Gary R McCarty

There is a lot of talk in the media and around the dining room table about debt. Consumer debt, national debt and even how to make the next car payment, Americans are all taking about debt.

Before we talk about eliminating debt lets focus on why debt is present in our lives in the first place. Debt is neither bad or necessary until we look at how the debt was first created.

Leverage. Some debt is generated from the idea of using other peoples money instead of our own. Keeping money making money is a good thing. Why would a business or person want to pay upwards of 30% in costs and potentially lose earnings if they can use someone else’s money and pay a little interest along the way. Isn’t a 20% interest more attractive than 30% in fees? Just saying.

Lack of personal capital. We need to have something to drive to get us to work and back. If we don’t have the $5k to $50k to pay for the vehicle we either will go without it or use someones money to pay for the car for us.

I want it today, I don’t have the money but I can afford to pay monthly for it. This is where some of us get lazy in our decision making. It is easier to get those new clothes, get that new appliance or even pay for gas when we lack the cash flow to purchase them by using the Visa or Master Card.

Are there more reasons. Probably. I think that these are the core reasons why most debt exists.  If you were to look at your present situation you will probably notice that you pay monthly bills that were created from any 2 of the above reasons to why we have debt.

Perhaps you are living paycheck to paycheck and would like to lower your debt and have more money at the end of the month. Once you understand why you created the bill in the first place we can then work on changing your mindset and eliminate some of the debt you currently have.

Thank you.