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Running head: GAZELLE INTENSE: DEALING WITH DEBT

Gazelle Intense: Dealing with Debt Lee Reed Western Governors University C455: English Composition I Michael Palmer November 16, 2019

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Gazelle Intense: Dealing with Debt TASK 3 Topic: Why Debt accumulation is a big problem in the US There’s a verse in the Bible that cuts right to the problem. Proverbs 22:7 says “The rich rules over the poor, and the borrower is the slave of the lender.” The financial life of many Americans is bound up by thousands of dollars in debt. This money is owed on credit cards, student loans, cars, and mortgages, for a start. When people are equipped with the appropriate knowledge, and more importantly the appropriate will, a drastic change in fortunes is possible. Debt accumulation is a big problem in the US, which could be mitigated by ensuring citizens are educated on personal finance, building assets in favor of liabilities, and resisting an eager consumer market. There is no national standard for how to educate Americans on how the handle however many or few dollars they’ll earn over a lifetime. Yet, personal finance touches nearly every facet of our lives. Forbes previously reported that only 17 states in the USA require high school students to take a course in personal finance (Frazier, L. 2019, July 30). Although only 34% of states furnish students with some foundation in personal finance, 63% of adults believe it should be taught in school (Paris Ward LinkedIn Bio, & Ward, P. 2019, August 20).

A sound financial education that avoids a legacy of debt through education includes these findings from Frazier, L. (2019, August 30).:   

Promotes good savings habits. Just imagine if your child came out of college and started immediately saving for their future. Imagine if we all had. Budgeting teaches awareness and responsibility. If someone has a budget that they actively manage, it forces them to look at their spending. They are aware of how much they have available, and this leads to making better spending decisions. Smart financial decisions positively affect one’s credit score which impacts their entire life: getting a job, applying for a credit card, renting an apartment, buying a home or car, getting insurance, even signing up for their power bill. Having an

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excellent credit score means saving thousands and thousands of dollars in interest payments over their lifetime. More jobs, more money, and less debt are good for the economy as a whole. Understanding money management leads to financial health and positive attitudes around money. People’s attitudes around money can be instrumental in shaping their character, plus promotes the desire to give back.

For most adults, the primary driver of their ability to build wealth is their income. When lifestyle can be managed such that income exceeds expenses, a positive net worth is achievable. While some people use debt to achieve financial goals, it is a better practice to save and pay cash for purchases and investments. Repeated over time, this behavior accumulates possessions and investments that are assets, rather than liabilities. This creates an ownership position with a positive impact on net worth. At the end of a person’s life, assets can pass down to heirs. This is a stark difference to leaving an estate mired in debt, with creditors grasping to be repaid with whatever dollars remain. The best approach is to focus on accumulating assets, rather than stuff. Debt should be avoided in the first place. For those in debt, paying it off should be a primary objective, which allows funds to be used to build interest, rather than paying interest on liabilities. In the Bible, Proverbs 6:1–7 says, "If you've signed surety, my son, do this. Give no sleep to your eyelids, no slumber to your eyes, and deliver yourself like a gazelle from the hand of the hunter, a bird from the hand of the fowler." Many a Discovery channel nature special has show the gazelles pretty intensely focused on escaping the cheetahs hunting them. Using that gazelle intensity to escape debt is possible, with some behavior changes.

Every day, marketers are tirelessly toiling to create a compelling message to part consumers from their dollars. The average person sees an average of 5,000 ads per day (HolmesInfluencerFollowCEO, R. (n.d.). The smartest advice to combat this flood is to practice

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contentment. Contentment is a state of being satisfied and happy in present circumstances. In many cases, the presently owned smartphone, clothes or car are sufficient to fulfill their intended purpose. However, there is always a bigger, better, newer option available for purchase, if we succumb to the advertisers’ compelling messages. Resisting the marketplace’s continual calls to spend is a productive first step to dealing with debt. Financial writer Rachel Cruze believes that contentment can create wealth. Cruze, who is the daughter of financial guru Dave Ramsey, writes that “Content people are able to make lifestyle sacrifices in order to get out of debt. When payments eat up your income, it’s hard to use that money to give and save.” (Cruze, R. 2018, December 1.) Practicing the discipline to save and pay cash, or deciding not to spend at all, are methods to effectively resist a thirsty consumer market.

Debt accumulation is a problem in the USA. The good news is that solution lies within the power of the individual. Different choices and actions can yield better results. Dave Ramsey is famous for saying “personal finance is 80 percent behavior and 20 percent head knowledge.” Many times the debt problem is less a problem of income and more of an issue with outgo. With an education on how personal finance impacts everyday life, the focus can pivot to building a positive financial picture instead of a pile of bills. Resisting the call of the ad will leave more dollars in the wallet that can be told where to go, rather than wondering where they went.

References

GAZELLE INTENSE: DEALING WITH DEBT Frazier, L. (2019, July 30). New Jersey Requires Financial Literacy Courses In Middle Schools, Why More States Should Do The Same. Retrieved November 6, 2019, from https://www.forbes.com/sites/lizfrazierpeck/2019/01/08/new-jersey-requires-financial-literacycourses-in-middle-schools-why-more-states-should-do-the-same/#5523cb0b3ea6.

Frazier, L. (2019, August 30). 5 Reasons Personal Finance Should Be Taught In School. Retrieved from https://www.forbes.com/sites/lizfrazierpeck/2019/08/29/5-reasons-personalfinance-should-be-taught-in-school/#454fdd205178. Paris Ward LinkedIn Bio, & Ward, P. (2019, August 20). 63% of Americans Say Schools Need Financial Education. Retrieved from https://www.creditkarma.com/insights/i/personal-financein-schools-survey/. HolmesInfluencerFollowCEO, R. (n.d.). We Now See 5,000 Ads A Day ... And It's Getting Worse. Retrieved November 6, 2019, from https://www.linkedin.com/pulse/have-we-reachedpeak-ad-social-media-ryan-holmes/. Cruze, R. (2018, December 1). How Contentment Can Make You Rich. Retrieved from https://www.daveramsey.com/blog/how-contentment-can-make-you-rich.

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