It’s Time to Escape Slavery—From Debt

Poverty lifestyle: Spending more money than you make–mostly on perishable goods and high-priced, low-value, depreciating assets (examples: entertainment, clothes, cars)–and borrowing, paying interest and fees (usually via credit cards) to cover the difference.

Wealth lifestyle: Spending less than you make and saving the difference, investing in sensibly priced, diversified, appreciating assets (examples: stocks, mutual funds, real estate, bonds, business ownership), earning interest, appreciation, profits and dividends in the process.

The difference between the two lifestyles is not how much you have, but what you do with what you have. This is true whether you are a single-mother living on public assistance, or a professional athlete with a multimillion-dollar performance contract–as the recent ESPN 30 for 30 documentary “Broke” dramatically illustrates. In the words of Dr. DeForest B. Soaries Jr., the creator of The Billion Dollar Challenge national debt pay-down initiative and author of dfree: Breaking Free From Financial Slavery, “The only thing worse than not having what you need is not using what you have.”

As I’ve said many times in this blog and on other media platforms, wealth and poverty are not questions of “How much do I have?”, but “How am I choosing to live?” Are you pursuing Wealth for Life, the mantra and mission of Black Enterprise? Or are you living in slavery–to debt?

According to a recent survey of 1,900 Americans by the National Foundation for Credit Counseling, 22 percent of respondents admitted that they couldn’t make ends meet each month if they didn’t have access to credit. Another 24 percent responded that going without credit would require a dramatic change in lifestyle. This means that 46 percent of those surveyed are credit dependent–living beyond their means and pursuing a poverty lifestyle. In other words, too many of us are indentured servants, if not outright slaves, to debt.

With the holiday shopping season approaching, many of us are planning to go even deeper into debt slavery, preparing to leave a huge chunk of coal–in the form of credit card bills that will take months, if not years, to pay off–under the Christmas tree. My hope is that you will consider the following before you make a bad situation worse.

If everything you bought was on sale, why are you broke? Hint: Retailers are not in the business of helping you to spend less. No matter what the advertising says, it’s impossible to “spend your way to savings” unless you’re banking, not spending, the price difference.

Attention shoppers: Using credit cards to buy things you don’t have the cash for (in other words, you can’t afford it!) is ABUSING CREDIT.

Never shop without a listor without a budget. If it’s not worth budgeting and saving for, it’s not worth borrowing money (via credit cards with double-digit interest rates) to have.

It’s not about deprivation; it’s about prioritization. Living within your means allows you to own nice things, instead of you being owned by your things because of your debt burden.

Free your mind, and your finances will follow. If you can’t change your mind, you can’t change your money.

Or you can keep living the way you’re living. The choice–and the consequences–are up to you. In the words of Harriet Tubman: “I freed a thousand slaves. I could have freed a thousand more, if only they knew they were slaves.”