I love what the founder of the wisdom center Dr. Mike Murdock says about debt, he says that "Bad debt is a sign of lack of financial wisdom." If we don't know what to do with our money, we tend to spend it on something that will lose values in times. Robert Kiyosaki calls the things that will lose value "Doo Dads" Doo Dads can be a luxury car, a boat, jewelry, expensive clothes and so on.



Most people are never taught financial knowledge by their family or when they are in school. So as soon as they get out of school, they go crazy, because a lot of banks are offering them credit cards as soon as they finish their college education. They start buying things now and pay later. What they don't realize is that credit cards' interest is very high! It can be 18 to 29%. If you make late payment and go off allowed limit, the penalty period interest rate is extremely high!

It will take 20 years to pay off $1000 credit card debt if you only make the minimum payment every month. So be careful and watch out before you decide to buy something. Be careful of the words "Easy low monthly payment." They are very deceiving. When you get into debt, you will have to pay the interest if you cant make the payment in full.

Why the problem is getting worse? Most people rather spend their money on watching movies, eating out and buying clothes rather than buying books, tapes and videos that will teach them financial knowledge. They are not concern about their financial well being. Remember this, What you dont respect, it will flee away from you. If you dont respect your financial life, you will find yourself deep down in poverty. Financial blessing will flee away from you if you dont respect it.

Most people who are deeply in debt do not want anybody to know that they are in debt. They are scared when their friends tell them that they have been spending too much. They get offended when someone tells them to get help or to buy books, tapes or go to a financial seminar that can give them financial knowledge and information, so they can learn to dig themselves out of their debt. They never consult and discuss their financial problem with a qualified financial planner or mentor.

What do I do now? Well delay of gratification is one of the solutions; dont buy it if you dont have the money to buy it! Wait, wait, and wait! I know it is very hard to fight on your emotion. You want the things you want today instead of tomorrow, but discipline yourself when it comes to buying.

It doesnt make any sense to buy a coffee table that cost $200 on credit and in 1 year you have to pay the bank $800 for the coffee table because of the interest that comes from the credit card. You cant even sell the table for $200 anymore! Be smart; use your mind before you buy, not your emotion, because our emotion can deceive us. Think, think and think, before you purchase something. Pay it cash if you really want it. Dont trade your future for todays gratification.

Get financial education! Get it now and dont delay it. You can always earn your money back, but you will never be able to earn your time back. The longer you delay the process of learning, the deeper you will get into debt and financial trouble. One of best financial education tool that is available today is Choose to Be Rich Series by Robert Kiyosaki. There 12 tapes or CDs and one video that talk about how to become financially literate.

It cost $150 to $200, but its well worth it. If some people are willing to pay $20,000/year to go to college, why cant they spend $200 on financial knowledge that will teach them to be smart financially for life! Dont be stingy to yourself when it comes improving your knowledge and education. If your gas tank for your car is worth $60 to refill it, your brain is worth more than $60.

Run a financial statement! You must know how deeply in debt you are! I love the depth indicator in every swimming pool. It tells me how deep the pool is, so I know what to expect. If youre not a good swimmer, youd better stay in the pool that is not too deep, but as you become a better swimmer, you will be able to move to a deeper pool level.

Many people drown because they dont pay attention on the depth indicator in a swimming pool. It can be very fatal when someone doesnt know how deep the pool is. The same thing can happen if you dont know how deeply in debt you are.

You must know how deep your debt is! I am surprised that most people I talk to never look at their bank and credit card statements and they are not sure how much money they owed to the bank! When I ask them, how much do you owe the bank, they told me that they are not sure, or they are too scared to see their financial statement, but they are making their monthly payment and they dont even know the interest rate of their credit card!

Write it on a piece of paper, get the total balance you owed, so you know how to set a goal in paying off your debt. Remember this; you cant hit a target that doesnt exist! You must write it down on a piece of paper, or even a computer software programs like Microsoft Money or Quicken that will help you to keep track all of your expenses.

One thing that I found very useful is having a PDA (personal digital assistant) or Pocket PC to keep in track your expenses. A PDA or Pocket PC can help you balance your bank accounts, credit card accounts and manage your expenses.

Look everybody makes mistakes, its human but we cant make the same mistakes over and over again! We have to learn from our mistakes and learn from them. The difference between the have and the have not is the amount of proper applied information that they have.