On the drive home from a visit to our “Wealth Manager,” (Apologies for the dramatic quotation marks. I find the job title funny. Probably because we are not considered wealthy by most American standards.) I asked my husband how people like us who have jobs in retail, business, and sales could afford houses, new cars, and cruises. My husband’s theory was they are willing to live with a lot of debt and that’s pretty normal for most Americans. There’s the difference between me and most Americans. I’m almost debt phobic. Can you blame me? Look at some of the statistics:
Do you have a credit card? In 2017, the average American household owed $7,136 on credit cards. (https://www.fool.com/credit-cards/2017/12/11/heres-the-average-american-households-credit-car-2.aspx)
Do you own your house? In Ohio, the state in which I live, the average mortgage debt in 2017, was $129,106, which is actually one of the top ten states with the lowest average. (https://www.experian.com/blogs/ask-experian/how-much-americans-owe-on-their-mortgages-in-every-state/)
Do you have a car loan? The average monthly new car payment in 2017, was $479 with a commitment to pay for 68 months. (https://www.thebalance.com/average-monthly-car-payment-4137650)
Do you have student loans? As of November 2017, a student graduating with a Bachelor’s degree in the state of Ohio has $19,300 in student loan debt. (http://www.businessinsider.com/student-loan-debt-average-by-state-map-2017-11)
I look at these statistics and have to ask: Why all this debt? Does it make us happy or do we feel in competition with our friends? If it’s the latter, STOP. RIGHT. NOW. You can go for a while carrying debt, but eventually it will bite you in the patootie and in the meantime, the stress will eat you alive. (https://moneyish.com/ish/americans-are-crappy-with-money-heres-exactly-how-thats-wrecking-their-health/)
As for me, living as cheaply as possible is a game. I use coupons. With digital coupons, it’s easy. For holidays, I ask for gift cards. My husband and I have neither a mortgage nor car loans. We have a college student, so helping her pay for that is a priority. We also prioritize saving for retirement. I had a side gig working retail in order to help fund both and yes, it was worth my T.E.A.M. (Please see my post: Is It Worth Your T.E.A.M.? for the punchline to this inside joke). We also do some charitable giving, but that’s private, so I’m pulling a Gump (“That’s all I have to say about that”).
So, wondering what you can do to lessen your debt and increase your peace of mind? I defer to the Jedi Master Dave Ramsey. He has great strategies. We don’t follow all of them, but the ones we can, we do. Before you surf over to his website: www.daveramsey.com, (The link is for your convenience. Dave Ramsey doesn’t know I exist, so he does not compensate me for the link. If there is another money master you prefer, go to his/her website and start digging.) here are some suggestions to get you started:
- Break a bad habit – smoking, for example costs you money not only for the cigarettes now, but also for the inevitable medical bills later.
- Break a good habit – the coffee and breakfast sandwich you buy on your way to work can be made at home for pennies.
- Save cash. Literally. Save one of the return envelopes that accompany the bills you receive in the mail. Every Friday stick $30 in it. By the end of the year, you will have $1560.
- Embrace simplicity – it’s kinda trendy now. Get a library card. You can check out movies and music, as well as books, for free. And not just hard copies; digital too. Choose to explore a city nearby for vacation instead of going somewhere far away. Explore your hometown’s metro park system for outdoor entertainment. Dust off the board games and invite friends over to play. Have everyone bring a snack to share.
Adopting even just one or two of these practices will make an exponential difference in your life. You cannot put a price tag on the peace of mind freedom from debt gives you.