Taking a minute to reflect on how our financial system works; particularly in terms of wealth transfer, might help you find ways to keep more of what you've acquired.
The American labor market has been dominated by a new feudal business structure over the past century. While most people no longer live under the protection of a feudal lord, or king as in the Middle Ages, they do live in a state of servitude similar to that of the peasants who worked the fields in exchange for protection.
Economic bondage refers to a person's enslavement to the financial systems and institutions that control our existence.
Even though we don't want to think about ourselves in these terms, it is undoubtedly true that many of us are enslaved by the poverty that hangs about our throats.
Consumers who believe their purchases will offer long-term happiness end up with excessive debts and financial responsibilities, resulting in economic bonding.
As a result of these decisions, a larger portion of a consumer's monthly income is diverted to loan repayments and other non-essentials, rather than necessities.
“Economic bondage results from consumers incurring excessive debts and financial obligations based on believing consumer purchases will bring long-term satisfaction. Such choices lead to a greater percentage of the consumer’s monthly income going to interest payments and things they want rather than priorities.” - Moneyfit.org
In simple terms - we are trained to impulse buy, and to consume in a way that leads us to debt. We think that ‘things’ will bring us the happiness we’re looking for. Except - for many of us, we can never catch up, and thus become ‘enslaved’ to the financial institutions we owe money to.
Working forty to eighty hours a week and just having a little amount of money in your pocket after paying your bills and monthly obligations is stressful. This is the ‘paycheck to paycheck’ mentality.
Working might seem futile at times, since you never seem to move forward. You have the impression that you only work to pay expenses or pay off debt, never to get the consumer things you desire.
Even if you work ridiculous amounts of overtime, you may still be unable to achieve your goals.
At the same time, Americans are becoming increasingly emotionally, intellectually, and physically exhausted as they strive to pay off their debt and pay their expenses.
Too many people feel stuck, unable to break free from their economic enslavement. They are unable to satisfy their fundamental needs because they have committed to leading a more consumer-driven life.
After all, everyone requires accommodation; a vehicle and a phone appear to be necessities; and you must pay an ever-increasing cost for health insurance.
This causes you to be concerned about whether you are covered by your insurance every time you get sick or need to see a professional.
All this, however, implies that anyone trapped in the big wheel of spending will accumulate ever-increasing debt. They may even feel helpless as they witness a higher percentage of their hard-earned income go toward paying interest on credit cards and loans.
A person who feels economically imprisoned may believe that life is worthless and that the world is robbing them of their cash and effort.
People who base their self-worth on their belongings may feel dismal and impotent if their efforts at work yield no maximum benefit, particularly if they believe their efforts are rewarded solely with additional debt and expenses.
For such customers, their ego is just like a bank account. They feel as if others next to them and the rest of the world are continuously withdrawing money from them, making them feel as if they have nothing.
The more individuals and the world make emotional, economic, and mental deposits or investments in them, the more they believe there's something to give.
It's really about striking a balance.
The world appears to be making withdrawals at all times. The challenge is to figure out how to keep something like that in your psychological and emotional account so you don't feel financially trapped and lifeless.
So, how can you break free from your economic enslavement? This question necessitates a tremendous lot of self-control.
You may see individuals sharing photographs of themselves living in luxury every day if you turn on your phone.
We're continuously assaulted with images of people posing on the balconies of million-dollar apartments. Their attractive faces, expansive landscapes, and sea vistas suggest we all want the same.
Appearing to have everything, they'll offer lessons to their followers on how they, too, may enjoy life as they do.
These social media celebrities advise their followers on how to break free from economic enslavement through hard effort and the chase of more money.
Many consumers are unaware, however, that these people are frequently "social influencers." They're paid to sell their interpretations of the ideal life for followers to purchase their goods. Of course, this plunges the customer further into debt.
The good life is never discovered in a never-ending quest for more stuff. Rather, a happy life may be found in the financial security and stability that comes with debt repayment and saving.
It's difficult to save money when exploring and purchasing things feels so freeing and enjoyable.
Who doesn't want to be able to buy anything they want, whenever they want, without feeling guilty?
Regrettably, such behaviors rapidly lead to you living above your means, as you have now lowered your future wages by taking on extra debt.
You become more economically trapped with each impulsive purchase, with each thing purchased for a short moment of enjoyment.
Despite the difficulties, you may break free from these financial shackles by using the techniques listed below, which take patience and dedication.
It’s going to take some discipline from you to get back on track. No, it’s not easy. But you can do it.
To begin, you must decide to limit your monthly expenditure by just purchasing basics and allocating the majority of your money toward debt repayment.
Second, create an operating cash sheet to keep track of:
Staying "money conscious," means you’re being mindful of how you spend your money and how your buys and repayments affect your financial plan.
This does not need to be complicated. Use an old notebook or a simple spreadsheet to track everything.
Becoming financially responsible and powerful means you must learn to view money as a tool. It's there for increasing potential income while maintaining financial security.
You will likely always have some debt. However, you may drastically minimize how much by altering your attitude toward money and spending patterns.
Finally, establishing an emergency fund might help you avoid using credit cards in the event of an unexpected disaster.
An emergency fund is defined as a savings account with two to five months' worth of earnings. Paying yourself first is one way to accomplish this. It entails placing 20% of your income into a savings account every pay period.
Generate a checklist of your "needs" and "wants." This helps you understand what needs to be paid monthly or annually. On top of that, you can track any "wants" you can save for in the future.
This could prolong your need for immediate satisfaction, but you'll be even more satisfied in the long term. You'll realize that such an act of delayed satisfaction leads to more money in the bank each month.
Sticking to your plan will lead you to success and you'll start to enjoy financial health!
Editor's note: This article was originally published Sep 17, 2021 and has been updated to improve reader experience.
Photo by Jezael Melgoza on Unsplash
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