Recently, Yahoo contributor S.L. Carroll wrote an article detailing how she incurred the enormous amount of debt early in her life, and in retrospect seems regretful of her decisions. For two of the categories - student loans and medical bills - most can sympathize with. Rising tuition has been a severe concern in the past few years, and the medical insurance has been a topic of heated political debate. But the other category - credit cards - is less likely to draw sympathy. Although Carroll admits that she "never should have applied for a credit card much less six of them," her reasoning for the prior behavior was what "the free money was addicting."
Debt is not free money. It is a liability, an obligation of reimbursement. Applying for credit cards wasn't the problem. Taking on debt gives access to more assets, which could be a beneficial short-term decision for an individual or a firm, particularly when new ventures are sought or begun. But it also adds onto liabilities, and requires the responsibility to recognize that obligation, at the bare minimum. Debt is not free money. Recognize the obligation to get the reimbursement under control, or one is stuck under a heap of burden. For a corporation, it could mean the difference between survival and bankruptcy. For an individual, it could mean the difference between proactive financial planning and reactive financial recovery.
It is difficult to grasp that concept when the current government debt is over $15 trillion, or over $48K per person, in the United States. But fiscal responsibility can begin at the individual level. Better yet, fiscal responsibility needs to begin at the individual level, where one can and does control his or her own destiny. In this case, it's not about reaching bipartisan agreements or arguing over political values. Instead, it's crystal clear as recognizing that debt is not free cash; taking on loans means incurring the responsibility and obligation to repay the amount.
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