Life or Debt: The Psychology of Consumer Debt
Life or Debt Part I: The Long Term Costs of Consumer Debt
Have you ever stopped to consider what debt takes from you? The natural response is often “money”; that being said, I want you to pause and look beyond the short-term analytical frame of mind so often tied with personal finance: I want you to consider where debt takes you as a human being, as an individual. Stop focusing on interest rates and APRs ; clear your mind of all numbers, statistics, and calculations. How can being in debt affect your everyday life and the way you view that life? Judging from the most abstract perspective I can muster, there are three long-term effects of perpetual debt: the loss of one’s freedom, an attitude of hopelessness, and a tax on one’s thoughts.
A Loss of Freedom
In many ways, debt limits your freedom by closing doors that would otherwise be open if your financial prospects were brighter and less restricted. Consider the man who lives a high-consumption lifestyle, perpetually digging himself deeper and deeper into debt, never saving for a rainy day. That man will be laboring late into his life in order to afford even the minimum payments on his debts. Think of the years of retirement that have been foregone, that door of opportunity forever shut because this man lived beyond his means. Those golden years of freedom from work will never come for this man.
An Attitude of Hopelessness
Debt breeds despair and hopelessness. As your financial situation continually worsens day after day, year after year, a suffocating sense of futility envelops your mind, convincing you that you will never be able to pay off your debt; you will never achieve the goal of being debt-free. This discouraging attitude may well start to permeate into other areas of your life; a small business owner may adopt an increasingly negative attitude regarding the future of his enterprise as he reasons “How can I be successful in business if I can’t even be successful with my personal finances?” Similar attitudes may emerge with a student and his academic performance, or a writer and his manuscripts. A shadow of fatalistic futility will follow that individual wherever they go. They may very well indulge in more short-sighted consumption in an effort to distract themselves from the growing sense of despair looming in the back of their minds, damning themselves in the literal sense as they cheapen their lives in an attempt to escape reality.
A Tax on One’s Thoughts
Perhaps the greatest atrocity of consumer debt is that it robs you of the very thoughts in your mind. The man who is crippled by debt also finds his mind crippled by the constant nagging worries relating to that debt and money in general. Mental energies and thought processes that could have been devoted to creative and constructive activities are instead wasted on thinking about one’s debt or pretending that it doesn’t exist. The greater one’s personal debt, the greater the tax imposed upon one’s personal thoughts.
Such is the toll of prolonged, meaningless debt. Such is the sacrifice offered on the altar of credit to the gods of gratification. Such is the price of “the good life”.
Can you afford to pay that price?
Related posts:
- Life or Debt Part II: A Reason to Fight
- Revolving consumer debt to hit $1,000,000,000,000
- Does Debt Control Your Life?
- Is Consumer Debt a Good Thing?
- Consumer Reports’ Credit Cards Worth Holding
We’ve never been in debt except for our car loan, which we paid off as quickly as we could, and our current mortgage, but we live in fear of debt, which is why we live so extremely frugally. Not only does it rob you of the things mentioned above, but it can ruin your health as well through stress, which is a major contributor to illness, and inability to pay for health insurance or medical care.
Most people don’t get that perspective until debt is starting to eat them alive … and then it’s a very big hole to climb out of.
As a child of a parent who was deeply in debt growing up, these side effects of debt effect everyone.
Thanks for the comments so far guys and girls.
Trent – Sad but true – though I’ve found that the size of the hole can vary dramatically from person to person.
FM – I think there’s an article in that!
[...] without the shackles of debt is the only liberating way to live. Jonathan at Master Your Card recently said: Have you ever stopped to consider what debt takes from you? The natural response is often [...]