaps your problem right now isn't a lack of money, but living beyond your means. Do you need an unlimited data plan on your phone? Are you spending too much on cable/satellite? Do your research and see where you can cut your bills.
"I'll be in debt my whole life"
If you have this mentality, you probably will never be without debt. If you set a realistic goal for getting out of debt, you'll have a finish line in sight. Say you have $25,000 in loans/credit card debt currently. Don't set a goal for yourself of paying it off in 6 months if you know it's impossible. Find a goal that is reasonable for you, and stick to that goal. Check out Dave Ramsey's snowball effect for some good insight on paying down your debt.
"I'll start in a few months"
Why? Why start paying down debt later when you can start TODAY! You'll save yourself money by paying down your debt sooner. This is especially true of high interest rate debt. Start today. You'll be happy you did when you've reached your goal.
"We owe because of an emergency"
We get it, this happens from time to time and there's nothing you can do about it. After all, can you really plan for an unexpected medical trip? You can if you have an emergency fund! But realistically, emergencies come up. Make sure you understand what constitutes an emergency. If you bailed a friend out of jail, or forgot that you had to pay taxes this year, it's probably more poor planning on your part than an actual emergency. Know the difference.
"I had to have it"
Whatever it was, you probably didn't HAVE to have it. We know there are exceptions to this rule, but separating wants from needs is very important. You may want something, but it doesn't mean you need it, no matter how bad that yearning feeling is. If you feel like you need something, walk away, stop and think about it for 24 hours minimum and then see where you stand.
We get that paying down debt can be daunting, but don't believe the lies out there. You can live a debt free life if you try...and for those moment that you need an occasional loan for a house or car or fuel or other expenses, we'll be here for you!
-The Taconnet Team