The economy has been in a tailspin for longer than most people care to admit, but in the past year it has really hit home for people all across the world. While many want to place blame here or maybe there, I think that this may be just what the doctor ordered for this generation of reckless consumers (read the whole post before you go disagreeing, and leave your comments below). I know from reading questions on Mamapedia and Mamasource that many of you or your spouses are unemployed or were unemployed and then had to take a job making so much less than you were earning previously, these situations place a major financial and emotional burden on a household.
How does one get past that and get on with living a life of abundance? How does one get on with anything when bill collectors and mortgage companies have you on speed dial and remind you daily of your problems ?
The first thing that you have to do is accept responsibility for your own debt – whether it be a mountain or a molehill, if you don’t own it now then you will pay it off and just make more more. You made it and now you need to claim it, neither George W. Bush nor Barack Obama took that 7 day cruise for 5 that you put on your Visa card. So don’t blame them, blame yourself and let’s get past the blamng.
Next, you and I both know that the Chrysler Government bailout will not be extended to any of us, heck the plan that was put in place to supposedly help people with their mortgages may never come to fruition for you. There are many small mortgage companies (like Litton) that are flying under the radar and bleeding their mortgagees dry. So the second thing you have to do is accept that you have got to fix your own financial problems.
Third, unless you are facing foreclosure on your home or your car is about to be repossessed, don’t even consider bankruptcy. Filing bankruptcy to solve credit card and other debt issues, is like putting a tourniquet on a paper cut. OK, that’s a bit extreme, but what I mean is that some forms of bankruptcy and “debt consolidation”
- leave you with a higher monthly payment than you had before
- ruin your credit for seven or more years ( did you know that getting into a “credit counseling” program appears on your credit as worse than bankruptcy?)
- are a temporary fix – I know people who have filed bankruptcy more than once, why? Because they did not learn from their mistake!
So, what can you do? Now here is why I say that this economic crisis is an opportunity for the rest of us. Here is our chance to :
- figure out how to get rid of debt
- learn to live within our means
- create wealth for ourselves and future generations
Since you did not create your debt overnight you will not erase your debt overnight. Start by looking for ways that you can create additional income right now from selling things that you do not use to getting into a work at home opportunity or home-based business. I tell you how to handle those harassing phone calls in my post Your Reality Bites – How to Deal With Bill Collectors & Other Blood Suckers .
In my next post I will show you some tools that will help you to create a budget and erase your debt without bankruptcy or credit counseling.