Monday, July 6, 2015, AM | Leave Comment
For decades, Americans have been borrowing and spending more than they could afford. That has always been the American way on a par with apple pie, Chevrolet, ballpark and hot dogs. Folks had included “spending more than they made” in their minds for quite sometimes.
When you borrow or rent money, you must have figured out how to pay it back to its original owner.
You must have done your calculations how much to borrow. Do your calculations. It might prevent you from buying on impulse.
Many borrow money using credit cards to take a vacation. When they come back and get the bill, they realize they have spent more and unnecessarily on things they didn’t need or didn’t have to.
Therefore, borrow as needed and spend as needed. The only way to not get into debt is very basic: Spend less than you make. You will never get into debt. Even if you were not careful and are heavily in debt, don’t despair. Start working on it today. NOW!.
The recession that rocked the boat for most Americans did not just fall out of the blue sky but in part because Americans were not educated enough in handling their personal finances.
You don’t need formal education to know that you ought not spend more than you make. Everyone knows that. However, you need to act on what you already know.
But to do that, you need self discipline, determination and the thought that when you die, you leave your finances in the black with no debt hanging off of your coffin.
You leave no debt because you borrowed and spent wisely.
To refresh your little gray cells, coffin is the wooden casket you would be buried in. When folks come for a wake, they (especially your spouse and kids) must not feel the extra burden of debt besides the burden of sorrow on their shoulders.
Wake of Debt with a Twist of Words
Wake is the need to mark someone’s debt as an event affecting the deceased family. It has become fundamental to human life especially in American society.
It has become a necessity to provide opportunities for private grief when you leave nothing else but debt as inheritance. This kind of social gathering is usually referred to as a wake. It takes various forms in different parts of the world.
Because debt is a potentially frightening subject and there are many taboos surrounding it, debt wake is often low-key occasion.
It is extremely personal because of debt, or may be not so for some. They are of the don’t care mentality.
The origin of the debt wake, however, is in behavior that is less inhibited when borrowing money. We must turn to it, spending wisely, in order to understand its psychological and sociological importance.
Americans are Wiser Now
There is news to the effect that Americans are getting wiser by paying down debt and thereby saving more in just interest alone.
It may not be good for the national economy which is more than two-thirds dependent on consumer spending but it is definitely good for individual finances.
Americans are saving at nearly triple the rate they did between 2007 and 2009, setting aside 5.3 percent of their disposable income in December, according to the Commerce Department.
Another thing is indebtedness has decreased in part because banks are less inclined to extend loans and have written off billions of dollars in loans that went bad.
Don’t you get a big thrill when you get your statement every month and see that the balance on your credit cards has gone down? It’s a great feeling, ain’t it? You should try it too sometimes if you are heavily in debt.
You can start with the obvious: cutting down on buying more clothes and many buy them for no reason at all, skipping restaurant meals and other splurges of your past life of so many years.
Everyone seems to understand what money is. How about you? Do you really understand what money is? Educate yourself.
The breaks on American spending were not working during the boom years. Now most are putting on new breaks on their financial vehicles and on their once fast-moving financial life.
Keep maintaining your breaks in good shape. The amount of debt relative to the overall size of the economy remains very high by historical standards.
And the personal savings rate remains well below the average of 7 percent for the past 50 years.
The average US household credit card debt stands at $15,706, counting only those households carrying debt. Based on an analysis of Federal Reserve statistics and other government data, the average household owes $7,327 on their cards; looking only at indebted households, the average outstanding balance rises to $15,706. Here are statistics, trends, studies and methodology behind the average U.S. household debt.
Current as of June 2015
In a Nutshell
Don’t ever despair. Everyone has to do his or her part. Forget everyone else and the national economy. You as individual take care of your own finances.
Some folks think it’s their right to spend more than they make. Instead, they must make it their duty to spend less than they make. Everyone has a place in the financial society.Facebook.com/doable.finance