Today’s post comes from our Ottawa debt consolidation expert, Shawn Frank . You can find out more about how Shawn Frank helps families and businesses in Ottawa get out of debt here.
I’m going to talk about a condition that I see a lot with families. It’s the treadmill of debt, a cycle of borrowing money, paying interest, and suffering at the hands of creditors.
Here’s a depressing truth about getting out of debt. On a $19,000 balance it would take 99 years to pay off if you make the minimum payment of $465/month. Information like this is found on every credit card statement – if you are brave enough to read it! That means it will take you $552,420 to pay off a $19,000 credit. The bank will make $533,204 from you. No wonder the banks are so rich!
What if you were able to save this money instead of making the banks wealthier, in 5 years of saving this money you would have accumulated over $27,900 not including any interest earned?
Many families get caught in a treadmill of debt where they are only able to make the minimum monthly payments on their line of credit and credit cards. Occasionally they are able to slightly pay down the balance until the next emergency arises requiring them to use credit again.
There are so many families out there struggling with debt. While they continue on the treadmill of debt they face multiple symptoms that affect their health, stress, quality of life and family stability.
Even worse, they experience the negative effects of the “Time Value of Money”, something even Albert Einstein recognized as a scientist. Many consumers experience overwhelming stress when on the treadmill of debt. It is well documented that many people experience insomnia, agitation and short tempers, that lead to being unfocused at work or when spending time with the family.
When you know you are in financial trouble and you don’t know how to get help, many people experience an overwhelming sense of “dread”, a feeling that comes from realizing your financial life is out of control and you have no way to deal with it or see a future without debt.
Debt Affects Your Health
It sounds obvious but what many people realize is that all that stress negatively impacts your health. The constant worrying about your bills and your future leaves people feeling drained to the point that meals get missed and exercise is all but forgotten. Who wants to go out for a run when you have not been able to sleep in days and all you think about is money. All that stress and restless nights have a huge impact on your health.
Debt Affects Your Qualify of Life
It has been determined that people in debt just don’t seem to enjoy life as much. Who can think about going on a vacation or even a hike in the woods when you are struggling to pay your bills. Most people have a hard time planning activities that are fun – even when they don’t cost a lot of money. People tend to spend less time with their families, take fewer vacations or even enjoy their time outdoors.
Debt Affects Your Family Stability
Although there is very little information in this area one of the leading causes of divorce is still “financial differences”. Everybody wants to have a life filled with fun and time with the family but when money is tight people sleep less, can’t focus and don’t want to be around other people. When financial differences arrive many people take a shorter term view and ‘get out’ now instead waiting years for their financial situation to improve. Financial problems are still one of the major reasons for divorce and once this happens not only do the parents have to now support separate households, the kids have to split their time between the parents. All of these symptoms lead to a number of hidden consequences.
Debt Makes Emergencies Even Harder
You know you need an emergency fund when times get tough due to job loss or sickness but where is the money to save for this? All your money goes to making your minimum payments and not taking care of the long term needs of your family. Let’s face it, without an emergency fund families rely on credit to survive, but what if you have no credit due to overwhelming debt. What will your family do then?
Debt Stalls Your Retirement Planning
The other major consequence is that planning for retirement becomes a dream not a reality. Do you really want to spend the last 30 years of your life in poverty? Currently, over 50% of Canadians retire in poverty with little or no savings, assets, or income. When almost 30% of your life is spent not working it’s a long long time to be broke and penny-less.
Families don’t realize that by ignoring this treadmill of debt that you are sacrificing your long term financial well-being, becoming paralyzed by your debt and creating stress that affects you and your family.
There are many ways of addressing debt that will quickly reverse the treadmill of debt. Take the time to think about what you want in your life and if debt is dragging you down, choose another future for you and your family, choose a future with no debt.
If you do that your life is going to get a whole lot better a whole lot faster. The time is now to address your debt so that time is working for you and not against you.
Visit Shawn Frank at his Ottawa Office
Shawn Frank is our debt consolidation expert in Ottawa. You can find out more about how Shawn Frank helps Ottawa families and businesses get out of debt here, call today at (613) 515-0161.
