The Consequences of Debt.
Anyone possessing basic critical thinking skills would understand that carrying $15,000 in credit card debt over a working career is just, well, insane. But that appears to be about the average credit card debt in America for 2016, according to several different sources. What the average is in America isn’t important. What is important is where you are personally.
Think about this for a moment. If a person works from age 25 to age 65 and if during those 40 years carries an average debt of $15,000, finance charges would be $2,700 per year based on a APR of 18%. It’s easy to see that $2,700 per year for forty years is $108,000. What isn’t apparent is that if the $2,700 (or $225 per month) had been invested into a retirement plan at an assumed monthly return of 6% for forty years, the value would be $448,085.
We often focus on debt and the stress of having to make the payments. But do we really understand the long-term impact on our lives and the consequences of the decisions we make by continuing to add more debt to the pile. As a society, we have campaigns against the tobacco companies and the hazards of smoking, “MAAD” mothers against drunk driving as well as health and nutritional programs in our communities and schools. Hopefully as a society, we will begin to address the amount of debt and the lack of savings for the average American household.
How does debt affect your well-being when it comes to the following areas in your life?
- Connectedness, meaning and purpose
- Critical thinking
- Time and energy
- Relationships
- Emotionally
What is frustrating with this subject is that there isn’t any quick fix or perfect solution to digging yourself out of a life of debt.Yes, there are always those in our society who will market their solutions with the promise of debt relief while they are busy capitalizing on the misfortunes of others. You can always make drastic changes by cashing in or filing bankruptcy. Hopefully, your personal debt level hasn’t reached the point of no return.
However, one thing is certain in life. A person who ignores, denies or does not acknowledge the inescapable issue that needs to be resolved, does nothing more than to allow the issue to eventually reach a crisis level that results in far more irrevocable damage than had it been addressed earlier.
Regardless of whether you are in your second, third, or fourth quarter of life, you always have the ability of free will, the choice of establishing boundaries, and the choice to no longer tolerate the mindset and limiting belief of always being in debt. Make a choice for change!
