Learn How to Get out of Debt


Debt is becoming number one problem in the United States Today. The average American family has at least $8,000 in credit card debt and most college students who just graduate from college have $3,000 to $5,000 credit card debt in their first year after college.

I love what the founder of the wisdom center Dr. Mike Murdock says about debt, he says that "Bad debt is a sign of lack of financial wisdom." If we don't know what to do with our money, we tend to spend it on something that will lose values in times. Robert Kiyosaki calls the things that will lose value "Doo Dads" Doo Dads can be a luxury car, a boat, jewelry, expensive clothes and so on.

Most people are never taught financial knowledge by their family or when they are in school. So as soon as they get out of school, they go crazy, because a lot of banks are offering them credit cards as soon as they finish their college education. They start buying things now and pay later. What they don't realize is that credit cards' interest is very high! It can be 18 to 29%. If you make late payment and go off allowed limit, the penalty period interest rate is extremely high!

It will take 20 years to pay off $1000 credit card debt if you only make the minimum payment every month. So be careful and watch out before you decide to buy something. Be careful of the words "Easy low monthly payment." They are very deceiving. When you get into debt, you will have to pay the interest if you can't make the payment in full.

Why the problem is getting worse? Most people rather spend their money on watching movies, eating out and buying clothes rather than buying books, tapes and videos that will teach them financial knowledge. They are not concern about their financial well being. Remember this, "What you don't respect, it will flee away from you." If you don't respect your financial life, you will find yourself deep down in poverty. Financial blessing will flee away from you if you don't respect it.

Most people who are deeply in debt do not want anybody to know that they are in debt. They are scared when their friends tell them that they have been spending too much. They get offended when someone tells them to get help or to buy books, tapes or go to a financial seminar that can give them financial knowledge and information, so they can learn to dig themselves out of their debt. They never consult and discuss their financial problem with a qualified financial planner or mentor.

What do I do now? Well delay of gratification is one of the solutions; don't buy it if you don't have the money to buy it! Wait, wait, and wait! I know it is very hard to fight on your emotion. You want the things you want today instead of tomorrow, but discipline yourself when it comes to buying.

It doesn't make any sense to buy a coffee table that cost $200 on credit and in 1 year you have to pay the bank $800 for the coffee table because of the interest that comes from the credit card. You can't even sell the table for $200 anymore! Be smart; use your mind before you buy, not your emotion, because our emotion can deceive us. Think, think and think, before you purchase something. Pay it cash if you really want it. Don't trade your future for today's gratification.

Get financial education! Get it now and don't delay it. You can always earn your money back, but you will never be able to earn your time back. The longer you delay the process of learning, the deeper you will get into debt and financial trouble. One of best financial education tool that is available today is "Choose to Be Rich Series" by Robert Kiyosaki. There 12 tapes or CDs and one video that talk about how to become financially literate.

It cost $150 to $200, but its well worth it. If some people are willing to pay $20,000/year to go to college, why can't they spend $200 on financial knowledge that will teach them to be smart financially for life! Don't be stingy to yourself when it comes improving your knowledge and education. If your gas tank for your car is worth $60 to refill it, your brain is worth more than $60.

Run a financial statement! You must know how deeply in debt you are! I love the depth indicator in every swimming pool. It tells me how deep the pool is, so I know what to expect. If you're not a good swimmer, you'd better stay in the pool that is not too deep, but as you become a better swimmer, you will be able to move to a deeper pool level.

Many people drown because they don't pay attention on the depth indicator in a swimming pool. It can be very fatal when someone doesn't know how deep the pool is. The same thing can happen if you don't know how deeply in debt you are.

You must know how deep your debt is! I am surprised that most people I talk to never look at their bank and credit card statements and they are not sure how much money they owed to the bank! When I ask them, how much do you owe the bank, they told me that they are not sure, or they are too scared to see their financial statement, but they are making their monthly payment and they don't even know the interest rate of their credit card!

Write it on a piece of paper, get the total balance you owed, so you know how to set a goal in paying off your debt. Remember this; you can't hit a target that doesn't exist! You must write it down on a piece of paper, or even a computer software programs like Microsoft Money or Quicken that will help you to keep track all of your expenses.

One thing that I found very useful is having a PDA (personal digital assistant) or Pocket PC to keep in track your expenses. A PDA or Pocket PC can help you balance your bank accounts, credit card accounts and manage your expenses.

