Everyone knows that consumer debt is costly. But too few people "really" understand just how expensive it actually is. And therein lays the danger.
As consumers … we routinely take on consumer debt … without "clearly and fully" comprehending just exactly what it is … that we are committing ourselves to. That is really dangerous.
Our consideration often goes no deeper than …
- Is the payment OK?
- Is the interest rate "about right"?
If the payment is OK and the interest rate sounds "about right" … we're in. Sound familiar? And so … we often do incredible financial damage to ourselves … without even realizing it. Smart choices can not be made with such minimal understanding of what we are actually accepting.
Albert Einstein once said … "Problems can not be solved at the same level of awareness that created them".
So when it comes to consumer debt … how do you change your "level of awareness?"
Clarity about the real impact of long term exposure to … the "beast" that is consumer debt … can only be obtained by …
- First … accurately understanding the direct truth (expressed in dollars … not interest rate) about your current debt situation.
- And also … fully and completely comprehending … the significant impact that a long term reduction in available investment dollars has … on your future financial security.
In other words …
- You must clearly understand … "what you are taking on."
- You must clearly understand … "what you are giving up."
Only then will you have the information needed in order to make a smart financial choice.
By the way … do not expect your lender or credit card company to give much priority to making sure that you are clear about what you will ultimately end up paying them. They do not really want you to know … that truth. That's why you will not see it on your statement. And since they really do not want you to be aware of just how much you will end up paying them. They just "conveniently" do not remind you.
And so … it is up to you to defend and protect yourself from the ravages of consumer debt.
Arm yourself with knowledge. Make sure you know exactly what you are committing to.
Make sure you understand … "What you are taking on."
Make sure you understand … "What you are giving up."