For many people, our people are rich in demons in many areas of our lives, including our finances. Some of us try to make us feel better by buying things we don’t need, ignoring our money problems or wanting magic solutions. A common end of this road is debt addiction.
What is debt addiction? Debt addiction is more than compulsive shopping. Someone addicted to debt uses debt as a mainstay for solving their financial and personal problems, without any plan to live differently or to get rid of debts. Other signs include the income from a salary check and never plans for the future, are constantly in financial crisis, or unwilling to take care of themselves to pay creditors. You can read a full list of characters here. Debtors Anonymous, a 12-step program modeled after Alcoholics Anonymous, brings people together whose lives are paralyzed by their dependence on debt, so that they can help each other.
How do you know if you have a debt addiction? Many people have built up a substantial credit card debt. It does not mean that they are all addicted or that their debt is made for a bad reason. There is a big difference between running out of your credit card when you are fired and running out of your credit card because you are upset that you have been fired. Often there is a mentality of: “What does it matter if I put more on my card? I don’t care about my balance and I will ignore it.” that you do not have the money to take care of yourself or your desired lifestyle is dangerous territory.
How do you recover from debt addiction?
No matter how hackered it may sound, acknowledging that you have a problem is really the first step in deciding that today you are looking for a way out. The next essential step is to fully identify one’s debt and to develop an action plan to settle the debt. Actually facing the amount of your debt is a big step in recognizing the role that you and your empowered demons have played in digging this hole.
What can we learn from debt addiction? The culture of spending that prevails in America has pushed many people’s dependence on debt in the red zone. We can all learn lessons from the way the members of Debtor Anonymous deal with the way their debt has taken control of their lives. Here are the four steps:
1. Make an inventory of your debt. Calculate the interest rates and the total balance on everything you owe. You can draw a free credit report to make sure you have counted everything.
2. Stop buying new debts. Make a budget that includes at least the minimum payment for all your debts and only pay in cash for the things you need. As part of this plan you must distinguish between your needs and wishes. If you cannot calculate a budget on your current income with which you can pay your minimums and your daily necessities, call your creditors and ask for help.
3. Look for ways to free up more money to pay off debts. When you are at the point that your debt has become overwhelming, it is time to take a step back from the lifestyle that you now live. If there is a way to live in a smaller house, drive an older car, lower your cable or energy bill or otherwise cut back, this is the time to do it. It is not hardship – it is an investment in your future, when you will finally be able to do the things you want without constantly having to work with the hamster wheel of debt. If you absolutely break the bone, it might be time to consider bankruptcy. Bankruptcy can also be seen as an investment in your future, so that you can rebuild your life without the debt yoke that you can never repay. With this said, bankruptcy should not be taken lightly. Always keep in mind the reasons why you should prevent bankruptcy.
4. Get support. There are many websites and blogs (like this one!) That offer support and advice on finances. Subscribe by email or RSS feed to blogs written by others who get out of debt – there are many inspiring stories from people struggling with their debts and succeeding. There are also many support groups and forums oLochinvarine where you can meet others and talk with similar problems. This helps you absorb the urge to simply cram those statements into a drawer and ignore your finances, and prevent you from going down to dig the hole even deeper. You are not the only one in this fight!
Every day that you don’t go deeper into debt is a day that you get closer to getting out. Readers, do you have any other suggestions to get control of your debt? What was successful for you?
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