DEBT Factors That ENSLAVE
By Javis M . Brunson – Financial Editor
We ' re a nation of borrowers .
We don ’ t save . Let ' s review how we ' ve become enslaved by debt .
Easy credit
Since the bridging years of the new millennium , it was easy for consumers to obtain access to credit . It wasn ’ t that long ago when a slew of 0 % interest credit card offers were being sent to the mailboxes of many Americans . Credit was so easy to get . Many consumers learned how to leverage their credit card rewards as well as balance transfer cards in order to make money .
During the period of easy credit , many Americans played the credit card arbitrage game by taking cash advances and balance transfers from their credit cards , then invested the money into a then rising bull stock market .
It ’ s time that Americans stop blaming the system for their lack of financial education . It ’ s time to take it upon ourselves to learn the financial ropes .
We live in a country where information is all around us . There is no reason any American should be financially illiterate when you can become informed and educated for free .
There are the libraries and the internet for financial material and resources such as money management tools , budgeting tools and investment software that are available at no cost .
Lack of accountability We ' re not accountable for our actions .
The first decade of the new millennium consumer debt ballooned due to subprime loans , jumbo mortgages and other forms of costly debt . These high-risk financial tools were used by many Americans consumers , often with dire results .
I want it now As a nation , we ' re impatient . We want immediate gratification of having the stuff of life , even if we can ' t afford it . We live in a highly consumerist society that encourages materialism . Overindulgence is the norm . It ' s all about more , more , more right now !
Money that should be funneled into high interest savings accounts or into high yield savings are instead being used to keep up with the Joneses , a syndrome that many of us embrace , and which has caused many a household to become enslaved to consumer debt .
Lack of financial education Many of us didn ’ t learn about finance while in school and instead are picking it up a little bit at a time through trial and error . Unfortunately , this lack of understanding and awareness about money management has many individuals vulnerable to making many financial mistakes , which tends to land them squarely into the depths of debt .
Many Americans procrastinate when it comes to their finances , go into denial , or sweep things under the rug when they get into financial trouble .
It ’ s easy to blame the government or the financial industry for causing the rifts in our economy , but we ' re just as guilty about causing the crisis as they are . Both lenders and borrowers contributed to the subprime lending boom , subsequent bust and credit crisis , but guess who ' s getting the lion ' s share of the blame ?
Debt as a cultural phenomenon In other cultures , debt is profoundly frowned upon and is only cautiously used by households . But in America , debt is socially acceptable and embedded into our way of life ; it carries no stigma . If bankruptcy , foreclosure , debt and being broke are things we easily accept in our culture and way of life , then these aren ' t things we ' d readily condemn ( or worry about ) until too late or until we ' re forced to face the painful consequences . When the financial house of cards came crashing down last year , it prompted the government to start making some changes ; they ' ve since introduced policies that help regulate the financial industry to some degree ( e . g . credit card rules ) but in many respects , it ' s still pretty much " business as usual ."
Instead of worrying about what the Fed or White House is going to do next , we should focus on the things we have control over , and take responsibility for our own financial freedom .