Gambling debts – the last place you want to be

All debts are not created equal. I have discussed good debt versus bad debt in an article previously and that can be read here – ‘Bad debt versus good debt – value for debt not value for money’.

In my previous article on bad debt I made the point that a debt is good if it adds value to your life. If you can see no long term value from your debt then it is a bad debt and should be avoided if possible.

I gave the example of a holiday and I said that it is a bad debt because it doesn’t add any long term value to your life and to who you are. After two weeks away all you have is an empty wallet and some nice memories.

Now don’t think I’m against going on holidays what I am against is going into debt to go on holidays.

Hierarchy of bad debt

Within the category of bad debt there exists a hierarchy of badness. To me there are differing degrees of badness in bad debt. The different degrees are based on what I call the physical element of the debt.

If you have acquired a bad debt in order to purchase something physical such as a car or a TV then you have something to show for your money. The amount the item is worth may be significantly less than you owe on it but it still retains some of its value. On the other hand if you acquired debts to purchase something that is non-physical such as a holiday or dining out then you have a problem. The problem is that there is no value remaining in that item.

Gambling debts – the worse kind of bad debt

Gambling debts are the worst form of debt. There are a number of reasons why this is the case. The first and most obvious is that there is absolutely nothing to show for the debt. What do you have? An expensive thrill that lasts for about ten minutes? At least if you buy a car you have something physical to show for it that you can sell to recoup some if not all of your expense. With gambling debts you have nothing to sell or show for it.

Gambling promotes a type of behavior that is risk loving and somewhat removed from the financial realities of life. I’m not going to go all moral on you now. I have been to Las Vegas and I had a really good time. I knew my limits and I had a budget for my gambling. Gambling small insignificant amounts is fun but it is so easy for it to spill over into something more sinister and dangerous for your finances.

However bad being in debt is (and I’m not trying to belittle it) to me I would imagine that being in debt due to a gambling addiction would be a whole lot worse. Not only have you a debt problem but you also have an addiction problem.

You may start out gambling money you can afford to lose.  Once in the grip of the gambling buzz the temptation to borrow to gamble is just too strong. Once in debt the logic becomes something like – ‘I’ll need to keep gambling in order to pay off my debts’ – and so the spiral continues. There may be the occasional win but in the long run the game is stacked against there gambler.

Here is a link to an article on the USATODAY website – “Gambling madness can snag court fans”. This article paints a very depressing picture of the damage that gambling can do.

I think that the article says it all.

If you think that you may have a problem with gambling then please try to get help. Trying to get out of debt while still addicted to gambling is a huge challenge and almost certainly destined for failure. The reason why is because the lure of ‘one more shot and I can win’ will always sucker the gambler. Tackling the gambling addiction first is the key to getting out of debt and more importantly staying out of debt.

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