Debt-What Keeps Us There

Debt, and what keeps us there is really no big secret. There are some very identifiable reasons of why most people get stuck at a certain point in their finances and can never seem to get out from. So if your ready, here they are(see which ones you can identify with).

1)- Not knowing or wanting to know your own limits. I know, it’s always the Jones-es fault. Most people are always trying  to keep up with the Jones-es. Well, stop talking to Mr.and Mrs Jones then, and start talking to the Smith’s. I hear there a real nice couple.Credit Report

2)- Fees- It’s time to start consolidating folks. Know what you really need and start eliminating the rest. There are bank fees, credit card fees,  ATM fees, interest, penalties,overdraft, and countless others. Understand them, and know who is charging you them, and then eliminate as much of this debt  them as possible.

3)-Paying the minimum. We already know the outcome to this one folks. Pay the minimum on  couple thousand dollar credit card and the banks will have you in debt to them for the rest of your life.

4)-Cash advances. I believe most card companies charge a minimum of $5.00 ranging up to $15.00. Then of course will get the privilege of paying interest on that.

5)-Payday loans. I don’t even want to get started with this blatant legalized loan sharking scheme. Try charging these rates  to local neighbors and see how long it takes for you to get locked up.

6)-Negotiating. Don’t ever be afraid to call up creditors and negotiate better rates. Just do your homework first, and use their competition against them if needed. just get that lower rate. Period

7)-Ignorance. You must fully know where all your money is going. I’m not suggesting you become Mr. Scrooge now with your money, and you don’t have to keep your wallet under lock and key, but know where your money is going each month by keeping better records of it. Put together a manageable budget and stick to it. And also, understand all your financial options when you run into some type  of problem or unforeseen emergency.

There you have it folks,  the reasons why people get stuck in debt.

Author: Michael Jacob