Dollars & Sense – July 2009
Digging out of debt
Do you know the one thing you can do to make yourself richer by next week? Spend less than you earn. It’s really that simple. So many owner-operators, though, fail to do that. It’s common for a trucker in trouble to have maxed out high-interest credit cards and to have loans on personal vehicles for longer than four years. The boat you just had to have sits there while you continue to make payments.
We are a society of immediate gratification. We want the new thing right now, not in six months. Look around your home and you’ll find that virtually all your belongings are not necessities. You really could live without them. It’s not a bad thing to want to enjoy things you can afford, but can you really afford them?
Before you make that next credit card purchase, ask yourself: Will this item really improve my quality of life? Will it matter a year from now if I don’t have this thing? Is it worth paying more because I have to charge it? Eliminate an unnecessary purchase each week and you’ll be on your way to spending less than you earn.
If you’ve got debt problems, you’ve probably got plenty of negative impetus to change. How about something positive? Consider how much you are paying just in interest on your debt and think how you could use that money to improve your business or your lifestyle.
Better yet, you could invest that money for your future. If you are part of an average household, you pay over $900 a year in interest. If you invested that money in your retirement account instead, it would grow to over $58,000 in 20 years.
It’s time to take control! First, list your consumer debts, including the balances. Pay the minimum payment due on all balances except the smallest. Put every penny you can afford towards the smallest balance. You’ll pay that one off the fastest and then attack the next one. As you eliminate a debt, you then have even more to apply to the next. Soon you won’t feel overwhelmed by so many credit card bills.
You can reach your goals and realize your dreams. Having control of your money and your future is a great feeling. Furthermore, as your money grows, you will find that material things don’t mean as much. You’ll discover that quality of life is of more value and doesn’t cost so much.