Debt Often Has No Financial Status

Thursday, January 19, 2012, 2:00 AM | 1 Comment

Everyday I look for articles and essays, news of the day, news of last week and financial news, just in general. And I write a post or sometimes two a day. At least, I try to. I consult Wikipedia a lot for definitions of terms that I don’t understand. Some words I never even heard of before the economic crisis.

This blog covers a lot of topics that deal with personal finance. May that be career, credit cards, insurance, debt, personal technology or taxes. The main objectives for my blog is to inform and help (hopefully) folks how to manage their debt and eventually eliminate it. You use and manage debt for your personal livelihood so you lead a better financial life.

There are a number of ways one can get into extremely high debt, high enough to declare bankruptcy. I can name a few:

  • You don’t make enough. You borrow just to survive. Borrow as little as possible.

  • You make good money. You still spend more than you make, so you borrow and keep borrowing. Spend less than you make.

  • You make very good money. But then you are at a higher status than the above. You still spend more than you make. You borrow to maintain your higher status. Abandon to follow your old ways of maintaining the high status you were so used to.

  • You make extremely good money. But then you are yet at a higher status than the above. You may or may not spend more than you make. So you may or may not accrue debt or some debt. Ed McMahon is one example. He made lots of money. But he accrued lots of debt too. Live within your means no matter what your income status may be.

  • You are, what some call, shopaholic. You spend, spend, spend. In that case, you need a therapist. Go see one. Period. Quit shopping for a while, especially don’t use your credit card for some time. Get used to the idea to live with your old stuff you own and not buy more.

In a Nutshell
Some of the above ways are in our control. We just have to set our mind to it. We have to change attitude in our personal finance. That is, save more, spend less. We have to live within our means. It’s essential now than ever before because of the bankruptcies that have gripped the U.S. housing market so tightly. These days our utmost struggle should be just to survive.

What other tips would you add to this list? Share your thoughts in the comments below!

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  1. One Response to “Debt Often Has No Financial Status”

  2. By Sandy @ Yes, I Am Cheap on Jan 20, 2012, 12:20 am | Reply

    Spending more than you earn will surely put you at risk of high debt! Debt can also come along from bad investment choices and not having the discipline to prioritize.

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