What is debt exactly? The definition of debt in Dictionary.com as something that is owed or or that one is bound to pay to or perform for another. If you have made charges on your credit card or have signed a home or auto loan, you are bound to pay the lender for those charges (plus interest, as stated in the terms of the card or loan).

When discussing debt, the concept of credit is always important. What is credit? In regards to money, Dictionary.com defines credit as confidence in a purchaser’s ability and intention to pay, displayed by entrusting the buyer with goods or services without immediate payment. Basically it means that the lender is giving you money with the agreement that you will pay them back later.

Do you have debt? If you are obligated to pay someone back for money you have used or for products and services you have obtained, then you have debt. This could include not only your credit card but student loans, home loans, auto loans, medical bills, insurance bills, gambling debt, and much much more. Unfortunately, when you have debt you are essentially a slave to the lender. When you work to make money to pay that debt, you are not working towards your financial dreams, but instead you are working for money that is already gone. It’s not yours.

But everyone has debt right? What is a debt here or there when Joe down the street is buried under piles of bills and has creditors pounding down his door? While it seems like the norm to have debt, whether a little or a lot, that doesn’t make it a good thing! When you have debt, you are stealing from your future. And just because Tom and Jane are stealing from their future, it doesn’t mean you have to follow suit. See this article on the difference between debt and saving, how $10,000 in debt is NOT the same as saving $10,000. Getting into debt robs you of funds that should be going towards your savings for your financial goals, like a home, paying for your child’s college education, savings for emergencies like unexpected medical bills, retirement, etc.

So what should you do? You should start now by taking steps necessary to get out of debt. It CAN be done, and the sooner you start the better. The longer you wait, the more interest you accrue, and the longer it will take you to be able to pay it off. Now, you should know that this will probably involve making some lifestyle changes. If you need money to pay off debt, you have to stop building up more debt. So you will need to cut expenses enough to be able to put some money towards your debt. Maybe for you it means fewer stops at Starbucks. But maybe it means you need to quit eating out and shut off the cable for a while. It depends on your life and your debt load.

iMoneyCoach provides a great online tool, the debt elimination and budgeting course, which can help you take the steps necessary to get out of debt and stay out. Our approach helps you create a budget that fits your life. Chack it out – it can change your life and set you on the path towards reaching your financial dreams.

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