Wikipedia offers a fairly good, generic definition of debt:
A debt is that which one party, the debtor, owes to a second party, the creditor; usually this refers to assets owed, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.
When describing debt, I like to focus as much on the emotional, intangible effects as the financial ramifications of owning money.
For me, accumulating debt represents the leveraging of one’s future. It means limiting options. Obligating your future earnings. And when you factor interest, it means cheapening future dollars you earn.
Debt is like having an albatross hanging around your neck. You feel weighed down, uninspired, hopeless. You chest feels heavy all the time, like someone decided to park a dump truck’s back tires across your back.
But not all hope is lost. Being in debt also represents a challenge. The goal: getting back to zero. Getting back to black. And the deeper the hole, the more effort required.
As they say, the very first thing to do when you find yourself looking up from a deep hole is to stop digging. Easier said than done.
Sure, you can cut up your credit cards (and probably should), and look for various ways to save money every month.
However, debt doesn’t play fair. Each month you owe money, interest is constantly accumulating. It grows while you sleep.
It compounds while you are work. It increases the depth of your hole automatically, whether you continue to borrow or not. In that way, it is the most insidious of financial evils.
For many, debt represents past mistakes. That is certainly the case for me.
There was the time I suffered from car fever and financed an SUV I could ill-afford.
Then there was the time my wife and I took the kids Disney and left a trail of credit card receipts from our home to Orlando and back.
Oh, and there were those years of college I financed using a dangerous cocktail of credit cards, student loans and personal loans.
Fortunately, I’ve recovered from those spendthrift ways, and I did eventually finish my college degree. But, the debt lingers on.
Every month when I receive a bill in the mail, I’m reminded of those mistakes. I sure would like to find a way to eliminate those reminders, once and for all.
What does debt mean to you?