America has been built on a system of credit. For better or worse, it’s the only way in which the vast majority of Americans can make big ticket purchases and obtain what they need to get themselves started in life. Buying a home, getting a car, purchasing furniture, maintaining utilities and services — all of these things can or will depend on credit to be obtained.
This is a very powerful system which enables people to acquire what they need quickly without finding themselves stuck and unable to proceed with modern living. The opportunity to obtain goods before paying for them in full is very intoxicating however, and often leads to living beyond ones means to make displays of success. Eventually for some, credit becomes less of a tool and more of a means of getting what they need to make themselves look like they’re better off than they actually are.
That sort of behavior is very dangerous when it comes to personal finances, because it can only lead to severe debt. Even for individuals who make a considerable amount of money — around $60k or more — they’re susceptible to the effort of “keeping up with the Joneses”, so to speak, which puts them beneath what they can actually afford. For every raise comes an even more expensive home or piece of property that represents the accumulation of material goods as a sign of wealth.
Wealth isn’t what you own, however. It’s the amount of money you have beyond what you owe. If you’ve buried yourself in debt for the aforementioned reasons in order to get where you are in life and you only continue to amass it, then you need to step back and consciously evaluate your position in life and come to an honest conclusion about where you are and how you got there. It’s okay to be in debt, provided you recognize it and treat it openly and honestly. If you just ignore yourself and constantly compare yourself to others financially, then you’re only harming your economic stability by avoiding the reality of your finances.
If you’re in debt, you simply need to be honest with yourself and deal with it in a way that can reduce and eliminate it. It does hurt being in debt. The inability to afford what you want, the lack of flexibility when it comes to choosing options, the lack of recreational pursuits — all of these things can make you feel very bad about yourself. The only way to recover from the stagnation of debt is to work your finances in a way that focus on combating your debt and less on your outward appearance. This has the benefit of improving both your financial situation and your state of mind. You get the benefit of being able to actually afford what you purchase and the satisfaction of knowing that it’s all honest and truly yours.
In one way or another, we’ll all eager to get ahead in life. However, any accomplishments should come as they’re due and based on what you’ve actually managed to acquire. If you try to jump the gun and get stuff now without having first earned it, you’ll only be setting yourself up for debt. This is unavoidable for some things, of course. You simply need to keep in mind the differences between long-term investments and vanity.
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