Having access to credit is a powerful wealth-building tool. Getting out of debt is not a goal you want to make because when you focus on what you don’t want, you are reinforcing the negative. If you focus on cutting back and sacrificing, you are missing the opportunities that come from having access to credit. Most times, the reason for thinking that getting out of debt is the solution is because reducing payments will provide more opportunity for current cash flow. The increased cash flow will come from eliminating the debt payments as well as the interest expense on the debt. In theory, this makes sense. However, it completely misses most of the benefits you get from the credit. Outstanding debt is a great indicator of the true cost of your desired lifestyle. If you focus on eliminating debt so you have more money to spend on your lifestyle, you miss the fact that you have already been living a lifestyle that is more expensive than you have income to pay for. If you also take the stance that you are going to pay off outstanding debt and pay off the loan or credit cards so you don’t rack up the debt again, then you have essentially told yourself that you don’t trust your ability to make good financial decisions, that you don’t deserve the lifestyle you want and that the discipline you just demonstrated in paying off the debt isn’t worth anything because you won’t be able to use that same approach to expand your finances. Finally, if you pay off your debt and close out your accounts, you can also be negatively impacting your credit score. So all around what seemed like a good idea is in fact one of the worst financial strategies you could have.

What is the focus for debt then? Learning to manage credit to maximize the benefit it has in being able to help you create wealth is your overall goal. The focus, when it comes to debt and credit, is the same as it is with all of your finances: how can you use your income and resources today to create income so you can live the life you want to live today as well as in the future. Your focus with debt is to create income, and when you have enough income to live the way you want to live, the credit and debt will take care of itself.