If You're Addicted To Debt - Then Break The Habit Now!

By: Michael Redbourn Click author's name for more of his/her articles

It's no secret that tens of millions of Americans are in debt to the tune of close to $10,000 dollars of credit card debt, and I just was asking myself how it all came about, when I came across an article about California's debt problems, and I was shocked.

I knew of course that California was in bad shape financially, but I had no idea just how bad, and it would be hard to overstate its fiscal problems.

If California Were A Person It Would Be Bankrupt

The present shortfall in California's budget is $42 billion, and yes you read that right, billion and not million, and a billion is a thousand million.

When I last checked the population of California, it was 36,756,666 (but the 666 will no longer apply, so relax) which would mean that every man woman and child would need to chip in more than eleven hundred dollars to balance the budget.

To cover this shortfall, the legislature enacted a package that included the largest state tax increases in American history, leaving California with the highest sales and personal income-tax rates in the country.

* Hawaii overtook California in May.

That Was The Good News

The state is now paying for goods and services with IOUs and California's fixed pension obligations are estimated at $300 billion or nearly $8,000 per man, woman and child, and this year the Treasury will put America itself another $1.4 trillion in debt, and nervous foreigners are now asking for higher rates of interest.

So Are Americans Addicted To Debt?

Since it's not just individuals in America that are staring bankruptcy in the face, but most states and the country too, it might be reasonable to ask if Americans have become addicted to debt, and I purposely wrote "debt" and not spending, because spending is not bad, but getting into debt is, if you don't have the wherewithal to repay it.

The Oxford English Dictionary defines addiction as,

"The state of being addicted to a habit or pursuit; esp. the state of dependence on a drug to the extent that it cannot be withdrawn without adverse effects".

Are You Honestly In Control Of Your Spending?

A person with an addiction doesn't think about the long term, because if they did then they wouldn't gamble or smoke, or do lots of other things like taking on new debt whilst having no idea as to how it would be repaid.

Maybe the first thing that you need to ask yourself, is if you can control your spending, and then ponder what AA (Alcoholics Anonymous) has told alcoholics for years, "If you need to control your drinking then you're an alcoholic".

Put An End To Impulse Buying

If you really want to get out of debt, then impulse buying would seem like the first thing to get under control, but that can be hard.

The most obvious way to prevent impulse buying is to make a list of things that you need, with the emphasis on "need" and only buy things on the list.

The addicted mind plays games though, and an ever present quandary for the addicted will be seeing a special offer that seems to too good to miss, and feeling that buying it will ultimately save money, and is therefore justied.

If you succumb once in a while, and the effect is minor, then don't be too hard on yourself, because reducing debt resembles losing weight and if you're too hard on yourself then you'll fail, but if the purchases are major or obviously too frequent, then take note and return to your list.

Denial Is The Worst Thing

If you're addicted to spending, then take a look in the mirror and admit it to yourself, because denying it will only make things worse.

Make a mental note of places that cause you to spend money that you don't have, and don't go to them.

If it's your local shopping mall then avoid it, and if you want to go there with a friend, then only take enough money with you to buy a coffee or a snack.

And if there is honestly something that you need to buy there, then simply withdraw enough cash from your local bank to make the purchase, and leave your credit cards behind when you go there.

If the thought of carrying out the above advice sounds awful, and you can't imagine following it, then you're clearly addicted to debt and need to come to terms with the fact right now.

Losing your house or car will make you miserable too, and life without them will be more than "difficult", and having debt collectors phoning and knocking on your door isn't a whole lot of fun either.

Article Source: ABC Article Directory

About The Author: The author of this article was a film producer, and award winning film sound editor for many years. One of his primary interests is economics, and one of his websites -> Get Financial Help features a large number of extremely popular articles about the world's economy in general, and bad debt loans, debt consolidation, debt settlement, and bankruptcy in particular.