• Saturday, July 13, 2024
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BusinessDay

Ways to tackle debt… and the cause

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If you want to get out of debt permanently, you need to understand some concept about debt: Debt is not a financial problem. Hard to believe, but true. Debt is actually a personal problem that masquerades in financial clothing. That is why so many people have persistent problems with debt. People tend to look for different kinds of solution in solving this problem, until they found the true solution.

For you to have a Permanent Solution to your debt, you need to be able to define your debt problem correctly. That is where most debtors run into trouble because they don’t understand the concept of debt. That is why their debt returns shortly after paying it off. They fail to identify the root cause of debt, opening the door to repeating the vicious cycle.

For you to be able to solve your debt issues, you need to effectively plan for strategy that is based on principles that actually work. Unfortunately, when you just pay off your balances you relieve the pain but the underlying condition that put you in debt in the first place still lurks under the surface, ready to return.

Honestly, the real causes of overspending are your personal habits and attitudes. In other words, the true solution is personal not financial. That is a key, and understanding this principle is what will make you live a debt free life.

Expert says when you have a headache what is the logical response? You reach to the medicine cabinet for immediate pain relief. Unfortunately, the various pills do nothing to cure the underlying disease: they merely treat the symptom. The cause could be excessive stress, dehydration, eye strain, or any number of other issues. By taking a pill you’ve treated the symptom, not the underlying cause.

 The same is true with debt. Everyone knows they need to make more and spend less to solve their debt problems. So they pursue financially driven solutions to relieve financial symptoms. It seems logical on the surface.

Whether you choose to consolidate your credit card debt to lower interest rates or you choose any of the quick-payoff strategies (inheritance, gift, sell an asset, bankruptcy, home equity line of credit, or refinancing), the reality is you are treating the symptom and not creating a lasting cure.

 Your financial problems are merely the accumulated reflection of the many small financial mistakes you are making on a daily basis often without knowing any better. That’s why teaching a debtor to spend less and earn more is like telling someone to lose weight by eating less and exercising more. Everyone already knows that is the answer. The difficult part is not knowing what to do, but actually getting it done. The solution lies in your daily habits and attitudes.

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