Saturday, September 17, 2005


Debt is on the rise. In a world of pre-approved credit card offers coming daily in the mail to "90-days same as cash" promises bombarding our brains through commercials and retail signs, we are on a quick path toward the destruction of savings. Back in the day, after surviving the Depression and WWII, people saved roughly 8% of their income. That rate continued to rise (and fall only slightly) before making its drastic decent shortly after 1980. In the charge-everything new millenium, savings have plummetted to nearly zero in the last few months. This lack of savings has been mirrored by the rise in debt. In 2000 debt ate up $1 out of every $5. I cant imagine what the ratio is today. Credit card debt alone averages $7200 per household. Thats not including such debts as school loans or car payments. Today too many people are placing their financial trust in the rising value of their homes. But obviously a home only translates into wealth when you sell it. Then where are you going to live? In a house that by now is costing just as much if not more than what you sold your other one for. Besides, there is a vigorous debate going on right now over whether the housing boom has become a bubble that will shortly burst. Do you really want your welfare depending on something so risky? What scares me the most is that the age of debt creators has lowered significantly. On every college campus, young adults are being propositioned into "building" their credit when in fact what happens is that they start building their debt... earlier. People are maintaining a "have it now" attitude when in fact it took our ancenstors years (if at all) to obtain what we are seeking.
I know all of this b/c I fell into the trap too. When I got married I tried to furnish our new home and get all of the stuff I wanted to create a warm place for us to start off well. Luckily, before it got too crazy, we attended a Financial Peace course and got ourselves on the right track as a couple. It was there that we learned how to fight the trend and get ourselves on, the ever so-dreaded budget. It has taken a lot of work and a lot of sacrifice, and we still have a long way to go, but the outlook is good. I highly recommend taking the narrow path and making the hard decisions now so that you wont be living a life indebted to debt or leaving behind a legacy of debt to your family when you are gone.
But none of this can happen until we realize that debt is a disease and it's spreading.

1 comment:

Bethany Shea Roe said...

SO TRUE!!! Jordan will be so proud! :) It is ridiculous. It's a fact that irritates me every time I think about it. Jordan and I have $0 amount of debt and money in savings- never late on bills and yet, we can't get the electric bill in our name without a huge deposit b/c we don't have enough credit!!
Who thought up this system anyway?! :-)

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