Learn How to Get out of Debt - Debt-Relief

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.

© Copyright 2005 http://www.pebden.com, Author: Entjik Jeffrie, All Rights
Reserved.

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