Seth Godin observes there are more than 3 million millionaires in the U.S. (8 million if you count real estate). In the same post, he says the average household has $8,000 in credit card debt.
I clearly remember when there was no such thing as a consumer credit card. You paid for the things you purchased with cash or a personal check. Perhaps that’s why I have never failed to pay my credit card bill. As soon as the bill came in, I paid it off. Period. And that was true when I was living on small town DJ money back in the early 70’s.
I consider myself fortunate that I come from a time and place where you paid your bills and you paid them promptly. (And if you feel the need to email to tell me I’m an insensitive prick, please attach a scan of our credit card bill. We’ll go over it together.)
I’m just saying… the way we view debt has changed. For good reasons or bad.
I’m going to tread lightly because obviously some folks take their financial security (or lack there of) very seriously.
This is just my personal observation, take it with a grain of salt—the rise in consumer credit debt and the relative decline of personal savings go hand in hand with the collapse of the idea of personal responsibility. What made the “greatest generation” exactly that was their acceptance of the idea of personal responsibility. In each subsequent generation there has been a significant abandonment of the idea that you are responsible for your decisions and the consequences of your actions.
While I understand what Gestalt is saying, I don’t think any of it excuses poor financial decisions. If the younger generations are under greater pressures to consume, then we are also uniquely prepared to understand the financial consequences of our decisions. We have all seen the “time value of money” we have all grown up understanding 401(k)’s, Roth IRAs, mutual funds, consumer credit, equities and bonds and compounding interest.
In the end, there is no excuse for spending more than you make. (yes, I have an AMEX, yes I pay it off each month—and yes I have made bad financial decisions)
This talk of credit cards and deferred gratification reminded me of a quaint practice called “lay away.” I remember my mom “putting clothes in the lay away.” And maybe some furniture. It worked like this: you saw a dress you wanted but didn’t have the money to purchase. So you paid a small amount and the store put the dress “back” for you. Somewhere in the “back” of the store, one assumes. Each week you came in and paid something until you “got the dress out of lay away.”
Why would you do this, you ask? Well, you wanted the dress and it might be sold before you saved enough money to buy it. Well, you had to be there.
I confess I don’t have the balls to mix it up with someone that can write a scorcher like Gestalt. Besides, I’m too depressed by the realization I grew up “in the middle of the 20th century.”
There is a reason credit cards and other forms of debt are so popular now– it’s because the helmsmen of our neoconservative, plutocratic, cynical, self-loathing, foam-at-the-mouth consumerist culture cannot abide by people being as free as they used to be. At every turn we are bombarded with imagery that tells us we are not good enough, smart enough, healthy or skinny enough, connected or creative or rich enough. And then when we are properly saturated with the blind hunger to improve ourselves toward some synthetic and unattainable ideal, we are given the easy solution: just charge it!
What’s the outcome? Indenture! Misery, Fear, and an endless series of payments to the wealthy elite at 31% APR. A way of limiting freedom like the old Company Store. Of course you can always opt out of the suburbanite cube dweller debt cycle, ignore the never-ending onslaught of you-are-not-good-enough messages, and live free like Steve and his friends did in the 70’s… but we are are products of our environment, and unlike somebody who grew up in the middle of the 20th century, us youngsters are programmed to a mediated, capitalistic universe where something does not exist if it is not for sale in some way. Most of us simply cannot break free of the decades of programming we have been subjected to. And, that’s the way they wanted it to turn out! A generation of debt slaves, doing what they are told and not getting out of line with any of that free-thinking bullshit that made your generation such a pain in the ass.
So, when I read that this sky-high average household debt is the product of some sort of failing of character, I am a little bit put off, since we can only live our lives according to the options we find in front of us. Our poisoned culture took away most of the options you had.
What’s credit card debt? A truly foreign concept. Of COURSE you pay your bills promptly. ALL of them. Just ask anyone who’s ever worked for me. They get paid the day of the gig.
The only good reason to use a credit card is to compile large quantities of frequent flyer miles.
Right on the money regarding “cash on the barrel” as my Grandfather like to call it! He always used to say, if you can’t pay for it right then, you probably really don’t need it.
In the 12 years that my wife and I have been married, in one stint, I recall our total credit card debt being near that $8000 mark- and in one year, even higher! So, I did what every great financial master would do- close out all those credit cards… pay them off and applied for the American Express Card!
The great thing about this card- it forces you to pay off the entire balance each month. It is very handy for those times in your life when something goes wrong or breaks… and you don’t have the cash “right then” to pay for it… but you know within the next 30 days you will.
Great Post Smays!
Hey, I’m above average! Whooo!