Sunday, August 22, 2010

Personal Finance Help – Tips To Avoid Getting Into Debt

Personal Finance Help - Tips To Avoid Getting Into Debt
While many articles and books have been written to help you once you're in debt, very few have been written about how to avoid getting into debt in the first place. Many people choose to go to credit counseling only after they're on the brink of filing for bankruptcy. If you want to be successful financially, you have to first learn how to do things before the fact, not after it. In this article I will show you some common sense things you can do to avoid debt.

Teaching Personal Finance At Grassroots

Understanding the importance of personal finance is a key factor in being successful in life. It is hard to do much of anything if you are unable to manage your money. Most high schools today don't teach teenagers the importance of finance despite the fact credit card companies will mail them cards upon their graduation. I believe this one of the reasons why the average American family today owes about , 000 in credit card debt. They simply do not understand how to manage their money, or they lack the discipline to do so.

Save For Your Luxuries – Don't Borrow

The first step in avoiding debt is to simply not borrow money. If you want something that you can't afford to pay for with cash, you probably don't need it. If you really want it, you should save up your money and buy it. By doing this you will become disciplined and stay out of debt at the same time. It is easy to get a credit card or a loan to buy something. It takes discipline and hard work to save up enough money to buy it. Saving money has always been a simple path to building wealth. The more money you save, the wealthier you'll become.
Do You Really Need The Latest Tech Goods?

Many people are distracted by the bells and whistles of the many electronic products which flood the market today. Many people fail to realize that the digital camera or I-pod you pay 0 for today won't be worth anything tomorrow. Electronics almost always depreciate in value. Why go out and use a credit card to buy expensive electronics when they will lose their value after they're purchased?

Cut Out The Middle Man
One way to effectively manage your money is to develop a wholesale mentality. When I say this I mean that you should consider not paying retail prices for electronics, furniture, or other goods. You should think about paying wholesale prices for these goods rather than retail, especially if they depreciate in value. Instead of going to the mall or furniture store to shop for clothes or furniture, why not go to a clothing outlet or thrift store?

The Freedom Of Being Debt Free

Many people become wealthy and debt free by simply saving their money, paying wholesale prices for goods, and placing some of their savings in safe investments like IRA accounts. They often will only have one credit card if any, and the amount of money they have saved up will be much larger than the balance they owe on their credit card. This is the real secret to wealth. The get rich quick schemes and late night infomercials are disinformation which will not give you true answers.
Don't Be Another Sheep!

Avoiding debt and maintaining good credit is another key of financial success. It is important to understand the 80/20 principle when dealing with personal finance. You will want to avoid doing what 80% of the population does. Most people owe tens of thousands of dollars on credit cards, student loans, or car loans. Others use payday loans between paychecks to make ends meet. This puts them in a cycle of debt which will keep them from ever becoming wealthy or retiring in comfort. The credit card companies and banks continue to make billions while most consumers are getting further into debt.



The Plastic Disease

"What do you mean, the plastic disease?"

Your spending addiction is tied directly to those credit cards. You've got a pocket full of them. They're your ticket to ride, your passport to feeling important. You know that you can get anything you want, whenever you want it. Instant gratification! You don't have to wait, buy it now, right now! It will make you happy! It's like having a pacifier for grown-ups.

Every spending addict has been there, maxed out at least one of them, probably all of them. Just when that happens some bank sends you another card with an even higher credit line. Do you know what the interest is on those cards? Probably not, not if you fit the description of a spending addict, a compulsive spender, a binge buyer.

You think you'll be okay as long as you can make the minimum payments every month. You're careful never to think about the total amount that you owe. You read somewhere that in the USA the total credit card debt, right now, is six hundred billion dollars. WOW! At least you don't owe that much, maybe you're not so bad after all.

This spending addiction is the I'VE GOT TO HAVE IT disease. You probably don't even remember what you've spent the money on over this past year. A closet full of shoes? Maybe it's golf clubs, or paintings, or cars, or whatever. You do know that somehow it's never enough.

You're trying to fill the hole that's inside of you. When you are buying, charging, ordering, you do feel better for a few minutes, just like when you have sex. But, it doesn't seem to last. So why do you do it? Because it gives you a brief feeling of power and control. You feel like you are in charge, like you are somebody. It helps you get rid of those feelings that you're not quite good enough. Not feeling bad is what this spending addiction is all about.

And, it doesn't even matter how powerful you or your family may be, or how much money you do or don't have. It's the inside of you that feels so empty and insignificant. You just want to make that feeling go away.

Maybe you call yourself a collector ......

You can't stay away from the yard sales or flea markets. You're spending more time with eBay than you do with your family. You've bought stuff from those TV shopping networks, some of it you don't even want. But the thrill that you get when you pick up the phone and call that 800 number is worth it. Right? Those folks at the shopping programs make you feel like one of the family. Special! It's so nice to feel like you belong. You've probably always felt disconnected. An outsider. A nobody. But not when you're shopping, not when you're spending, because when you're buying you feel that rush that makes you know you really are special.

Already stopped spending?

By now you may have given up the credit cards at least once. You've promised yourself that you'll never use them again. You may even suspect that you suffer from spending addiction. You worked really hard to pay those cards off so that you'd be free of that burdensome debt. You even promised your spouse that this was it – no more - never again. Then, when you were almost there, you convinced yourself that you deserve just a little treat, after all, you worked so hard to be good, so why not?

You're drunk, intoxicated on your own brain chemicals.

That rush that you feel when you think about spending more than you have on things that you don't need, is exactly the emotional place you've been looking for. You want to feel GOOD. And, you know that for sure the spending will do it for you. Even though the feeling doesn't last long, it's worth it. You even know the best way to treat the "hangover" that comes afterwards. You can just do it again, and again, and again.

You begin comparing yourself to the people you know. The folks who buy more than you do, the guy at work who can't pass up a bargain in real estate. He's making a lot of money. He's spending a whole lot more than you do, and no one is complaining about him!

You see, you're drunk and you're rationalizing about your own situation. That's what you have to do to get your own way; compare yourself with others and lie to yourself about what's really happening in your own life.

Maybe you need some help.

If you've read this far you probably are ready for some help with your spending addiction. In the Spirit of Recovery we are here to listen. You can sober up, learn to spend only what you can afford, buy only what you really need, and live your life without the anxiety that has gotten you into this mess. Call for a free confidential consultation at 1 800 754 1452. Or send us an email at You'll be speaking with the best therapists available. They know just what you're going through and they will help you get to the other side. Why not call right now?