What Zombies Can Teach You About Debt
I watch The Walking Dead. I’m not a huge TV watcher, generally, but there are a few shows I always stay caught up on and The Walking Dead (TWD) is one of them. When I was watching this past episode, I had this random thought pop into my head: zombies are a lot like debt.
If you watch TWD (or if you just generally know anything about “zombie lore”), you can easily learn a few common themes regarding zombies:
They multiply. Given enough time and enough victims, zombies will eventually consume their environment;
They’re relentless. Zombies just keep moving forward, shambling toward their victim(s) who they hope to consume, per point 1 (and it seems like, in most cases, they eventually catch everyone.) You can stop them, but it takes special, concerted effort. Otherwise, they just keep coming and coming;
They’re sneaky. I can’t count how many times in TWD that a character from the show has just been sort of going along and doing their thing and then, suddenly, a zombie has appeared from seemingly out of nowhere and started a situation. Did the character not notice the zombie in the first place? Did they notice the zombie but thought they had things under control? It’s unclear. But what IS clear is that a zombie problem can sprout up out of nowhere and cause havoc;
They change you. I don’t mean when you get bitten by one (though that’s true, too.) I mean they change who you are. The presence of zombies make you edgy. They make you nervous. They might make you paranoid. They definitely change your mood. Most certainly, the person you were before a zombie apocalypse is different from who you would be after one.
So how does all of this remind me of debt? Well, let’s go point by point:
1. Debt is something that is not wise to be left unchecked.
Debt grows (especially if you are an active participant in creating that growth); and thanks to compounding interest, debt can grow fast, too. If you allow it to happen, debt can completely consume your financial life. I’ve counseled some folks whose monthly credit card payments are actually higher than their house payment (hellloooooooooo, bankruptcy!)
Let’s look at some numbers as an example. Let’s say you have $5000 of credit card debt (the national average, by the way, is around $15,000(!)) at 20% APR (which might even be a bit low, depending on the credit card you have.) And then let’s say you are making $100 payments each month toward the balance (which at 2% of your balance is probably pretty close to what your starting minimum payment would be.) Here’s what it looks like if you do that for five years:
So, after five years’ time, of the $6000 worth of payments you’ve made, over $4000 of it went to just to interest and you’ve paid down less than $2000 of your principle. OUCH.
2. Debt doesn’t go away on its own.
You can’t outrun it. It’s something that needs to be dealt with, preferably sooner rather than later. If you’re ignoring your debt, it most certainly is not ignoring you.
It will continue to shamble after you, following you on your credit report or from collection company to collection company. And even if you AREN’T ignoring it, it’s chasing after you, all the same. Take another look at that chart above and see if think your debt isn’t following you; shambling, shambling…
3. Accumulating debt can be REALLY sneaky.
It’s just way, way too easy to swipe a credit card when you’re paying for something. It’s way, way too easy to just make your minimum payment each month without thinking about the impact on the long-term picture. Go ahead, look at that chart up there again. Did you realize that your debt is getting paid off that slowly (and that’s assuming that you are only paying the debt down and not actually charging more debt up as you go)?
Do you know how long it would take you to finally pay off that debt if you maintained that same repayment plan going forward? Eight years and seven months, costing you over $5300 in interest, alone. If you want a real horror story experience, think about what it might be like if your debt was that $15,000 national average and you were still swiping/using your card every month (here’s the setup and the punchline: if you’re charging $50 every month on your card while paying a $300 minimum payment, on a card with $15,000 on it at 20% APR, it would take you 20 years and 8 months to pay it off and it will have cost you over $47,000 in interest. $47,000. Read that once more: $47,000. Did you ever think in your wildest imagination that your $15,000 would ultimately cost you over $62,000 to pay back? Sneaky, sneaky, sneaky (and just as deadly as a zombie when it actually catches up to you.))
4. Debt changes you.
It changes your life. Anyone who has ever dealt with an onslaught of collection calls know that it can change your emotional state, it can change your demeanor, it can change your general comfort level, and more. The term “debt load” is appropriate, because debt can feel like a very heavy load that is being carried (which is partially why some folks try to just ignore it.) The person someone is when their life is being consumed by debt is usually starkly different from who they are when they have minimal debt or are debt free.
So what does all this mean? Beyond just making a pop-culture observation, what is the point of this? The point is that you should avoid all this, if you can.
Be smart about your credit usage. Don’t create your own monster. It’s far easier to avoid a disaster than it is to dig yourself out from underneath one.
But if you’re already in the midst of your own debt apocalypse, let LSS help you Conquer Your Debt. Talk to one of our debt counselors about a Debt Management Plan and get things back under control. Solving your problems with your debt is a lot easier when you have the proper help to get through it. And our counselors won’t even try once to eat your brains.
Written by Dan Szymczak. To learn more, visit the LSS Financial Counseling website.