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The
statistics bear this out. In 1998, there were over
1.7 million personal bankruptcies in the
U.S. The number was similar in 1997. That
means that over 1 in 70 households in America went
bankrupt during the 2 year period of 1997-1998!
And the numbers are going up! This is
happening despite the "economic progress" that
is supposed to be going on in the country these past 8
years. Samuel
J. Gerano, executive director of the American Bankruptcy
Institute, said the dramatic increase in consumer
filings could be primarily attributed to three things: (Source:
www.abiworld.org/
)
- Households continue
to sustain (i.e., not pay off)
high levels of household debt
- Household
budgets are so overextended that it seems
impossible to get out from under debt
- There
has been a decrease in the negative
"stigma" around being bankrupt...
and the abundance of credit makes bankruptcy an
attractive option
Why have things progressed to this?
We think that is is because we have bought into the
lie that Americans need to live in a perpetual state of
debt! That this is "normal"
and accepted ("everybody's doing it!).
This illusion holds up as
long as we are able to make our payments each month...as
long as it doesn't affect us too much. Of course,
this doesn't take into account all of the decisions that
are affected by our debt, including:
- Job/Career
selection - When we are in debt, our
strongest criteria for what our present or future
job will be is which job pays the most.
Never mind what we enjoy...or which one uses our
unique gifts the most...or which job could benefit
other people the most.
- Retirement Savings
Reduced - The more money that you can save right
now for retirement (or college), the larger it will
be when you retire, due to time compounding of
interest. Having debt means that you have less
to contribute towards retirement...and that means
that the amount of money you will have in your
retirement "kitty" will be less.
- Marriage - Our
marriages have a much higher tension level when we
are always worried about money. Studies show
that financial problems are one of the top 3 reasons
for getting a divorce.
- Vacations -
When we have higher levels of debt, we often can't
take the length or type of vacations that we would
like, because we simply can't afford it. This
is a vicious cycle, because time off from work is
good for us, to relieve stress. The less time
off work, the more stress.
- Giving - We
can't help out our friends, our charities, our
churches, etc when we ourselves are heavy in debt.
- Getting Bargains
- There are many times that we are presented with
excellent opportunities to purchase something that
we really need or desire that is truly a bargain
price! This can range from a household
appliance to a car, etc. When we have money
available, we can take advantage of these
bargains...but when we are loaded with debt, we
can't. The key here is that having no debt and
a cash reserve allows us to take advantage of good
timing...while debt locks us into few, if any,
options.
Our own federal (and
often state) government does not set a good example
either. Our government recently told us that
they "balanced the budget" at a federal
level...and there was such a happiness about it in the
media! Unfortunately, all this means is that for
one or two years, the government didn't spend more money
than they took in. Never mind the trillions of
dollars in debt that is growing daily. No
one seems to want to address the real problem...cutting
expenses!
Telling
Yourself the Truth!
It's
time to tell ourselves some hard truths:
- Debt is
crippling our lives - It makes our lives filled with
worry, hampering our decisions. Debt not affects our own current
lives, but it leaves a decided mark on our children, our
relationships, and our future...the list above is
not comprehensive by any means.
- Debt makes us a
slave to our lenders- We live
in constant dread of missing a payment. Also, we
have to do whatever our lender says...including
paying when they want, paying the interest they
want, etc. The lender is under no obligation
to be kind to us or to help us out on a month where
we are "running short." The Bible talks about this: "The rich rule
over the poor, and the borrower is a slave to the
lender."
- Bankruptcy IS a bad
thing! - Despite what our society is saying, it
is not an honorable thing to get into bankruptcy
just to avoid paying debt. We realize that
there are some viable circumstances for
bankruptcy. But, so many times the reason for
bankruptcy is so that a borrower can avoid
responsibility. Bankruptcy often does
not correct the real problem...it just stalls the
consequences for a while.
- Debt is not an
income problem - Debt affects people at all
levels of income. People that are driving
Mercedes are just as prone to debt as people that
are driving a Ford Escort.
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