We charge things we can’t afford, spend when we don’t have any money in the bank, borrow student loans that we are not sure we can pay back and buy more house than we can afford or need.
In the last 30 years, there were approximately 1 million bankruptcy filings per year (Christian Bankruptcy Attorney).
What we often fail to realize when we are living outside our means thanks to credit is that we are stunting our future. The more we charge, the more of our future money must be used for debt repayment. We impede cash flow and sacrifice our future.
Life Without Credit Is Perilous When You Are In Debt
My husband and I swore off incurring any new debt five months ago. We were able to aggressively pay down debt for four months, but this month we had a budget shortfall.
If we hadn’t vowed not to use credit, it would have been extremely easy to charge some of our expenses to make up for the cash shortage.
It would have been painless.
Instead, we are struggling to curb our spending drastically and to find ways to increase our income this month.
Every day I am thinking about money and how to make more to cover our shortfall. Every day I feel anxiety that I should not spend money.
I look at my cupboards and see a dramatically decreasing stockpile, and I want to go to the store and buy more groceries. But I don’t. We have food; we are not starving. The stockpile will carry us through the month as long as we supplement carefully with fresh fruits and vegetables.
But this month, I feel poor. I feel the pain of not having enough money this month.
If I were charging, I would not feel that pain.
If I am to be completely honest, part of the reason we don’t have enough money is because we took out too many student loans and because we used credit when our income was low.
Two years ago, we sacrificed our future by using too much credit. Now, we feel the pain today.
We are lucky. We agreed to stop the insanity of credit usage before we fell behind on monthly payments and had to file bankruptcy.
Learning from the Past and Changing the Future
I grew up in a home where my parents had a low income and used credit to supplement and help pay their expenses.
They did not live an elaborate lifestyle, but they also didn’t actively look for ways to increase their income.
They accepted that they would always struggle with money. They accepted credit card usage as a necessity.
When my dad earned a larger paycheck because of overtime, they spent a small part of it as a treat, and the rest they applied to credit to pay down their balance.
But because they didn’t create an emergency fund, they never made their way out of the cycle.
My son is eight, and I see him emulating some of our previous behaviors. We used to go out to eat a lot. Now we don’t. We haven’t eaten out with any consistency for about a year now. While we used to eat out once or twice a week, we now eat out once every three months or so, always with a coupon from Groupon or Living Social or some other site.
In the beginning, my son used to whine to go out to eat frequently. Now, he only asks ocassionally.
Because our behavior changed, his changed.
He is not yet eight, so we have plenty of time to reform our life and teach him better money management skills. He is already learning. He has three banks, one for save, spend and give. He is learning to budget his money and to curb his impulses.
Yes, we have stopped incurring new debt to pave a better path for our own future, but it is also to teach our son how to manage his money.
I don’t want him to think using credit is normal.
I want him to learn to save and wait to buy until he has the cash. I want to break the cycle of detrimental credit use with him. I want him to have a better future. But that begins by improving our future, even if it means struggling financially now and feeling the pain of not having enough money.
This post is a part of Women’s Money Week 2012. For more posts about , see womensmoneyweek.com.
Photo courtesy of Images_of_Money