Tuesday, January 22, 2008
Debt: No big deal
Something I learned when going through Financial Peace is that we typically look at finances the wrong way. The way our grandparents handled their money (only paid cash, lived on less than you make) is long gone. The average American today, before they make a large purchase, will ask themselves if they can afford the monthly payment. For example: New car costs $25K but spread over 4-5 years might cost $350 per month. They pay no attention to the fact that they are about to go $25K in debt and will actually end up paying more than that amount because of interest. This kind of thinking typically leads to people getting trapped in the "rat race" and with debt up to their eyeballs.
I know the concept of debt has always been around (Proverbs 22:7 The borrower is SLAVE to the lender), but it seems to have gotten out of hand in the last 50 years. I am pretty sure too that Master Card, VISA, American Excess, etc. have had something to do with it. I think eventually all this debt is going to catch up with us. In fact, it probably already is. Bankruptcy is at the highest level it ever has been and I doubt it will be getting better anytime soon. The national debt is at a whopping 5 trillion dollars. Obviously people don't mind being in debt or it just doesn't bother them enough to do anything about it.
As I type this I am reminded of our mortgage and how I can't wait for the day that it is paid off. Does it drive anyone else crazy to know that you owe such a large amount of money? It does me. If Proverbs is true, then why would any of us want to be a slave to money any longer than we have to be? Maybe it's time we started taking our grandparents advice again and change the way we look at money. Let me know if I am preaching to the choir or if you have a different view on debt. I am interested to know if debt drives you crazy as much as it does me.