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Demystifying The Three Notorious Myths About Debt

Being trapped in debt can be a stressful ordeal to subject yourself through! The moment you’ve accessed credit from lenders or creditors, you are legally duty-bound to pay it back, regardless of any bad luck that may befall you; such as loss of your job, or even falling sick!

Most probably, you’ve heard these three notorious myths about the debt which are sometimes peddled by some people in employment. But it’s time to demystify them to help separate the precious wheat from the chaff.

First myth: One only gets into debt because of meager earnings.

Truth: It’s never how much you earn or how early/how late you receive your earnings which determine how likely you get trapped in debt. It’s your financial lifestyle; how you put into use that which you earn, and your creativity in sourcing for extra income which determines your level of financial success.

Second Myth: Having a huge debt gives you immunity against job termination at the workplace.

Truth: Well, I think this is madness! Your inability to honor payments of your debts can hinder your concentration both at home and at the workplace. You’ll be forced to focus much of your time trying to figure out possible solutions for your debt predicament. And which employer do you think has time for an unfocussed employee in a world littered with job seekers?

Third myth: If the interest is low, you should borrow that money, even if you lack any pre-planned use of it.

Truth: You are testing the depth of an ocean with your two feet! However, small or big any amount of loan is, always remember that it is a debt which must eventually be paid back. It’s never free money.

Fourth Myth: You can’t sell your structured settlement or annuity because it has a “cannot sell” clause.

Truth: Legislation has been passed allowing a judge to override “cannot sell” clauses so you can get all of your money and pay off your bills and get out of debt. Nothing is more stressful than financial problems. Get your money out and get your financial life stable again. To find a solid company, review the Top-Companies website.

Key Points

  • It’s never how much you earn or how early/how late you receive your earnings which determine how likely you get trapped in debt. It’s your financial lifestyle
  • Having any amount of debt can never shield you against job termination at the workplace.
  • However, small or big any amount of loan is, always remember that it is a debt which must eventually be paid back. It’s never free money.

YOUR PAYDAY SHOULD NEVER BE A DAY OF SORROW!

Nothing can be more humiliating on payday than being the owner of a leaking paycheck! And worse still, if you have no other source of income to supplement that leaking paycheck!

When evening approached, Godfrey left the office in a hurry. He couldn’t wait longer to access his end month salary from a nearby bank’s ATM. As the head chef in a five-star city hotel, he enjoyed a good package, earning more than double his colleagues’. By 6.00pm, he was already the tenth person at a fast-growing queue.

When his turn came, he boldly took out a debit card from his wallet, but what followed next after keying in his secret password was like a well choreographed Hollywood movie. The shock on him, he couldn’t withdraw any amount of money since his account showed a negative balance reading! Thinking that perhaps that was an error, he hesitantly canceled the transaction, removed his card and re-started the process. Weirdly, the negative balance reading still showed up and persisted during his third, fourth, fifth, sixth, and even on the seventh final attempt.

What do you do when you’ve done all you could to access the money you believe is in your bank account, but to no avail?

Still in shock and unable to come to terms with what was going on, he instantly grew wild and started punching the money machine from all angles. Even those waiting in the queue could only helplessly watch as the city chef changed jobs and engaged the rigid and cold ATM into one-sided fight.

No one could tell how he reached home that evening! But how can you comfortably return home empty handed on payday? What would you tell your spouse or kids? And what sort of acceptable narrative would you compose for your landlord?

His first stop the next morning was at his bank’s branch, where his worst fears were finally confirmed. The negative balance which persistently showed up at the ATM was his true account’s standing! From the bank, he was referred to his employer to ascertain whether he had been correctly paid that month or not.

Godfrey was trapped in debt. That month, he had secured mid-month advance credit from both the bank and from his employer and was paying three separate installments for personal loans from three different financial institutions. Equally, he was servicing two Sacco loans, was paying installments for a television set and a high-end music system he had acquired via credit through two separate hire purchase companies. He had even exhausted the limits on his two credit cards!

He found it hard to believe that money sent to his bank account was even never sufficient to fully pay for the mid-month advance he had been offered. Hence the negative account balance reading.

Your payday shouldn’t be a day of sorrow, or a day to walk home empty-handed. It should be a day of joy, a day to celebrate all the thrills and pains associated with doing the kind of work that you do: waking up early in the uncomfortable mornings, returning home late in the evenings, attending those sweaty business meetings, overcoming the sometimes stressful work targets and deadlines et al.

Payday should be a day of reward for all the emotional, physical, and psychological turbulence you go through in doing the kind of work that you do. Consequently, to get value for your efforts and even appreciate both your employer and your earnings, you must safeguard that paycheck. But if you fail to do so and begin worshiping unhealthy financial behaviors, then you’ll always have nothing, or very minimal earnings to carry home each payday.

If not humiliating or hurting, how else would you describe the feeling of going to work, year in year out, but at the end of it all, have nothing to show for all that effort!

You’ve got to do something! While your friends, colleagues and even relatives; some of whom earn less than you do, continue to do so much with their paychecks, your progress in life appears stagnant, with increasing financial responsibilities and a decreasing income. And NO, you are not cursed! You are just an unfortunate owner of a leaking paycheck! But the sad reality is, you are never alone! Millions of people out there are owners of leaking paychecks.

The consequences of owning such leaking paychecks have been dire. While some people have been forced out of employment due to their inability to take charge of their finances, some have witnessed their cherished relationships go up in smoke due to their financial inability to take care of their loved ones. And in most unfortunate cases, others have ended up committing suicide in an attempt to run for cover.

Key points

  • Nothing can be more humiliating on payday than being the owner of a leaking paycheck!
  • Your payday shouldn’t be a day of sorrow, or a day to walk home empty-handed.
  • Payday should be a day of reward for all the emotional, physical, and psychological turbulence you go through in doing the kind of work that you do.
  • You’ve got to do something! While your friends, colleagues, and relatives; some of whom earn less than you do, continue to do so much with their paychecks, your progress in life appears stagnant, with increasing financial responsibilities, and a decreasing income.

http://www.dof.ca.gov

http://www.doe.virginia.gov/instruction/economics_personal_finance/