Debt addiction is a reality for a lot of us. It is a serious problem that has to be addressed because it poses a risk, not just in your personal life but also the economy as well. The country is only a strong as our individual personal wealth – even as our accumulated finances are results of a stable economic condition.
Being a financial success is a dream but it remains elusive to a lot of us. While it may be true that complete debt elimination is not necessary to achieve this, you do have to make sure that your debts are under control. If you fail to keep it within your income limits, it can spiral out to destroy everything that you have worked so hard to accomplish.
But controlling debt is easier said than done especially when you are suffering from debt addiction. It is a financial condition wherein you find yourself repeatedly in debt despite your efforts to organize your finances.
Dangers of being a credit addict
Debt in itself already poses a danger because it compromises the ability of your limited income to meet your basic needs. Being addicted to it poses a whole new level of problems because the problem goes beyond the money. The problem stems from your ability to control yourself and your credit accumulation.
As of quarter 2 of 2013, the Federal Reserve reports that the total consumer debt has risen and most of it can be attributed to student loans and auto loans. Based on the debt statistics from NerdWallet.com, the average household debt as of November 2013 are as follows:
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Mortgage debt: $146,215
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Student loans: $31,240
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Credit card debt: $15,112
If your home owes all of these debts, you have an estimate outstanding balance of $192,567. The Bureau of Labor Statistics (BLS.gov) reports that the average weekly salary for private employees is $829.04 this October 2013. That makes it $3,316.16 for a 4-week month. With an average of 52 weeks in a year, the average annual salary can be computed at $43,110.08. That is a seemingly small amount compared to the average debt that you still have to pay off.
If you cannot pay off your debts and if you let your debt addiction continue to grow it, you will suffer the consequences of your credit obligations. Your debt has the power to take over your life literally because it will limit the money that you can spend on your needs. Not only that, it can take a lot of things from you. Too much debt can lead to:
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Foreclosure – for your inability to pay off your mortgage loans.
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Eviction – for your inability to pay your monthly lease.
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Bankruptcy – for your inability to pay your creditors and lenders.
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Wage Garnishment – when your creditor or lender sues you in court and the ruling is against you. The court will notify your employer to send a portion of your wages to your creditors.
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Divorce – financial troubles are among the leading causes of marital problems.
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Health Issues – debt stress is a serious condition that can lead to a lot of health problems.
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Suicide – people who suffer an emotional breakdown because of debt may have a high risk of committing suicide.
These are the serious effects of a debt addiction that goes unnoticed and untreated. If you think that you are going through a never ending debt situation, you may want to see if you are truly addicted to credit.
Know if you are addicted to debt
But how can you determine if you are addicted to taking in credit? The thing about an addiction is you never know that you have it unless someone intervenes for you. But if you notice a pattern and you want to make sure, here are some signs that should ring alarm bells in your head about debt addiction.
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Buying things on credit even when you have cash. This is an obvious sign of credit addiction. Some people feel really good about themselves when they use their credit card for purchases. If you feel rich because of your card, this creates an urge to use it often.
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Debt is the first thing that comes to your mind before your sleep and when you wake up. This is a sign of debt stress. When you are stressed about something, it stays on your mind constantly.
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When faced with a financial problem, you immediately think about taking in credit to solve it. If you think that debt is the first solution to any financial problem, then you know that you are addicted to debt.
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If you are tempted to take in more credit to pay for your current monthly credit obligations, that is another sign of debt addiction. You are putting yourself through a vicious debt cycle that will never solve the problem.
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Borrowing money without any payment plan. This is an irresponsible way of taking in credit. A payment plan should be one of the first things that you will prepare – to ensure that you have the means to pay off the debt.
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Not having any savings. This is not only an indication of credit addiction, it is also poor management of your money.
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Spending your money on unnecessary things. Compulsive buying is another clear indication of being addicted to credit. If you cannot control your money and where you spend it, that leads to debt accumulation.
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Looking forward to the next paycheck for the expenses today. People who live from one paycheck to the next is caught up in a bad spending cycle that could spiral out of control. If you are writing checks that will be funded by an amount that is yet to come, that could blow up in your face.
If you want to get rid of your debt addiction, you obviously need to think about the bad spending habits that is encouraging you to take in credit. Debtors Anonymous provided a couple of questions that you may want to ask yourself. You can access the questions on their website at DebtorsAnonymous.org.
How to stop your credit addiction
When you know that you are addicted to something, you obviously need intervention. It can be a professional intervention or just the involvement of the people close to you.
But before everything can be dealt with, you need to, first and foremost, admit that there is something wrong with you. That is the first step to truly get rid of any type of addiction. Whether it is drugs, alcohol, shopping or debt, all of these begin with your personal acceptance of the wrong things that you are doing. That is the only way that you can truly accept the sacrifices that you have to make in order to help heal yourself of your addiction.
Once you have the acceptance down, here are some of the things that you can do.
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List your debts. First of all, you have to survey the gravity of the problem. List everything that you owe completely. Make sure you list the amount that you still owe, due dates and who you owe it too.
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Check out your financial capabilities. The next step is to know how much you are earning right now. This information will help you plan how you will slowly but surely pay off your credit obligations.
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Identify the changes that has to happen in your life. Your debt is a result of wrong actions that you did in the past. You have to identify what they are so you can change them.
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Write down financial resolutions. Turn the changes into actual resolutions to motivate you to act on them. It can be a resolution to spend cash instead of credit. Or to put your budget on a very strict debt diet.
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Stop accumulating debt. Some programs to get out of debt will put you on a strict no-debt plan. This is a great way to curb the debt tendencies that you have.
More than anything, the support that you will get from family and friends will help you out of this trying times. You should consider who you will confide in and rely on when you feel like you are slipping back to your old ways. Your strong determination to get out of the debt addiction and the loving support of the people around you should make your battle a lot easier.