The True Cost of Happiness: The Real Story Behind Managing Your Money

Chapter 12. Debt: WIPE THE SLATE CLEAN

Nothing can derail a financial plan quite as effectively as debt. It is a tremendous drain on the resources—financial, psychological, and emotional—that should be working to make your dream life a reality.

We're all familiar with the scary realities of debt. Still, the average American household has racked up between $7,000 and $9,000 in credit card debt, depending on who is doing the calculating.

Credit card companies are eager to help you bury your head in the sand. They bombard you with offers to raise your credit limits, shift balances, and the like. Some will even send you checks to lend you money to pay off your loan!

Stacey and I know many people who have tried to budget their way out of credit card debt and failed. Planners often complain that they help clients get out of debt only to see them fall back into the debt trap over and over again. Look at the statistics. High debt levels are the norm in our society. Something is clearly not working when it comes to helping people fix this problem.

We think the problem lies in the fact that few people see debt for what it really is: a spending problem. There are few things in life that work as simply as money. Don't spend more than you have.

Debt is a great example of the duality of human nature. We know it's bad for us, but we do it anyway.

When you think about your finances, it's easy to determine if your debt levels are a problem. Just be honest with yourself. You and Stacey looked at some of ...