Discover Debt Freedom!

Ask any financial expert in the country what the biggest problem facing the people of this nation is today and they will say that it is the high level of personal debt that many of the people across the nation are carrying.  Since this century has begun, many people have been spending more than they can afford to live a lifestyle funded by home equity loans and credit cards.  Now that the days of easy and plentiful credit are gone and the values of many homes across the nation are plunging, people are beginning to see just how deep the financial hole that they were digging is and are having a great deal of trouble extracting themselves from that hole.

What Happened?

Over the last twenty years, the culture of the nation has switched from a culture of savers to a culture of spenders.  People were told that it was their national duty to go out and spend money because that is what caused the economy to grow and keep moving.  If you did not have the cash to spend, there were no worries because there was always some credit card company that was willing to give you a credit card so that you could spend more money now and could worry about paying it back at a later date.

Commercials for items became more prevalent over time, with companies trying to convince people that they had to have items that they really didn’t need and taught the children of the country that if they didn’t convince their parents to buy them the latest and greatest things, then they would become social outcasts among their peers.  Of course, the parents that would do anything for their loving children put these new expensive items on their credit cards so that their children would have the same items as all of their friends.  This resulted in many middle class children sporting $200 shoes, $150 jeans, and a new cell phone every several years.

Add this to people purchasing larger homes than they could afford without having to document their income or provide a down payment and college kids having credit limits of thousands of dollars on multiple credit cards and you can see why the nation is facing the problem that it is in today.  Now those payments on earlier purchases are coming due, people are unable to take equity out of their homes to pay off their debts, and they cannot support their current lifestyle on the money that they are making at their job.  This is driving people deeper and deeper into debt as interest payments and penalty fees continue to increase the amount that is owed.

The housing crisis has caused many problems for personal finances as well.  Houses are losing their value quickly because of the housing bubble that inflated prices beyond all reason so people that would like to purchase a home cannot afford to buy them at the current prices.  People that need to sell their homes because they cannot afford them cannot find buyers willing to pay a high enough price to cover the amount of money the owners owe on or have invested into the home so they are stuck in a home that they cannot afford.

The problem is going to become worse before it gets better, as more and more people fall victim to the forces of the economy that are against them.  Over time, the economy will stabilize and reason will return to the financial sector of the country, but not before the many excesses of the current decade have been shed and people that have spent more than they could afford either make the sacrifices that are required for them to regain their financial footing or they declare bankruptcy so that they can begin again new, but with a serious disadvantage.  The problems are not too big to surmount, but it will take time and the cooperation of the entire nation.