The Irony of Debt
For many, the process of getting into debt is part of a “want it now, pay for it later” mentality. We count on our future income to give us what we want right now. Instead of saving the money for the items we desire, we buy now, and pay later. Breaking this mentality is one of the key components of getting out of debt.
But to get out of debt, for most of us, we have to count on future income to solve our past problems, which in effect, is part of that debt-accumulating mentality. Most of us don’t have a sudden windfall or influx of a large amount of money, and so we have to plan, bit by bit, and allocate our income as it comes in to increasing debt reduction. Any plans we make for actually eliminating our debt invariably counts on income we have yet to earn to accomplish that goal.
So what’s a person to do? How do we break that “buy now, pay later” mentality, if to do that, we have to count on later to fix what we’ve already done?
The answer is simple and complex at the same time. We need to shift our gratification from external sources to internal sources. Paying off debt is a gratifying feeling, make no mistake. But instead of seeking “stuff” and “things” to give us that feeling of gratification (by accumulating debt), we can achieve that feeling of gratification by using our resources to eliminate our debt and improve our financial health. It is still looking to the future to pay for the past, but the end result is a life of less and of simplicity, not of possessions and of status symbols.
The irony of debt is that to break free we have to continue that same behavior we are trying to outgrow - looking to the future to solve our past and present - to accomplish our goals. But the end result is that we retrain that behavior to become healthy rather than destructive. Turn your impulses inside out - commit to reducing and eventually eliminating your debt. The journey’s already begun.
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March 4th, 2008 at 2:32 pm
It is ironic. A colleague of mine was raised in India, where the concept of credit was basically nonexistent. She said her parents saved for things then bought them. While I know credit cards can be invaluable, such as when booking a vacation or having a car emergency that you don’t have quite enough money for, too many people abuse them. I think the problem is that people don’t view credit cards as a loan — they view it as money. And I think it’s because parents and educators aren’t teaching children about credit and how it works. Instead of teaching complex economics to high school seniors, I’m in favor of having a personal finance course that teaches them about insurance, taxes, credit cards, etc., so they go off to college with real-world skills.
March 4th, 2008 at 3:34 pm
I agree, it can be hard to pay off debt, if you are counting on next weeks check to do so, just like you count on that credit card to buy whatever you want right now.
So many people abuse credit and I think it creates a never ending cycle of buy now, worry about it later. Which, of course, leads to more debt. I have seen so many people pay off debts and then just go and get more debt! You have to change your thinking in order to truly change your life.
Take Care
LJ
March 5th, 2008 at 3:56 am
It can be so gratifying to pay off debt, or even just to feel like you have a handle on your finances, especially after having been out of control. I’m now much more satisfied, even with my frugal existence, than I ever was buying all that stuff. Like you said, it’s the switch from the external to the internal.
March 5th, 2008 at 12:46 pm
Indeed. If I was to fix all my hopes and plans for happiness on the time when I become debt-free, it’d be pretty annoying, since I don’t expect that to happen for a number of years. Instead I look for the little things to enjoy life now. Like a silly regency romance every now and then to break up all the work I do. Or like hugging Micah because I can.
March 11th, 2008 at 7:07 pm
Great insight. I agree with you. It’s naive to think that you can break the cycle of constantly being in debt without a radical behavior modification and a commitment to delaying instant gratification.
Saving up to buy something and pay cash for it is almost unheard of these days. It seems like anything over a $100 will be store financed nowadays. It’s sick, and only we can change that mentality of “buy now, pay later”.