More is Not Always Better- 6 Ways Debt Limits You Financially

In this blog I almost always advocate that having more is always better.  More money, more from your career, more from your relationships, and more from life in general are all good things.  But since this blog is primarily focused on getting out of debt and living a debt free lifestyle, there is obviously one thing I don’t recommend having more of, and that’s debt. In this article I’ll show you 6 reasons why debt limits you financially. I’ll also recommend some awesome resources that will help you get on the road to debt freedom for good.

Debt Increases Risk

There are some people who believe debt can be a blessing because it allows you to invest into something that increases in value, such as a house or a business.  They use the term “leverage” and “other people’s money”.   The basic concept is that you use a small amount of your own money, along with debt, to achieve a larger financial result.

They do have a valid point.  Many people use it on a daily basis to invest in real estate, equipment for their business, and other items that produce an income over and above what the loan will cost them in interest payments (if it works out according to plans).

But along with that leverage comes risk.  Even when you use other people's money to invest in an income producing venture, the more of it you use, the more risk you encounter.

Consumer Debt Limits You Even More

However, it’s much worse when you owe money that isn’t tied to an item that makes money.  Specifically I’m talking about consumer debt, which is a completely different level of risk, and is seriously detrimental to your life.

Consumer debt is what you have for cars, tv’s, vacations, restaurant food, clothes, and so forth.  These items go down in value or get used up very quickly. They'll leave you with a pile of bills and little or nothing to show for it in the long run. This kind of debt limits you financially in many ways, leaving you poorer over time.

Falling Prey to Marketing Hype

Why do people take out credit card debt and other consumer loans to buy these things that go down in value or get completely used up?  It’s because we’ve been taught to believe the myth that “more is better”.

Too many of us have fallen prey to the marketing hype that’s thrown in our faces every single day.  We’ve been led to believe that we need a brand new car, the latest gadget that’s out of date within a year, and luxury brands not only to feel successful, but just to live a normal life and keep up with our friends.

But at some point you have to realize that more is not always better. Keeping up with the Joneses (who are broke, by the way) is an easy way to end up with that debt limits you financially.

[tweetherder]6 ways debt limits you financially (and in other ways), plus resources to get you back on track [/tweetherder]

Debt = Bondage = Problems

I don’t have a problem with nice things.  I believe if you can afford to pay cash for nice things, there is nothing wrong with having them (within reason).  But when you pursue the accumulation of stuff to the point that you’re spending money you don’t have, and going into bondage just to have those things, then you open yourself up to a number of problems.

The funny thing is, nobody talks about some of the less obvious problems that come with debt.  These problems that can limit your finances in a huge way if you don’t recognize them.

Being in debt, especially for consumer spending, is a form of bondage that limits your freedom, and ultimately keeps you from living your best life.

Let’s take a look at why that’s so.

6 Ways Debt Limits You Financially

Debt is a limiting force that causes you to live your life in such a way that your ability to pay it off is a major consideration in every life decision you make.  It’s a force that negatively affects every single aspect of your life.  The deeper in debt you are, the larger effect it has, even to the point that it limits your ultimate destiny in life without you even realizing it.

Don’t believe me?

Consequences Debt Can Have on Your Life

• Debt Limits Your Career Choices- I can’t tell you how many people I talk to that hate their job, but don’t feel like they can make a change because their job pays well and keeps them from getting behind on their debt payments.  They’d rather be doing “x” or “y” that suits them much better, or they want to start their own business doing what they love, but their debt limits them, keeping them trapped right where they are, because that job pays the bills.
• Debt Keeps You From Being As Generous- If you’re committed to hundreds or thousands of dollars of debt payments every month, you can’t use that money to do what God calls us to do financially, which means feeding people, giving to the poor, providing for the church, etc.  The less seed you have to sow because your limited by debt, the less harvest you can reap.
• Debt Limits Your Future- How many people do you know who can’t retire as they get older?  I get emails every week from people in that situation. The ultimate cause usually comes down to long term indebtedness that they never seem to get rid of.  They’ve spent decades feeding their lifestyle instead of their retirement funds.  Then they reach their 50’s or 60’s and realize they have literally wasted their future on restaurant food, car payments, and junk they didn’t need.
• Debt Affects Your Spiritual Life- Owing lots of money can inhibit your relationship with God.  I’ve already mentioned that it limits your ability to be generous, which is very important spiritually.  It can also limit your relationship with God because you have to work more hours and more days to feed the beast.  You may have to work on Sundays instead of going to worship services.  You have less time to devote to spiritual development, volunteering, and other spiritual pursuits.  It will cause you to have to work more and develop your spirit less.
• Debt Limits Your Health- We all know the problems that stress can bring upon your health.  Having large amounts of debt is stressful, and over time the results of that stress show up in high blood pressure, heart problems, depression, anxiety, and many other issues.
• Debt Can Hurt Your Family Relationships- Studies repeatedly show that financial issues are one of the biggest causes of divorce.  It also has a detrimental effect on your kids. When they don’t see Mom or Dad enough because they have to work to keep making payments, families suffer.  Debt is bad for families, period.

Debt:  Less is More, None is Best

Listen, it’s easy to fall victim to the debt trap.  Especially here in the U.S., where we’re bombarded with over 3,000 marketing messages every day. Also, many financial gurus teach more about managing debt than they do about getting rid of it.  That’s kind of like managing a wildfire instead of putting it out completely.

When it comes down to it, you have to decide what kind of life you want to live.  Once you understand that when it comes to owing money, less is more, and none is best, then you can start changing your life for good.

The best way to start is by educating yourself about money and how to achieve financial freedom for good.  Here are a few great resources to help you get started:

Books and Courses

My Top Money Books Pinterest Page– Dozens of titles specifically geared toward manging finances and becoming financially free.  I’ve personally read almost all of the books that I recommend.

The CFF Online Video Course–  Learn how to get control of your money, get out of debt, and change your family tree.  You’ll also find teaching on marriage and money, giving, and how to resist the marketing manipulation that get us into financial trouble.

The Divine Art of Money- 21 Days to Manage Your Money Like a Pro!– My newest online course that shows you an easy, step-by-step process to manage your money perfectly. You will get total control over your money and never spend more than you make again!

Blogs

Mint.com-  The Secret to Getting Out of Debt

Carrie Smith-  How I Paid Off $14,000 In Debt and Became Debt Free

CFF-  The “How Do You Get Out of Debt?” Series

Tools 

Free Budgeting Forms