Debt Eats at You

People don't set out to get up to their eyeballs in debt. Instead, it just sort of creeps up on a person. You fall a little short this month, so instead of paying off your credit cards, you make the minimum payment "just this month." But next month things are still tight, so paying off your credit card soon becomes a lick and a promise. And you're still charging on that card, so the balance rises inexorably toward the credit limit. If you have several cards, it just multiplies the ease with which you can get in over your head.

When that happens, debt becomes a major source of stress in your life. You're constantly worrying about how you'll keep up with the endless stream of bills coming every month. Worse, you come to dread the possibility of new expenses adding to the burden you're struggling under. Does that sound in the car's rear end foretell an expensive brake job? Can you unclog that drain yourself, or are you going to have to call a plumber, and say good-bye to another two or three hundred bucks that will just ride on your credit card for ages?

And it's not just you it affects. Your whole family will feel the pain of being in debt. Money woes are one of the major causes of marital strife, and even if you do your best to avoid arguing in front of the children, they will pick up on the tension. Soon anything that costs money becomes a locus of anxiety for them: Should they ask about the class field trip, or would it be better to just "lose" the permission slip because they know it costs, and that means Drama. Should they give up on taking art or music because those classes involve fees?

If you are finding your debt overwhelming, it is essential that you make it your number one priority to change your situation. Money is supposed to be a tool that works for you. If you're finding that all your money does is make this month's payments on that mountain of debt, you have to take action to change that situation. You are an adult, and it is your responsibility to take charge of your future and that of your children instead of just drifting through life, taking care of the immediate problems while the long term is left to take care of itself.

You can gain control over your finances by making a few small changes in your lifestyle each month. It doesn't have to mean living like a monk, renouncing all pleasure and luxury for the rest of your life. Some drastic changes may not be feasible or even safe. For instance, if you own your home, it may not be easy to get rid of it and move to cheaper digs, and even if you're renting and not tied down by a long-term lease, a less expensive dwelling may well be in a dangerous part of town. And you certainly do not want to skimp on things like health care and vehicle maintenance.

Instead, the best thing you can do is slow down and pay closer attention to your spending habits. Are there places where money just seems to slip through your fingers: the donut and coffee you grab on the way to work because you were too rushed to eat a proper breakfast? The pizza you buy on the way home because you're too worn out to face the tasks of cooking super?

Many people have found it helpful to keep a diary of their spending for a period of time. Basically, take a notebook and write down everything you spend each day, no matter how small. Yes, even the pack of gum you bought at the gas station. Note whether you paid cash or charged it. After a few days or weeks you should be able to get a sense of where money is slipping through your fingers and be able to form a plan to break the bad habits of unnecessary spending. Some of it may involve planning ahead, whether setting the alarm a little earlier to allow yourself time to eat breakfast at home or doing some extra cooking on the weekends so you have leftovers to make suppers during the week. Others may involve eliminating unnecessary expenditures altogether.

If all else fails, you may need to talk to a professional about your financial problems. However, if you do investigate credit counseling, make sure to do your homework. Don't sign on with the first one you see advertising on TV or the Internet. A good credit counseling service will also help you reorganize your life so that you can have a sustainable lifestyle for your income and won't slip-slide back into debt trouble. However, because there is no federal regulation on who can call themselves credit counselors, a number of shady organizations have sprung up calling themselves credit counselors who are just debt-consolidation services and often leave their clients with unworkable repayment plans. Worse, some formerly reputable companies have gone the easy way and focused on profiting on fees rather than actually helping people regain control of their financial lives.

In a worst-case situation in which your obligations are far beyond your ability to manage (for instance, in the case of major medical expenses or other factors that permanently reduce your earning capacity), you may be better off contacting a bankruptcy lawyer. Bankruptcy involves repudiating some or all of your unmanageable debt, and will do significant damage to your credit rating for years. But if your debt has made your life so unmanageable that the stress of dealing with it is eating you alive and there's no other way out, it may be the necessary step to getting your life back.

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