The biggest mistake people make when they are deep in debt is to procrastinate. It’s the “deer in the headlights” syndrome, and credit counselors and bankruptcy attorneys see it all the time. It’s painfully obvious to everyone except the person in debt that they need to make a hard choice or they won’t have many choices left.
Avoid Magical Thinking
The other response is what financial expert Steve Rhode of GetOutofDebt.org calls “magical thinking.” Americans by and large are an optimistic lot. We buy lottery tickets and spend tomorrow’s income today, and well before the ship comes in. At the same time, that can be a costly mistake when it comes to getting out of debt.
The Hazards of False Optimism
As Elizabeth Warren says in her enlightening book, The Two Income Trap: “The greatest danger for a family in financial distress is not bill collectors (although they can be the most annoying). The greatest danger is false optimism. We heard it over and over again in our interviews (for their study of bankruptcy): “We thought Mark would be back at work right away … We didn’t think Grandpa could go on like this much longer.” These families knew they had been hit by a disaster but they didn’t respond fast enough because they thought it would pass quickly.”
Get Strategies on Getting Out of Debt
Don’t let debt scare you into doing nothing. Act now to get the help you need so you can focus your time and energy on creating a positive financial future. If you would like to learn more about the options available to you, please refer to my book The ABCs of Getting Out of Debt.