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How to go deeper into debt

2010 October 19
by Aaron

aaronPlease don’t let the title take you aback. While I don’t need to be informing folks about how they can get deeper in debt, it’s good to take note of  certain warning signs. They may sound obvious and stupid, but many of the following are things I first did which got me buried under a mountain of debt. Hopefully, the post will help others going down a similar path avoid the same mistakes I made.

  1. Take out cash advances to pay for rent. One of the stupidest things I did while I was building my mountain was to take out cash advances. A cash is advance is basically a quick loan with high interest – usually off a credit card. It’s dumb.  And, it’s a sure sign that you are in serious financial trouble.
  2. Stay unemployed. There are thousands of people currently unemployed and seriously looking for work. Many will take any job that can. Still, others – even at their most desperate moment  – will not accept a job which is “below” them or in their line of work. Even though it was a jolt to my pride, I ended up taking a job below my education and pay level because I needed to pay bills.
  3. Don’t seek financial advice. If you seem to be making the same financial mistakes and never seem to be getting ahead, you may need to seek counsel. After months of assuming debt, I finally had enough and sought out advice and help. Getting help is usually a sign you have “woken” up.
  4. Don’t pay your bills. Another sign you have serious problems is when you just stop paying on your mortgage and other bills. Keep it up and you’ll be on a path to bankruptcy.
  5. Buy more than you need and spend more than you make. A number one symptom of those in debt. Best to create a budget and stick to it.
  6. Don’t save. When things break down and life happens, an emergency fund can be there to bail you out. Without it, you’ll risk having enough money to pay the bills.

Here’s to avoiding these pitfalls and to gaining financial independence.

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Helped start Three Thrifty Guys with his friends Charlie and Mark after being inspired by how they lived their lives “on the thrift”. A designer by day, Aaron was once $40k in debt. After 5 years – he dug himself out and lives to tell about it. Aaron also blogs at the StarTribune

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4 Responses
  1. October 20, 2010

    Great post! While it does seem obvious now that you are not in that situation, at the time it probably felt “normal” to do some of those things. Personal finance is all about learning as we go and since it changes everyday it makes it challenging. Thanks for a great reminder of all the things we shouldn’t do!

    • Aaron permalink
      October 22, 2010

      Agreed Jenny! This is a process! ;)

  2. November 13, 2010

    The most depressing thing for me is people taking out those ‘cash call’ loans on future paychecks….the interest is staggering!

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