Saturday, August 9, 2008

Controlled Anger Eliminates Debt


One of the toughest issues to wrap you arms around if you've decided to get serious with money management is debt reduction. The reasons can be numerous.

Debt attainment is largely a phenomenon that began with the baby boomers and has become a larger alter ego for each generation hence. Many articles have been written on baby boomers suddenly realizing their golden years may not be so golden since they have not been savers but debt accumulators. Those habits have been passed on and enlarged by the current Gen Y population.

In a recent article written by Emma Johnson of MSN Money she noted that among the many reasons Gen Y is broke is they were coddled by their parents, banking deregulation changed the rules and allowed new, exotic and more easily obtained credit vehicles and the fact that consumerism rules is the name of the game in retail selling.

What that all adds up to is people increasingly have taken on debt to establish and maintain a lifestyle that probably beyond their means and slowly the debt monster crept up and overcame them.

Credit card debt, car loans or leases, college debt,medical bills and the home mortgage usually are the more common categories that are found in most households.

Now the chore it to tackle the debt and reduce and eliminate it and more importantly never let it again become a part of your life.

Certainly among the first reasons or obstacles to tackling debt is many people tally the amount of debt they owe and find that is often a six figure number. Sometimes amounts could exceed a quarter million dollars. And in high cost of living areas, that amount would probably seem small. Seeing those numbers is enough to derail even the most optimistic individual. Baby boomers typically become depressed and give up. Gen Y folks simply deny it's a problem and somehow will simply go away or someone will rush in with a rescue mechanism.

Neither option is a solution to the problem. And with the passage of the new bankruptcy laws, simply walking away from debt and letting the courts handle it is not the easy option it once was. The do over is becoming increasingly rare, especially among those who have decent incomes.

The only realistic option is look at the numbers and not let them scare you. Actually quite the opposite needs to occur. And although I am a peaceful person by nature, this is one instance where anger,constructive and focused anger, needs to take place. Constructive in that the only destruction that will take place is the destruction of the debt.

The anger must be channeled at paying down or off the existing debt and stopping it from ever appearing again. It will require a commitment that extends to facing a reality that for some extended period of time a life style change will likely happen.

Serious people will sell off, sadly at a loss, much of the "stuff" that was acquired during their accumulation phase. Those with even more intensity will take on second or even third jobs to throw additional money at debt. And some will be faced with selling off high riced motor vehicles or even selling and down sizing home size and payment.

For most, taking those steps back, facing the debt head on and accepting the realities that go with killing off debt will often be one of the hardest and life changing events of their lives. Not only will they potentially lose a fun and outwardly prosperous lifestyle, but they must now face friends and relatives who may not be so quick to provide support. Instead shame and ridicule may come as part of the debt recognition problem and payoff process.

All those very human feelings must be set aside, dealt with and instead life for some modest period of time will be virtually focused,in channeled anger, at removing the debt burden and never allowing it to comeback into their life.

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