Being Debt-Free Isn’t Just Old Fashion It’s Wise

In the past, the idea of being debt free was common. Our grandparents had savings accounts and prided themselves on not owing anyone a thing. Even back as far as the 1960s, there was virtually no credit available except to buy a home or an automobile. Initially, there were no credit reporting agencies and it was hard for a family to get a loan. Because of this, most people used layaway plans at department stores to make large purchases. People would come in and make monthly payments on a large purchase until it was paid off and at that time would take it home. I remember being a kid and my family buying our first color TV in this fashion.

Now, being debt free is a thing of the past. Creditors have done a good job selling Americans on the idea of having it now and paying for it later. Most people in credit card debt are paying for items they might not even own anymore. This is why filing for bankruptcy has become so popular over the years. Filing Chapter 7 bankruptcy will eliminate all unsecured debt including credit cards. Because of this some Americans have no problem charging up their credit cards beyond what they could ever pay back having the knowledge that all they have to do is file Chapter 7 bankruptcy and wipe it out.

In the early 2000s, Americans went out on spending spree based on the equity in their homes that they bought and couldn’t afford. They leveraged everything they owned to live a rock star lifestyle. What happened to the old days when our grandparents were proud to say they were completely debt free?

In 2007, it was time to pay the piper and many Americans were faced with no equity left in their home to borrow on and not enough money to make ends meet. Many lost their homes to foreclosure and were forced into filing bankruptcy as their only option. The lucky ones that had enough equity in their home or a good paying job at a company that wasn’t closed, made it through. Fast forward to now, with all the quantitative easing, banks are pushing out credit and people are once again overspending on their credit cards and taking the equity out of their houses as the real estate market is rebounded almost back to what it was in 2006. All of this is setting up for a repeat of what happened in 2007-2008. Most people don’t realize that America never recovered from the last collapse. Because of the dollar being the reserve currency of the world, and the US has the ability to print dollars at will. It’s worked for the last 40 years, but now most of the world is now questioning the value of the dollar. Now more than ever, Americans should be wary of getting themselves deep in debt. It’s just a matter of time before this house of cards will come crashing down. Now is the time for the wise to become debt free at all costs.