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The 3 Lies Society Has Told Us About Debt

“A lie believed as truth will affect you as if it were true.” -Kevin Martineau


Today’s society has sold us a bunch of lies about debt that we have believed. In fact, we’ve believed them so much that most of us are in debt today.

So, how do we quit believing the lies and open our eyes to the truth? We educate ourselves and learn what debt really is and what it is not.

There are 3 lies that culture has told us about debt. Let’s look at them and consider the truth about each one of them together.

Debt Lie #1: Get a Credit Card to Build Your Credit

The idea that you have to get credit to build credit means you need to go into debt so that later on you can go into more debt. This is ridiculous. Of course, the concern of buying a home later on arises. So, can you buy a home without having had a credit card? Lenders will tell you no. But that is not true.

You can qualify for a mortgage from a company that does actual under-writing. In other words, they don’t just look at your credit score, they look at the history of your financial life. You can qualify for these mortgages if you have paid rent on time for at least 2 years, you have a history of paying your utilities/school tuition/etc. on time, you have been in the same career for at least 2 years, and you have a good down payment.

You may feel like that is too hard. But why? Is it because it is impossible to accomplish or is it because someone told us there is an easier way, – a way to do it by getting into debt with credit cards? The fact is that you do not have to build credit to buy a home. A history of good, solid financial stewardship will qualify you for a home when it is your time to buy one.

Debt Lie #2: Everyone Has a Car Loan, It’s Just a Way of Life

Many financial professors and advisors purport this lie. They suggest that we get a car loan because we “need” one. The problem is that there are substantial risks involved when getting into debt. Additionally, we pay more for the car after the lifetime of the loan than what the car is worth. The biggest problem with this is that it takes our biggest wealth building tool from us every month – our income. The fact is that we do not have to get a car loan and pay the bank interest for five years. We can save our money and get what we can afford at the time. That way, we can use our money ever month to build our long-term financial future.

Debt Lie #3: Debt Consolidation Fixes Our Problem with Debt

Debt consolidation is a problem because it hides a bigger problem. From a purely financial standpoint, it may seem like a good idea. The problem is that we are the ones who got us into debt. We are the ones who created the problem. And when we consolidate our debts, we think we did something to fix the problem. We feel accomplished. But in reality, nothing changed.

We still have the debt, and more importantly, we are still ourselves. Debt is a fundamental problem. It encompasses impatience, impulse buying, and poor financial management. To fix our problem, we need to look closer at ourselves than at our debt. Consolidating our loans doesn’t change us, it just transfers out debt from one lender to another. If we are going to see a long-lasting change that will permanently impact our financial future in a positive way, then we will have to address our own tendencies that resulted in the initial incurring of debt in the first place.

Just because everyone does it doesn’t mean we should do it too. The truth is that you do not have to get a credit card to build your credit. Car loans are not a way of life. And you cannot fix your debt problem by consolidating it. By refusing to believe these lies and living in a way that is counter-cultural, financially speaking, you will set yourself up for success and for eventual, complete financial freedom.