I have a friend. After spending a long time in hiding, she came clean to her husband about something she had hidden for over five years. Every other week, for over half a decade, she had been finding her way to payday loan establishments, and she had been taking out high interest debt without his knowledge. With interest rates over 400% per year, she was stuck in a seemingly never-ending cycle of paying off the loan of two weeks only to need to get another loan to take its place for the next two weeks. Within this cyclone of never-ending debt, she was spending about $500 every month in interest charges alone. I turns out, she is addicted to debt.
Yes, the great majority of us have one debt or another, but when does our debt behavior classify as an addiction? It doesn’t need to get as bad as what was experienced by my friend, but it could also be much worse.
What is an addict?
First, let’s understand addiction.
In its most simple terms, addiction has three parts: 1) you are taking part in an action that is pleasurable but 2) the continuation of this action becomes compulsive and 3) these compulsory actions interfere with your ordinary responsibilities.
Unfortunately, there are those of us that, through an unlucky hand of nature versus nurture, are more likely to fall prey to cycles of addiction. Fortunately, there are testimonies of millions as ready assurance that we can maintain a healthy, successful life even as an addict.
So..are you addicted to debt?
Have you ever wondered if you may be addicted to debt? How would you know? Through a great deal of research compiled from the likes of The Consumerist, You Need a Budget, and Money Crashers, I present to you a checklist that you can use to determine if you are, indeed, addicted to debt. I’ve broken it into three groups according to the qualities of addiction above.
Debt Feels Pleasurable
- Do you have a habit of borrowing items (books, clothes, money, etc.) from friends and family and fail to return what you borrowed?
- Do you often make impulse purchases of things you hadn’t planned on buying because you found a “good deal”?
- When faced with a difficult financial situation, does the prospect of borrowing give you a great sense of relief?
- Do you live with a ceaseless hope that someone will take care of you if you get into serious financial trouble?
Debt Becomes Compulsive
- Do you borrow money without understanding how much that debt will cost in dollars and cents?
- Are you aware of your current account balances, monthly expenses, interest rates, fees, or fines on the debts you currently have?
- Do you find yourself teetering on the financial edge by living paycheck to paycheck, using one credit card to pay another, or writing checks hoping that there will be enough money in your account once the check clears?
- Have you ever developed a plan for paying off your debts only to break it under pressure?
- Do you typically expect a negative response when someone needs to pull your credit report?
Debt Interferes with Your Life
- Do your debts impact how you view yourself?
- Are your debts making your home life unhappy?
- Do you keep your debts hidden from family and friends?
- Does the pressure of your debts distract you from your daily work?
- Does the pressure of your debts cause you to have difficulty sleeping?
- Has the pressure of your debts ever caused you to consider getting drunk or using drugs?
Being at the Crossroads of Addiction
If you answered yes to more than half of these questions, then the chances are good that you may either have an addiction to debt or are on your way to one. Let’s make today the turning point.
We have all arrived at crossroads like these. One road, a deceivingly easy route actually lures you to further despair and ruin. The other, a more challenging road no doubt, leads to a beautiful life filled with self-respect and personal fulfillment.
You have a step to take. I’ll leave you with a few resources in hopes that you take the right one.