Understanding Debt

Most people don’t understand their problem when it comes to debt and this can be the main problem. If you think about it people don’t go into debt overnight, it is usually a long process that gets them into it in the first place. What I am trying to say is that if you have bad habits with your money you are not only bound to stay in debt but to make it worse.

Reducing your debt is the first step in getting back into good standing with the credit card companies. This should be your long term goal.

Let me give you an example that my friend James woke me up to and I believe it to be the truth. James works cleaning the trains in New York City and he loves it except he doesn’t work close to home. He chooses to work further away from home because the work is easier. He chooses to work where the upper class people live because the trains are cleaner. This is not to say that the poorer people are dirtier than the upper class it is just that they leave their lottery tickets all over the train. The richer people buy books to read while on the train and take them home with them.

Sure there are some lottery tickets on the upper class train but not as much. It made me think a little bit about the way people spend their money. If you spend your money over and over on lottery tickets you will not be rich but go broke trying to win it big. I am sure the lottery targets the lower class neighborhood more with their advertising too.

If you were to put the few bucks that you spend on the lottery into the bank or use it to pay your bills you would get yourself out of debt. Playing the lottery will not unless you are the one in 100 million lucky players. Notice I didn’t say one in a million because the odds are higher than you think.

I asked James if he plays the lottery, he just laughs and tells me no “I put my money in the bank and get interest” he says. “I Let my money work for me”. I told him that’s what I did except I put mine in an ING Direct account and get much better interest rate. He thanked me and asked me if I had any other great ideas.