Money is a huge issue in today’s world, and understandably so. This is partly due to the fact that money is a subject that most people never really talk about. And that, perhaps, is why so many people these days are failing financially.
Lots of people (myself included) like to complain about how much the U.S. government spends every year. Our government debt is so massive the numbers don’t even seem real. But when you look at the amount of consumer debt in the United States, it becomes pretty clear that our government is a reflection of ourselves.
The Debt Bubble
U.S. consumer debt is on track to reach $4 Trillion by the end of 2018. That’s roughly $12,300 for every man, woman, and child in the nation. That includes credit cards, car loans, student loans, and personal loans.
Throw mortgage debt into that mix, and the numbers get even more ridiculous – total household debt was over $13 Trillion at the end of 2017. That’s $40,000 for each person, including my 3-year-old. I don’t even want to know what those numbers look like when you throw our government debt on top of all that.
I’m not pointing any of this out to judge anyone. If I were to try, I’d just end up pointing the finger at myself. I embarked on my own debt journey back in my college days, and I’ve grown to regret all of those years I spent more than I made, borrowing to make up the difference.
I was a (mostly) good student in high school, but I was lazy when it came to money. In-state tuition at a state college was in my future. I never put much thought into where the money for that education would come from.
When I started college, my parents paid it. I guess I was lucky; my older siblings didn’t go to college, so the money (I assume) they had put away was available by the time I got there.
But that didn’t last.
My dad worked for Enron for a lot of years. He took a lot of his retirement in company stock. You can see where this is going. During my second year, my parents had to decide between rebuilding their retirement and continuing to pay for my college, and they rightly chose the former.
For a while, I tried to blame them – not overtly, of course. I kept those thoughts to myself. And over time, I came to realize that not only had they made the right decision, but that it had been selfish and stupid of me to assume that my parents would carry me all the way through college.
Digging The Hole
But I was still a dumb kid, and, not realizing that my best course of action would have been to apply for as many scholarships as humanly possible, I ran over to the student aid office, filled out the FAFSA, and started signing up for student loans. My only consolation is that, with U.S. student loan debt reaching $1.5 Trillion, I wasn’t the only idiot out there.
I made some other mistakes along the way. I was covering my rent and bills, but anything extra I had coming in I blew on stuff, mostly fast food, CDs (the music kind), and books. There was no money in my savings account.
My future in-laws recommended that I get a credit card, to build my credit and to use “in case of emergencies.” And, of course, to get the “cash back” offer on that particular card. I went for it. Problem was, I had no idea how to do a budget. With my bad spending habits, every month had its own “emergency” shortfall. AmEx was there to fill that monthly gap. It didn’t take long before the card was maxed out. Pretty soon, I was paying a little on the card each month, only to max it out again the next month.
My future wife and I took a class on finances during our engagement. Everyone else in the class was approaching retirement age. As the young couple in the room, we heard a lot of “You’ll need this information later on.” Now, I only remember two things about that class: it was boring, and it was full of information I could use later on in life.
In a quest to out-earn my bad behavior, I went back to school. I came out with a Master’s Degree and more student loan debt.
Flash forward a few years. I married my wife, and we moved into a 2-bedroom apartment. The assumption was that we would soon buy a house, so we brought with us all of the stuff that we would need to furnish a house, and crammed it all into that apartment. We turned what should have been a comfortable living space for a newly-married couple into a cramped and uncomfortable burden.
So, naturally, we went out and bought a house that we couldn’t afford.
We could have afforded it, but we ended up working against ourselves. Both of us grew up in households were you just didn’t talk about money, and we carried that into our marriage. We took on the shared debt of a mortgage and a car loan, but we weren’t on the same page with our finances. I had my income, and she had hers. I had my bank account, and she had hers. Each of us assumed that the other was doing things right. We weren’t communicating, so we had no way of knowing just how wrong we were.
Over time, the continuing struggle (and failure) to make ends meet led me to lose hope. No matter how hard I tried, it was never enough. I went to a very dark place. I was stressed out and depressed. I drank too much, neglected my family and my responsibilities. I was unkind to my wife. Several times, I contemplated suicide.
I couldn’t see a way out, but thankfully, I found one. And that’s where I will pick up in my next post.