A while back I wrote about building a strong financial pyramid. One of the core pieces to the base of the pyramid is getting rid of consumer debt. I thought I would take a few moments to talk about why this is such a critical piece on your journey to financial freedom.
- Credit Cards
- Charge Cards
- Student Loans
- Auto Loans
- Personal Loans
- Lines of credit
Seems pretty straight forward, right? Consumer debt is really any extension of credit that you used to purchase stuff or support your lifestyle, with the exception of mortgages.
For some reason, in the United States it is considered pretty normal to use credit to get the things we want today without paying until tomorrow. It has really become part of our culture to just accept credit card debt and auto loans. I hear someone say that they “will have a car loan forever” at least once a week! WHY!?!?!
Here is the deal guys, consumer debt is holding you back from achieving your goals. Those credit card payments are literally keeping you from being able to spend your resources on the things you want to be doing! By paying off your debt you will have the freedom to spend lavishly on the things you care about and cut relentlessly on the things you aren’t interested in.
Think of it this way, if you are spending $300 dollars a month on a car loan, $100 on credit card minimums, $250 on student loans and another $60 on your in-store charge card, how much are you sending out each month? $710, I don’t know about you… but that’s big money to me each month! Think about all the stuff you would rather do with that money!
This truly isn’t rocket science. In fact I am willing to bet that some of you are reading this and thinking:
NO DUH Andrew!!!
I know, right!? This is basic, but just because it is basic doesn’t mean it is easy! We have been engrained to accept the yoke of debt. You have to break that mentality and free yourself from consumer debt today. No excuses, just results.