Debt Traps

The Sign of Debt
It is not difficult to recognise the difference between good borrowing and silly borrowing. Good borrowing usually allows you plenty of time to think before making a decision. You don’t usually get in over your head with this type of borrowing, but silly borrowing can dump you into the deep end very quickly. Good borrowing means you take the time to research and think about a proposal, but silly borrowing wants you to jump in and sign up and buy the item on offer.

They say that the trouble with debt can be likened to the proverbial frog in the pot of boiling water. If you try to pop him in once the water is boiling he will jump out. But if you start him in cold water and slowly raise the temperature he will just sit there and cook to death.

People are like the frog when it comes to silly debt.

They don’t jump into the boiling water by buying something really big and expensive with their credit card, but they consistently buy small purchases over months and years, and only pay the minimum payment each month. That is, they allow the temperature to slowly rise until they are cooked.

Debt is a real problem. It is something everyone needs to learn about. They need to know the consequences of their purchases and the consequences of having any debt at all.

Why Debt is Such a Problem?

It is a problem because:

  1. It promotes discontentment:
    That is, you have to have that item right now. You are not prepared to wait and save up. You’d rather put it on your card because you will be discontented or unhappy if you don’t purchase it.

  2. Debt transfers your wealth to your creditors:
    When you take on silly debt you are transferring what would be part of your future wealth to others. You make a choice and you have to follow it through no matter how difficult it would be to maintain the deal you agreed to.

  3. Debt makes presumptions:
    By agreeing to purchase now and becoming obligated to that debt, (which you are looking to pay in the future) you are presuming about your future and what it holds in terms of extra income coming into the kitty. The strange thing is, people who don’t have money now reason that they will definitely have it later on. Even worse, many find they are turning over money to their creditors for things they have purchased and become legally liable for, which they don’t have any more, or which is no longer in use. If you can’t pay for something because you don’t have money at the present time, it’s an arrogant attitude to expect to have the money in the future.

  4. Debt limits your choices:
    Debt can make changes within the family and in some cases it may lead a spouse to go out to earn, so there are two incomes coming into the family. Debt gets people tied into jobs and  careers they hate. Debt makes you take on choices you would not normally accept (such as working in a night club as a bouncer to earn extra money – something you would never recommend to your children).

  5. Debt takes your freedom and puts you into bondage:
    When you are under a load of silly debt you are in bondage to the lender. You have no way out, but to work off the sentence that has been put on you. King Solomon (the wisest man ever) summed it up this way; “The rich rule over the poor and the borrower is servant to the lender.”