| 10 Reasons To Pay Debt Off |
by Nicola Cairncross of The Money Gym Now remember we are talking about bad (consumer/unsecured) debt here, not “good” debt. 1. Simple survival. If you are carrying a load of debt, even the slightest shift in your circumstances can leave you vulnerable. Think of the man travelling up the escalator the wrong way, with a briefcase, a suitcase, a knapsack, several carrier bags, a bunch of flowers, a hat, bag, coat and newspaper. All it takes is for his shoelaces to become undone, or for him to trip or get tired and it’s all over. 2. Debt is very stressful. It can cause immense worry, sleep problems, feeling like a rabbit caught in the headlights, lack of control, the need to overwork, inability to enjoy time off, alcoholism, overeating, depression, inability to communicate with others, feelings of shame, powerlessness. Need I go on? 3. To protect your future. We have already said that every debt repayment is eating into your future wealth. It’s not just the lack of money now, it’s what you could be investing that money in, that would generate an income, that you are sacrificing. There’s an opportunity cost here as well as the stress. 4. Teach your children. One of my biggest drivers is to teach my kids about money and particularly compounding – its effects for good or ill. Your kids are learning to be world class consumers and they may well be learning to be world class debtors as well. Instant gratification is everywhere and unless you teach them how to handle those desires, they have no hope. You want better than that for them, don’t you? 5. To protect Your Marriage or Significant Relationship Remember that old game, paper, scissors, stone? Where stone kills scissors and paper kills stone? Here’s another one for you. Money kills love, or more particularly, debt kills love. If half of all new marriages fail and 80% of the marriage breakdowns report financial difficulties to be a major factor (and it follows that other relationships other than marriage would follow the same pattern), you owe it to yourself and your lover to sort your debt problems out, before it’s too late. On a personal note, this was the major factor in the breakdown of my marriage of 15 years. We just couldn’t get past the very different attitudes to money. 6. To experience the joy of creativity. You may not think of yourself as a creative person, but I can assure you that you are. We all are. However, all the time that you are hustling to pay your debts, your creativity will lay buried under the stress, the worry, the busy–ness of life. 7. Make room for opportunities. Have you ever noticed that wealthy people have all the luck? Why is that? Could it be that they notice the opportunities all around us all, because they have more time and space? 8. Enjoy more leisure time. Being in debt and having no reserve is very time consuming. I’ll come clean here and admit that I spent hours at my computer balancing the books for The Acacia and reconciling my bank account because the money was never in the right place at the right time. If there weren’t so many payments going out and more of a reserve, then I would have had more time. I could have done my accounts once a month without the need to keep such a close eye on my cashflow. It all came right in the end though as I’ve learned to manage my personal money with an 18-month spreadsheet so I have plenty of reserve and know in advance what impact every penny I spend today will have in three, six, twelve months time. 9. To be able to help others. If you are up to your limits, then you have no way of helping others. You are less likely to give money away to help your favourite charity, you couldn’t respond to a family emergency… 10. There is a difference between giving it away and burning it! Why do you want to give your hard earned money to a faceless, nameless shareholder of a big finance company? Why are they more deserving of your money than you? Need I go on? ACTION STEP Did any of the above reasons to get out of debt resonate with you? Make a list of the Top 10 ways your life would be different if you didn’t have any consumer/bad debt right now? Make it personal, in the present tense and positive. Then pin your list where you will see it every day. Then resolve to make it happen – as quickly as possible. This extract was taken from the “Debt-Busting Chapter” of Nicola’s book “The Money Gym : Wealth Building Workout” For more information on the book and more of Nicola's thoughts on making money visit here |
| Posted: 14/10/2009 11:02:01 Last Updated: 14/10/2009 12:02:02 |
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