Being in debt certainly brings its long term side effects and I have my share too. After almost a year my networth is almost the same. I can neither ignore the fact nor get away with my pathetic financial condition. The debt that I took for getting certain things gave me an initial pleasure of owning and flaunting those things. But this pleasure had side effects too that I now realize. The most primary side effect of being in debt is its effect on your mind. I feel that either our mind forgets how to live debt free or it’s too much pre- occupied with the debt.

The primary focus of the mind with debt over your head is debt! The sleepless nights of the questions (in your mind) like, “How to reduce it?”, “What other methods I can apply to reduce it?”, “Should I take more debt?”, “Balance transfers?”, “Where should I cut down on my expenses?” etc. In this situation you are never prompted to think that how did you get into this mess in the first place! Even if you think it over all you will think is, “Where did my money go?” and when you realize the grim situation you will then think, “I was dumb enough to not to keep records of my spending”.

The excitement of buying things that I now realize is ephemeral but the debt; no its not! and its side effects come along.

Opportunity costs: The cost of the second best possibility of using that money can be huge. If you would have not spread your legs out of your sheets then the amount you are paying today for debt repayment could have been invested to generate returns.The “no returns” that you are getting from the “no investment” done gives pain when you lose a perfect investment opportunity. You tend to blame this on your luck, “My bad luck; I had no money for this opportunity”!

Wastage of time thinking about debt: If you are to receive some amount of money, say your salary or paycheck then you can’t wait for it to come so that you can reduce your debt. You know that you can only do it when the paycheck arrives but you will spend huge time thinking of the day when you will pay a part of it. You will never realize that you cannot overclock your debt reduction process.

Loss of focus from your work: Well, this is my personal experience that at work most of the time I am thinking of how to reduce and how quickly I can clear my debt. This is affecting my performance at my workplace. I have tried to keep my personal life away from my work but futile. “When in debt, your mind goes to eat grass” (A saying in my language).

Security/Insurance threat: I follow extreme frugality i.e. no emergency account no excess cash in my wallet all those of which goes for the debt repayment. So the next side effect is no security no insurance nothing just plain paycheck to paycheck life. Although it’s a personal choice how and when you want your debt to get over. I chose to live in extreme frugality.

Lack of efficient financial planning: With limited resources at your disposal you cannot plan your way out for your financial goals e.g. my tax planning though it’s not a goal but a means to a goal which is obscured by my debt situation. I have not yet planned my taxes! I feel that it will take a huge chunk out of my pay this year. This again is a side effect, being not be able to plan your finances properly.

I have accepted the truth too; you cannot avoid the side effects of debt, unless you have removed it completely.

To get to the root of these side effects I would blame my indecisions which I never realized that created such long term ill effects. The occasional commodity purchases (mainly electronic goods and some bad habits eating out) cost me huge in terms of monetary downfall and a different kind of depression or psychological pressure.

One solution could be to increase my income to get out of such a situation as early as possible but reducing debt is one thing and enhancing your income is other, with a variable hour job I am not sure I shall be able to able to find new/alternative source of income to cope up with this.

I think the occasional materialistic things that I went for was not worth of the mental agony and sleepless nights that I am going through. I don’t even know when I shall be getting out of it. This post is written out of desperation to get out as fast as I can but I know the end result. But it sure gives me an attitude shift. I hope I would soon get out of it.

image credit: www.pixelperfectdigital.com

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