The Rich ruleth over the poor, and the borrower is servant to the lender.–Proverbs 22:7
When we live beyond our means we end up enslaved to our creditors. If we owe someone, they can control what we do. In a way, we become enslaved to them.
Debt is a huge problem for the United States
The United States is over $13 billion in debt. The average American is over $137,000 in debt. Roughly 55% of Americans have credit card debt with the average debt being over $8000 in credit card debt.
At some point collectors will come knocking and wanting their money. If you don’t have the money to pay the bill, that’s when trouble starts and you become a slave to who you own the debt to.
Those who are wise and prudent with their money, will have the necessities of life, while the foolish spend all they have to acquire nonessential things for pleasure. Does money get tight at times even if you’re being wise with it? Absolutely! The biggest thing is saying no to foolish things we spend money on.
For years I spent money on cable tv and watched maybe 5 channels. For 5 channels I was paying $70+ a month, and not even watching those channels very often. We tried out HULU and Sling TV with their live tv packages, both run about $40. We did that for about 2 months and realized we hardly watch any tv, so we dropped the live tv and basically have the equivalent to Netflix for about $6 a month, that is roughly $750 a year being saved. How many other things do we pay for that we don’t really use?
Savings account interest is horrible right now for most banks. There are some banks that offer high yield interest. One that I use is American Express High Yield Savings Account. It gives you 2.10% APY, this isn’t the greatest return on investment, but it’s far better than most banks offer right now.
How often do we buy things that we use once or twice and then get tucked away somewhere never to be seen again. I’ve done it. It’s easy, we see it and think this would great to have, only to find out we don’t really like using it or it wasn’t as fun as we thought.
I know Dave Ramsey is all about not having credit cards. I think it’s more about self control. What my wife and I do is use the points for our card to help with Christmas gifts. Over a year, we can rack up a several hundred’s of dollars to can be used to help with that expense.
Hard times will come a long, that requires us to have the funds to pay for it. The problem for most is, we don’t plan for the hard times. We spend and spend and spend in the good times, then once we run into bad times we have no reserves to dip into and go into debt. Then we become slaves to the ones we barrow from.