Title: 
Credit Counseling:  A Path to Financial Freedom

Word Count:
816

Summary:
The article deals with the issue of consumer debt and how it contributes to stress and anxiety.  Many people have run into debt due to overspending, financial 	illiteracy, and even because of deep, emotional and psychological problems that manifest as social insecurity or status anxiety.  Discussion about the link of emotional distress caused by financial woes lead to physical illness. The article also briefly cites some reasons why many people incur enormous amounts of debt and the value of getting credit counseling as a financial education and debt reduction strategy.


Keywords:
depression, self-destruction, stress and anxiety, status anxiety, counseling


Article Body:
Living from paycheck to paycheck... getting a loan to pay off another loan... filing of bankruptcy --- these are situations faced by thousands if not millions of Americans who have somehow buried themselves in debt.   No wonder, many people are increasingly being diagnosed with depression.  The sordid financial trouble people face leads them to more negative thoughts of hopelessness, insecurity, and desperation.
Four years ago, the U.S. Federal Reserve reported that consumer debt had already hit $1.98 trillion.  The figure was the aggregate amount of debt from credit card and car loans alone. The total debt for mortgages was not included in the said figure. The American Bankruptcy Institute also came up with a report which indicated that 1.6 million Americans filed for bankruptcy in 2003.  Credit card debt figures for 2005 was reported to have reached $753 billion in debt for the United States alone. Based on recent estimates, the average American household has $18,700 in debt.  
But why do many people fall into debt?
One major reason for indebtedness is uncontrolled spending.  The lack of control over spending habits starts a cycle of spending more money than what one makes; and the compulsion to apply for a loan to acquire more things.  In some cases, the loans are made just to repay other previous loans.  In terms of credit card abuse, a person falls into debt not only because the list of payables grows long. A person falls deeper into debt because of the interest.  It is not surprising to hear of people who have been in credit card debt for such a long time.  After excessive use of the credit card and no increase in their capacity to pay, they are left to face the reality that they are only able to pay-off the interest without decreasing the principal amount of debt.  Aside from the interest, not paying a debt on time also spells trouble for the undisciplined card holder since late payments entail a “late payment penalty.”  Late payment charges can  can range anywhere from ten dollars to forty dollars. Using the credit card over one's credit limit will also entail an over-the-limit fee which usually starts at $39 per transaction. 
The next logical question is, “Why do people overspend?”   Many people seem to have lost control over their finances because of status anxiety,  an emotional and psychological problem that makes a person feel insecure about his or her sense of personal worth and significance.  It can also be a compulsion to become or appear to be popular, wealthy, and “above everybody else.”   Many call this, in layman's terms, trying to “keep up with the Joneses.”  
If a neighbor passes by sporting a brand new car, a socially insecure person would might feel the need to  rush to the bank to get a car loan since he can no longer “afford” to be seen driving a 2001 Nissan sedan even if he really cannot afford to pay for a 2007 Mercedez Benz SLK Class that comes at $43, 500 plus loan interest.  Seeing an officemate brandishing the 4-gigabyte i-Phone worth $499 instantly creates a need to buy the 8-gigabyte model worth $599.  
This desire to be seen as good or even better than one's neighbors in terms or social standing, material possessions, and influence is a cause of anxiety for many people. Financial woes have also increased the level of stress and anxiety among individuals who have uncontrolled spending habits and social insecurity.  The emotional and psychological problems brought about by financial difficulties are also causes of physical illness that include migraine headaches, depressive behavior, heart ailments, to name a few.  
So, how can people stop themselves from committing financial self-destruction?  One easy step is to inquire from the credit card company if they offer free consumer debt counseling. This form of counseling focuses on helping consumers learn the wise uses of credit and various strategies for debt payment and reduction.  The usual advice starts with the theme of “not spending more than what you earn.”  This advice is usually followed by convincing the person in debt to list and determine what accounts should be settled first.  Almost as a given, many credit counselors also try to convince people to start on a savings plan.  Professional debt counseling services also include the more technical process of computing taxes, interest rates, and payment timelines that should be followed by an over-spender who really want to regain financial freedom. 
Frivolous spending may actually be more than just a case of financial illiteracy or lack of discipline in money matters. In some cases, people with enormous debt must also consult a psychologist or psychiatrist to determine the root causes of overspending. 
Living from paycheck to paycheck...paying one loan after another is surely not the way to live.  There is a way to financial freedom, and everyone must start by making a financial choice of using money for what one merely wants or for what one really needs.


