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Simple Thoughts About Debt

by Donna Maria

Today’s message at my church was about money. The speaker shared W.I.B.O., an acronym representing the four things money represents: worship, investment, benevolence and obligation. It will take me a few days to digest the entire message, but the “obligation” part speaks immediately to me in profound ways because I was once in a lot of debt.

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According to numerous news reports, Americans are not only in debt, but they also seem to be at a loss as to how to get out of it. According to a report released by Risk Metrics, in December 2007, an average of 7.6% of all credit card loans were either at least 60 days delinquent or had gone into default, up from 6.4% a year earlier. More recently, Bloomberg reports that credit card defaults are poised to rise beyond 10 percent this year.

For small business owners who are in debt, I’m proof that you can get out, but it’s a challenging process and you will have to sacrifice to make it happen.

For small business owners who are not in debt, especially those just starting out, don’t let this happen to you. Keep personal credit card spending to a minimum. I even recommend eliminating credit card debt entirely if you can. I have done this by using using coupons, cutting back on eating out and leaving those new Jimmy Choo shoes on the rack until I can pay cash. It’s a good habit to get into, especially since I’m also saving up for two college educations and trying to make sure I’m not on the cat food retirement plan.

If you’re already in debt, start a plan to get out. Syndicated radio show host Dave Ramsey has some great resources to help you get started.

If you stay out of debt personally, you’ll free yourself up to invest more money in your small business. You’ll sleep better at night too.

Question: What do you think? Is it unrealistic for most people to cut up the plastic? I don’t think so, but I want to hear from you.

* This article first appeared in the Bootstrap Babes blog on February 17, 2008. It has been updated slightly for context for this post.

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Tagged as: credit cards, debt, Money, small business

posted on May 31, 2009 ·

Facebook comments:

  • http://www.dianelotions.com/ Diane Seago Atkins

    It is possible to quit using plastic! Around 2002, I had over $10,000 on my business credit card plus debt on a couple of personal credit cards! I made a decision to pay off the debt because it was such a burden–and it took me three years to do so!! I switched to using debit cards for business and personal uses and did not buy anything until I had the cash in my hand or money in my checking account. The credit cards were banned to a desk drawer, and I did without and created with what I had. I focused on the smallest balance first to be sure I saw progress. I transferred other balances to lower-interest cards and chose the next one to focus on until they were all paid off. The key is to stop charging and do without.

  • http://www.dianelotions.com Diane Seago Atkins

    It is possible to quit using plastic! Around 2002, I had over $10,000 on my business credit card plus debt on a couple of personal credit cards! I made a decision to pay off the debt because it was such a burden–and it took me three years to do so!! I switched to using debit cards for business and personal uses and did not buy anything until I had the cash in my hand or money in my checking account. The credit cards were banned to a desk drawer, and I did without and created with what I had. I focused on the smallest balance first to be sure I saw progress. I transferred other balances to lower-interest cards and chose the next one to focus on until they were all paid off. The key is to stop charging and do without.

  • http://www.indiebusinessblog.com/ Donna Maria

    @Diane: Woo-hoo! Congratulations to you! Your journey sounds very much like mine. Debt is a huge burden and, as you said, “doing without” for a while is part of getting out of it. Thanks for sharing your wisdom and experience here. It inspires me and I’m sure helps others who read it.

  • http://www.indiebusinessblog.com Donna Maria

    @Diane: Woo-hoo! Congratulations to you! Your journey sounds very much like mine. Debt is a huge burden and, as you said, “doing without” for a while is part of getting out of it. Thanks for sharing your wisdom and experience here. It inspires me and I’m sure helps others who read it.

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