Stop Digging

What is the first thing you do when you find yourself in a hole?

Most answer this question by saying "climb out".  The correct answer is to stop digging.  Before one can work his or her way out of anything, one must first cease getting further behind.  This idea applies to any aspect of life.  However, the relevance to the financial arena is incredible.


People love debt.  The entire world is addicted to it.  From our average credit card balances to car payments to the trillions run up by the governments of the world, we see how debt is an addiction.  People simply cannot live without it.  If the U.S. government had to eliminate debt in the next 12 months, it would cease to operate.  Sadly, many individuals find themselves in this same situation.

Debt is a master which enslaves one for life.  People do not think about the consequences when making the purchase.  Instead, they are trained to look at the monthly payment only while appeasing the need for instant gratification.  The total amount spent means little to people.  This is what the financial institutions of the world depend upon.  To them, this is "money in the bank".  Anyone who has lived under serious debt for a long period of time knows what this is like.  It is hell on earth.  Yet so many succumb to the temptation.

What is sad is this is nothing more than a habit.  Did you know that 50 years ago few people were in debt.  Other than a mortgage, little was financed.  If a new car was to be purchased, a family saved up for it.  The same was true for appliances.  When the refrigerator broke, a new one was purchased with cash.  Making payments was something that most avoided.

We saw the same behavior with vacations.  There was a time when traveler's checks were popular.  These financial items were used in lieu of cash because of the fact that if stolen or lost, they could be replaced.  Credit cards were not a thought.  Today, with the exception of some overseas travel, people do not purchase traveler's checks.  Instead, they simply charge the entire trip to the credit card.

While I admit convenience is a benefit, the truth is that most spend more than they can afford when choosing this route.  Charges will be accepted as long as there is room on the credit card.  What is available in the bank account to pay the balance in 30 days is not of consequence.  This causes people to overspend.

Change In Behavior

Since debt is basically a national epidemic, a change in behavior is needed.  Of course, this starts with the individual i.e. you.  So, how does one begin to change?

Like the title says, the first thing that one must do in any situation that is creating negative consequences is to stop.  Cease what you are doing.  It is understood that a reversal in behavior is needed.  However, before that can take place one must first stop going down the present path.

This idea is akin to a car traveling the wrong way down a street.  Obviously, the solution is for the automobile to be traveling the other direction.  Before that can occur, one must first stop the car from going the wrong way and then he or she can turn it around.  The same holds true here.

Therefore, when looking at the financial arena, it is crucial you stop digging a deeper hole.  This means, in most instances, cease spending.  People get in trouble because they spend all or more than they earn.  The first order of business is to not buy anything unless it is an absolute necessity (food).  Do this immediately and carry it out for 30 days.  This will help you to develop the habit of not spending.  Then, and only then, can you start to reverse course.  Nothing will occur until you stop digging a deeper hole.

Habits are learned and they can be unlearned.  Behavior modification is difficult.  Nevertheless, when you live under the horrors of debt, it is a necessity if you are going to enjoy any freedom in life at all.  We live in a capitalistic society were money is a central unit in our lives.  Non responsible behavior is a pathway to sure failure.  Stopping the senseless spending is one way to start the process of embracing responsibility.

Always remember the first rule of wealth creation:

Spend less than you earn and save/invest the rest.

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