Debt is Risky
There are some people who believe debt can be controlled and can be used in a good way. They believe that it allows you to invest in something that can be considered an asset - a house, a business, etc. You'll hear them throw around fancy debt-related words or acronyms like "OPP," "leverage," etc.
While it's true that there are folks who strategically use debt to invest in real estate, their businesses, etc. - it almost always involves some level of risk. The more debt that you are getting into, the more risk that you will be taking on. I'm not saying that you should be completely risk-averse, but you do need to weigh the pros and cons very carefully.
The worst debt to tie yourself up in is consumer debt. This type of debt doesn't involve an income-producing property, a business, or anything else that can be considered to be an asset. Instead, this type of debt ties your level of risk into things that don't make any money for you. Cars, electronics, vacations, dining out, clothes, etc. - all of these things go down in value while you pay more than you would have paid in cold, hard cash in the form of interest. Once these debts are paid in full, you have little to show for it.
How Debt Affects Your Life
The truth is, being in debt changes everything. You aren't free, even if you aren't physically chain-tied and whipped. The illusion of freedom falls away as soon as you open up that bank statement and see tens of thousands of dollars owed.
People take jobs that they don't like because they need to pay the bills. If they weren't under a tremendous load of payments, could they work doing something that they love - even if that something doesn't pay as well? Of course.
It's also difficult to be as generous as you can be with your money when the bank gets its share first. Nobody wants to lose their car, get sued, or even lose their home. All of this debt is your master - you are its slave. Slaves don't get to be generous with their money until they pay their master(s) first.
When you are ready for retirement, you may find yourself applying to be a greeter at Wal-Mart. Sure, these guys are super-friendly (for the most part), and maybe part of the reason that they are working is because they would rather do something instead of nothing. However, there are still those who are doing it out of necessity. They find themselves with little retirement saved because their best earning years went towards trying to pay down their huge debts. The worst part is that some never get rid of debt entirely as they age into their golden years. If you spend decades feeding your debt habits and lifestyle instead of funding your retirement, guess what? Only you are to blame.
Having large amounts of debt or struggling to make payments is also bad for your health. A little stress is fine, but there are some who are dealing with foreclosure on their home and other problems stemming from living a life with debt. This stress leads to all kinds of health problems, and it's just not worth it - especially if you can do something to get your life back on track and out of debt for good!
The sad truth is that money problems also hurt the family unit. If the parents are constantly fighting about money, the kids are witnessing a less-than-peaceful environment growing up. If it gets out of control, the parents could end up divorcing over money problems - and now the kids are really taking the brunt of the damage caused by debt by having to deal with a broken home. Are the shiny things that rust really worth putting before your family? I didn't think so.
Less is Gold, But None is Diamond
It's very easy to get into debt but very difficult to get out, depending on how long you have accumulated debt. We're bombarded with commercials, advertisements, postcards, letters, phone calls, etc. asking us to get deeper into debt. We live in a society that has a difficult time waiting for things and saving up first. Buy now is the order of the day, and most of the time that involves getting into more debt to do it.
While it may be difficult, make getting out of debt your top priority, because truly, debt sucks. It may take some time - but remember that the less debt that you have, the more golden your golden years will likely be. If you're lucky, you'll have no debt, a healthy retirement savings, and you can refer to those years as your diamond years!
Keep this in mind. Do you realize that if you cut debt out of your life entirely, you would better your relationship with your spouse, you would improve your health, you would add to your wealth, and you would be able to give more generously than ever before? Think about that for a minute. Now, how much is that worth to you?