The Science of Debt

It’s a sad, yet simple, truth, that once you’re in debt, you tend to stay in debt.  Debt has a sticky quality to it, almost like gum that gets stuck in your hair.  According to research conducted by the University of Chicago, people who are in debt now will most likely be in debt five to ten years from now.  The only difference will be that they are in even more debt.  This survey surveyed 6,000 adults born between 1957 to 1984.  People who were in debt at age 20 had an average debt of $10,900.  Five years later, this figure quadrupled to $43,700.  And so it goes.

Being in debt, by definition, means that you’re living beyond your means.  This is easy to do for awhile, but it soon runs out of control.  Suddenly, you find that there is not enough money to keep up with the interest rates you are paying on your debt.  Maybe there is a job loss or illnesss.   Something as small as missing a payment drives the interest rates through the roof.  In fact, some credit cards have been known to increase their interest rates just because you were late with another creditor!  They can do this based on the fine print in their contract.  The fine print can be tricky! 

People find themselves in a spiraling event.  When debt gets to the point that you can no longer pay, your credit rating is negatively impacted.  When your balance becomes too large compared to your total credit available, your credit rating is negatively affected.  The result is that money becomes more expensive, and we have to pay more to borrow money, even though we can afford it less.

The solution is simple, but seemingly very difficult.  The obvious solution is to spend less and you’ll get out of debt.  Realistically, though, how likely is that?  The use of the SeeBeyond2020 online calculator will allow you to pay off your debt, get out of this maddening spiral, without having to spend less.  This will show you how to pay your debts the right way, the way that banks don’t want you to know about.  I encourage anybody who is in debt to get this program, so you can avoid becoming another statistic.

Chad Tepfer

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