Tuesday, August 13, 2013

Success and Debt in America

Successful People and the Debt Quagmire

by Frances Rahaim, Ph.D.
aka "The Money Doctor"

So there I was, watching “Children of a Lesser God” in which Marlee Matlin plays a high IQ graduate of a small New England school for the deaf who has stayed on rather than venture into a hearing society. I was given chills by the line, "Only stupid people think deaf people are stupid.”

I immediately recalled a sentiment I sometimes receive when I mention that I help people get out of debt. “How do people get themselves into all that debt?” The mistaken assumption here is twofold.

First, that it is credit card debt. We’ve been conditioned not to think of mortgages, student loans, business loans, auto, and other installment payments as debt but to simply accept them as a way of life. Oddly enough, Americans carry a higher burden in dollars of this type of debt than they do credit card debt by far.

Second, that bright, disciplined, credit-savvy individuals would not have amassed any debt.

In my experience, this could not be further from the truth.

It might surprise some to know that a typical PowerDownDebt client, if there is such a thing, is not only educated, but also may be quite disciplined in many areas of life, including their health regimens, child rearing and business.

In fact, therapists, teachers, students and small business people top our client list. Perhaps this is because successful people are busy with the details of their vocations or professions and the minutia of general finance takes a backseat to the busyness of raising families and performing our daily duties. Maybe it's due to unpredictable or sporadic incomes, which can cause budgeting issues. Shortcomings in education from our parents or our educational system may also be to blame.

Rarely do I meet someone who tells me he or she received sound financial or debt counseling regarding repaying student loans, starting a practice or running a business during the educational phase leading up to these events.

I often ask clients, successful in their careers, how they have amassed debt and why they think we see so many professionals.

Over the years I have heard many reasons why debt piled up, but most point a finger toward easy credit, the necessity for student loans and the expense of raising a family or running a business.

In answer to my second question as to why so many professionals seek help, one eloquent answer stands out in my mind.

A 27-year-old Harvard graduate named Erin sat before me with a master’s degree in psychology, more than $80,000 in student loans and a $30,000 job as a social worker, and quickly said, “I think it's our ability to ask for help and accept it.”

She went on to explain that teachers and counselors spend their days helping people. Furthermore, while they may be experts in their particular fields, they understand the value of hiring a professional.

So the next time you hear someone judging someone else because they’re in debt, remind them that in America, success often requires taking on debt. It's how you manage it afterward that counts.

For more information about managing debt - even future debt - without harming your credit, visit http://www.powerdowndebt.com

Please email questions or comments to: info@powerdowndebt.com or call 413-774-5555.