Look everybody makes mistakes, it's human but we can't make the same mistakes over and over again! We have to learn from our mistakes and learn from them. The difference between the have and the have not is the amount of proper applied information that they have.

More Resources

Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exiting

More Debt Relief Information:

Related Articles


How to Negotiate Debt Settlement
People over extend themselves financially as a result of a change in their lifestyle. In today's economy were company mergers, and such; creates a displacement and hardship to the major of the workforce.
Credit Card Debt Freedom is Possible
Credit card debt have you drowning financially? You're not alone. The average American household carries $9,205 in credit card debt, according to CardWeb, an online industry tracker.
Drowning in Debt? Tips and Tricks for Getting Out of Hot Water with Creditors
Do you, like millions of other Americans, feel like you're sinking in an ocean of credit card debt? Well, fear not--there are many options for reducing your debt way before you have to be concerned about receiving notices or daunting telephone calls from debt collectors. The important thing to remember is to be proactive in handling your credit card debt.
Debt and Financial Optimism in the UK Continue
With £1.3 trillion pounds worth of debt in the UK, Scotland's Citizens Advice Bureau has welcomed a new Bill to regulate lenders and protect borrowers from creating un-repayable levels of personal debt.
Budget the Luxuries First!
Strictly speaking, his advice was preceded by another Heinlein maxim as well. "Sovereign ingredient for a happy marriage: Pay cash or do without.
A History of Money and Banking Secrets That Banks Dont Want Published
A History of Money and TradeTo start with a history of money and debt, we must go back many years ago when people used to trade their wares for the things they wanted and needed.In place of money or Federal Reserve Notes, you could trade a well made pistol for a cow, which you could eat or trade a remainder of for other items like clothing.
Learn The Five Key Debt Reduction Steps You Must Take Immediately!
Step 1. The purpose of this first step is to bring you back to reality.
Solutions to Single Mothers in Debt
As a single mother, lets admit it, times get tough. You are fortunate enough to have your children that mean the world to you, but it doesn't come cheap.
Help for the Single Mother with Managing Credit and Debt
Today's consumers benefit drastically from the usefulness of credit. Credit cards are especially useful for large purchases, emergency situations, making reservations, identification, and protection from fraud.
Reduce Your Debt
Do you want to reduce your debt? Having trouble paying your bills? Getting dunning notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car?You're not alone. Many people face a financial crisis some time in their lives.
Is Debt Negotiation Bad?
Educating yourself about the ins and outs of debt negotiation is a good first step. Please note that the term 'debt negotiation' is also known as debt arbitration or debt settlement.
Bankruptcy - Is It The Right Choice For You?
Bankruptcy is one of the tougher choices we as adults face in today's society where it is the norm to be in debt, albeit some more so than others. Credit card offers materialize whether you are looking for credit or not.
Debt Settlement
What is debt settlement?Debt Settlement is a process to settle your debts with the creditors. With debt settlement, a third party or you yourself negotiate with your creditors to come up with a reduced debt that you agree to pay.
Two Ways To Debt Relief
There are many debt relief programs out there both off line and online. Sometimes it can be difficult to chose one from the other.
Ten Ways to Get Out of Debt
1) Use your AssetsIf you have assets with some significant equity, such as a home or a car you may be able to use these to get control of your debt. For example, you could get a loan on your home sufficient to pay off your debts.
Bankruptcy Abuse
Bankruptcy is little more than a smack on the hand these days. Creditors are certainly not going to look at you as a wise credit risk after bankruptcy, but that will probably not stop them from extending credit to you anyways.
Debt Relief with this Simple Formula
Is there a way to get out of debt without getting a second job or having to increase your income in some way? Can the averageperson take his or her current income and pay off his or her bills in a matter of a few years, including the car and mortgage payments?The answer is YES!!! You can do it without having to cut out all of your fun and extra-curricular activities as well. Now, you may need to cut down on going to the movies or going out to eat, but you will not have to stop altogether.
Debt Reduction, a Necessary Endeavour
Massive debt is something many Americans face. Debt reduction is now becoming more and more of a necessity.
How to Become Debt Free
In today's consumer society it is all too easy to get into debt. If you have a few credit cards, car loan, mortgage and possibly student loans it can easily add up.
Is Filing for Bankruptcy an Option for You?
Bankruptcy laws give debtors a way to resolve debt by dividing their assets among their various creditors and in some cases will allow debtors to be freed of outstanding debts that cannot be paid, even after the division of assets. For individuals who find themselves unable to pay their debts, bankruptcy can be a viable option.