Why we get into debt
Understanding our debt choices and the hidden costs.
It seems our culture today encourages using debt to buy just about anything.
The phrase “buy now pay later” is plastered across checkouts and shopfronts.
Have we been hardwired to accumulate debt? Or have our attitudes towards debt simply changed over recent times?
Why do we keep saying yes to debt?
There are 3 main reasons why people take on debt:
#1 We believe that it's the only way we can obtain what we want.
The truth is, there is another way to get what you want and still retain control of your money. Debt promises freedom, but rarely delivers.
#2 We're afraid of missing out
We tend to jump into buying something on impulse or emotion. This can be overcome by having a long-term plan and decision making system aligned to our values.
#3 Sales and marketing has gotten so good
External sales efforts are getting us to buy straight away, overcoming our internal decision making process. We need to be aware of our inputs and influences.
So what is the true cost of debt?
Taking on debt can feel great in the moment, because you've just attained what you've wanted. But the a long-term, you begin feeling the effects of debt in your finances, health and wellbeing.
The three hidden long-term costs of debt debt are:
#1 We loose our freedom to choose
If all our money is committed to paying debt, we give up our agency to choose what our money does and goes.
#2 We struggle to make wise decisions
Purchasing things with debt induces dopamine, a sugar hit of temporary joy, which effects our ability to make sound decisions that align with our long term goals and plan.
#3 We're not positioned to take opportunities
Life keeps moving forward and good opportunities will come your way. Debt robs you of having freedom to say YES to those important opportunities when they come knocking.
Changing your future.
So how do we change the way we do finances?
It comes down to this: We need a decision making process in our financial system.
A decision making process enables us to work with our money and make the daily decisions needed to achieve our long term goals. It's the small, daily wins that give us momentum and joy.
Do you have a system to make clear decisions with your money and track the wins?
Our Finance Advocates can help you create a financial system to crush debt and achieve your goals. Schedule a free call today with our team.
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