100 Tips for 2011 » 10 deadly sins that lead thee to debt
For many years, I have been helping readers get out of and avoid unwanted debt. I recently saw an unusual TV special about holiday excess. It featured a lively host going by the name of "Reverend Billy" from the "Church of Life After Shopping". Billy calls our fascination with shopping the "Shopocalypse." This has inspired me as I write this year's top 10 list to share with you the top 10 sins that lead to debt.
For those of my readers who are committing any of these sins, I recommend that you repent and mend your ways as soon as possible.
Have a loan threesome
Co-signing on a loan for a friend makes a three-way transaction -- you, your friend and the creditor -- that often ends in disaster. Never co-sign a loan unless you are willing and can afford to pay the loan yourself. As a co-signer, you are equally responsible for the loan and should the other party default, you will be pursued like a long-lost lover to make good on the debt.
Many times you do not know that the original borrower is late on the payments until you find that your own credit is knocked up. Once the less-than-blessed event of a delinquency appears on your credit, the negative mark cannot be removed for seven years. If you co-sign, expect to pay.
Abuse your credit to live beyond your means
If you must buy groceries, gasoline or other essentials using credit because you have no money in your checking account
, you need to take immediate action. To avoid debt, spend less than you earn. Unless you do, you will create an ever-increasing debt load that will one day come crashing down on you.
Overspend devilishly on luxuries and wants
Shopping as entertainment is dangerous. If you spend on credit and charge items that you cannot afford, such as a house full of furniture when you feel the temptation to redecorate, or a suite at the Bellagio in Las Vegas when you hear the dice calling, you are on a quick trip to overheated and unaffordable debt
Splurge like there's no tomorrow
Unless you believe in divine intervention, you need to know how your monthly income is spent. You must have a plan for spending. Otherwise, you let other people plan your spending. We all like to dine at a great restaurant. But how much can you afford to spend? Not having a plan is like letting the restaurant owner decide your order for you.