Legal Aid Facts

If you want to live debt free, you are going to have to examine what led you to get into debt in the first place - and not just in debt, but over your head in debt.

Some people get into debt because of circumstances beyond their control - an illness, or a layoff.

However, even then, there is usually something more behind it.

This isn’t meant to lay blame, or place guilt, but the reality is: everyone should have enough savings put away to cover AT LEAST six months without income. This should be done before spending money on things like cable TV, or vacations, or designer clothes, or weekly trips to the restaurant. It’s a necessity, not a luxury.

With a cushion like that, potential financial disasters like a layoff or an illness often don’t have to be a disaster.

Many people these days don’t get into debt because of job loss or health problems, however.  They get into debt because of poor planning and not prioritizing properly.

It can be very hard these days to distinguish what’s a necessity and what’s a luxury, with people taking for granted a much higher standard of living than even a generation ago.

Now people who have big screen TVs and ipods and digital camcorders and jetskis…are facing buried under mountains of bills for all of those items, which they put on charge cards, and many of these people are facing foreclosure.

Let’s be realistic - many people with piles of expensive toys are facing homelessness, because of those expensive toys, because they tried to live a lifestyle which they could not actually afford.

If you want to be debt free and financially secure, you’re going to have to make that emergency savings cushion a priority. If it takes a year, if it takes two years, to get that six months of living expenses saved up - that must come first.

And next, you must draw up a realistic budget and look at what you truly can afford. Having all that trappings of a middle class lifestyle can keep you in debt permanently and strip away your financial security.

You can’t simultaneously achieve a debt free lifestyle AND indulge in all of the extras that you’ve indulged in so far. So if bill collectors are calling and causing you stress, if you lie awake at night worrying about becoming homeless, it’s time to make paying off your debts and creating a financial cushion a top priority in your life.