12/04/2014 04:42 pm ET Updated Dec 06, 2017

Kick the 10 Bad Habits of the Chronically Indebted

Is your home underwater? Do you owe more on your credit cards than you earn each month? Is your tax bill more than 1/3 of your income? Do you have every insurance policy that the salesman offers? Have you been telling yourself that you'll save/invest money someday after you pay off debt? Do you deny yourself even small treats to try and balance your unsustainable budget, which is often supplemented from a credit card or by siphoning off home equity?

Did you know that all of these are signs of being chronically indebted?

10 Habits of the Chronically Indebted

1. You'll start saving once you pay off debt.

If your first consideration is always paying down debt, before protecting your money and compounding your gains, then you have placed the debt collector as the first priority in your life. If you think this adds up, then you are not factoring in the power of compounding gains, paying less in taxes and adopting a more sustainable budget. None of the people you owe money to are going to take up a collection to help you if you lose your job or get sick. Providing for your own future is always your first priority. 

2. You Think of Wall Street as a Casino.

If you think that gold is safer than stocks, then you need to think again. Over a 30-year period, gold is one of the worst investments. Those who invested in gold at the high in 1980 had to wait a quarter of a century for the value of their investment to come back to even. In fact, over the long-term, investing in great companies that make the products we love offers the best return.


3. You buy high and sell low.

When an investment loses value, your first thought is to sell it. When a sector is hot, you want to join the party at any cost, even if it might be just before the cops arrive. This is a chronic case of investing with stomach acid, rather than wisdom.

4. You blame others for losing your money.

Rather than taking ownership and responsibility for what you invest in and for your budget, you blame others for convincing you to invest in something and losing your money. In fact, if you're truly honest with yourself, part of the reason that you give your power to others is so that you can blame them if things go wrong. This is easier than investing the time to get smart and take charge.

5. You Hide Your Problems.

Far too many people hide their problems until it is too late to get help. Why? Because it is embarrassing to admit that we are failing at life math. After high school or college, many American teens are tossed out on their own to fend for themselves, even though today's cost of living is truly unaffordable on a starter salary. While you might think this toughens kids up because that's what happened to you, in fact, they are simply expected to ace an exam when they've never been properly trained in the formulas. Financial literacy isn't taught at school. Royals and billionaires learn it at home, and so should you.

6. Everything Will Be Great When I Get a Raise.

Most people think that more money is the solution to all of their problems. In truth, what's really needed is a better budget, creative thinking on how to achieve that and financial literacy on how to pay less in taxes, on utilities, on housing, food, transportation and the other big expenses of living. If Mitt Romney can pay only 14% in taxes, so can you. If electrical engineers can pay 10% of what you spend on electricity, so can you. If riding a bike could put an extra $3000 in your wallet each year in gasoline savings, you should consider it. If Asian Americans could be almost enslaved in America a century ago and become the top income earners today, so can you.  

7. Launching a Business on a Credit Card.

Sadly, there is an entrepreneurial myth out there that it's okay to launch a business on your credit card. This easy money is, by far, the most expensive source of capital you can tap. Entrepreneurs who use credit cards to launch or expand their business end up paying usury rates - often for years after the business goes belly-up!

8. You Use Your Home as an ATM Machine.

This is less likely to happen in today's world than before the real estate bust in 2006. However, even today, homeowners who are able to are tempted to make ends meet by pulling equity out of their home. In most cases, this is a terrible idea. There are other options, such as downsizing and potentially renting out your home for additional income, that could actually increase your net worth and afford you a much richer life.

9. Emotions Are Jerked Around By Headlines.

Is the news on 24/7 in your home? Do you yell at the TV, at politicians and feel at the mercy of a world that is outside your control? Does your mood start to sour at the end of each month when you run out of money, or whenever the stock market falls?

10. You Try to Keep Up With the Joneses.
Sadly, what shopaholics (and alcoholics) never realize is that it is no fun to be enslaved by a vice. It's not even a lot of fun in the moment. And it certainly crashes the next day when you realize that you're going to be paying for your spree for years to come...

If you're in debt, it's time to get a new plan.

The Gratitude Game: 21 Days to a Healthier, Wealthier, More Beautiful You offers a step-by-step program to make prosperity and abundance your daily habit by teaching you how to embody and employ the same strategies used by billionaires and royals. If you're ready to swap out debt consciousness for wealth consciousness, this is a great stocking stuffer to get for yourself this holiday season.

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