Sunday, August 9, 2015

Behavior Changes are 80% of the Debt Reduction Equation

I finally passed my remedial math class in debt reduction yesterday.  There were some important lessons about debt in the daily lesson plans.  0% interest really isn't free.  And not much math is needed to pass the course.  An understanding of behavioral science is helpful.  Imagine a lab rat who keeps pressing the button to get food even though the dispenser is empty.  The rat does this because it's trapped in a pattern of behavior that's killing him.  The evil scientist tricked the rat into believing he could only eat when he pushed the button (used his credit card).  The rat never noticed the cage door was always unlocked and he could leave anytime to find his own food.

The only math you need to master is this:  The stuff in pile A (that's the money you earn) must always be larger than the stuff in pile B (that's what you spend every month). The credit card marketers want you to believe pile A doesn't really matter.  Charging is their new math.  It makes pile B more fun.  Pile B is addicting.  You will turn into a lab rat who would rather wait for the evil scientist to feed you another credit card offer than get out of the cage and find your own cheese.  C is for cheese.  It's what's left over after you subtract pile B from pile A.  If you want more cheese, all you have to do is make sure pile B is always smaller than pile A.  There's an abundance of cheese outside the cage.  That's my reward for passing remedial math.  If you can change your behavior, you can change your life.  Have a great day.

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