After Debt – Can We Get There?

(Wimpy key chain available at The government debt ceiling crisis has been averted, for the time being.

What about our debt crisis?

“While government debt sits at 94 percent of national revenue, U.S. household debt sits at a whopping 107 percent of personal income.” writes Steve Beck at U. S. News.

The question for us is, do we follow our leaders off the cliff, or get a hold of our personal finances?

Mr. Beck recalls the glory days of spending, when even credit card interest was tax deductible.

Buy now, pay later.

In inflationary times, when the government is running the printing presses overtime, it pays to be a borrower rather than a lender.

As a general rule.

It only applies if your income increases at least as much as inflation.

That is why all those cost of living guaranteed increases in compensation came into contracts and government benefits, people realized that inflation was robbing them of the nominal value of their money, so they had to get more of them just to stay in the same place.

As the saying goes, denial is not a river in Egypt.

Before we get to retirement planning, before we get to charitable giving, and livable family budgets, we have to get out of having more than 100% of our income committed to repaying debt we already have.

I have to tell myself how horrible it is to keep paying hundreds of dollars per month in interest on old credit card debt, and how pleasurable it will be to pay it off.

I have to realize the pleasure of getting out of debt will be so much better than the pain of being there.

Now, with #2 daughter graduating from college in 3 years (God bless her!) family finances will take an upward turn.

But, with a household of two self-employed people, it is a struggle.

A struggle that must be won.

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