To Get Out Of Debt, You Must First Understand It

Thursday, July 7, 2011, 2:00 AM | Leave Comment

Are you in debt? Are you heavily in debt? If you are, find a good credit counselor. This short post is for people who, in future, want to get a loan and by default will be potentially in debt, now that the credit crunch of yesterday is waning.

  • Beware and be warned

    If you borrow money from friends, family or a bank, remember it is not your money. It belongs to someone else – the owner. You are just renting it. You are going to use it and when you are done with it, you would then return it to its owner at a mutually agreed upon time.

    When you rent a vehicle, you rent it for some period of time. Did you ever think of not returning the vehicle to the rental agency who are the real owners? Whatever you borrow, you are legally and morally obligated to return it to the owner.

    Remember borrowing money, or anything else, is not bad. You must have a certain mindset to return it to its owner. You must set your mind to it and wholeheartedly.

To understand how debt gets created, read my post Understand Personal Finance And Live Within Means.

  • Using credit card is borrowing money

    When you use a credit card, you are using money that belongs to the credit card company. They are gracious enough to give you a grace period of 3 or 4 weeks to pay it back. What could be better than that? You rented the money, you paid it back to the owner. What could be simpler than that?

    Always buy what you need with the money you borrow. If you cannot pay it back by the due date, in full, just don’t buy it. I repeat, change your mindset. You are morally obligated to pay the money back to its owner.

Now let’s talk about borrowing and debt. There are two kinds of borrowing that turn into debt:


  • Good debt

    You borrow from family or friends or a bank what you actually and really need. You don’t go overboard. More importantly, you return what you have borrowed when you are done with it, because you realize the money is not and has never been yours. You are a winner.

  • Bad debt

    You borrow from family or friends or a bank what you actually and really do not need. Even if you do need it, you cannot pay back what you have borrowed for some reason, any reason. You realize you have to return it, but cannot for some reason that is not in your control. Find a way to get out of the debt and the sooner the better. You are, most probably, a winner.


  • Don’t be a schmuck

    Remember I said, there are two kinds of borrowing. However, sometimes it so happens that you never intended to return to the owner what you borrowed. Period. In that case, you are morally corrupt. You have no decency left in you, not of human kind anyway. You need a shrink, a therapist or someone. You are, most probably, a schmuck of the extreme kind or at least the third kind.

In a Nutshell
I repeat what I have said many times. Debt is not bad as long as you have control over it. Don’t let it have control over you. Find a credit counselor at the first sight of problems with the debt. Don’t be ashamed but do feel sorry if you did not pay it on time.

As long as you have a mindset that you will return what you have borrowed, money or anything else, I think you should do better than most.

Don’t be a schmuck and stay away from the schmucks of the world and you know who they are, right? Don’t let anyone shove debt down your throat unless you have the stomach for it and can digest it easily.

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