One major change that has occurred over the last hundred years or so is the amount of debt that Americans carry. At the turn of the Twentieth Century, most Americans had almost no debt, and many or most owned their homes or lived in the family home. Now, just 120 years later, the average American is NINETY THOUSAND DOLLARS in debt. While this figure includes mortgages, it demonstrates that our lives are out of balance.
As many of you know I practice bankruptcy law, so I see every day what happens when spending exceeds income. Other than a house or MAYBE a car there is no reason to go into debt. Too many of us are all just in the habit of swiping that credit or debit card, and there is no immediate difference between swiping ten dollars or a hundred dollars. I am constantly amazed at the people I work with who have no idea how much their utility bills are, their insurance, and sometimes even car payments, as they have it all set up on direct withdrawal and live on auto-pilot.
So, this month’s challenge: make a budget, and stick to it. Make coffee at home, skip the Starbucks (or even the convenience store). Cook more, eat out less. Pack a lunch occasionally. Pay down your debt; save more, spend less. There are many tips and techniques out there for budgeting, but ignoring the math and just ‘living paycheck to paycheck’ will never put you in the mindset to improve the situation.
Don’t get me wrong, though. I am not saying that we should live like misers, or never indulge ourselves at all. Just be mindful of your budget, and live below your means. Your grandchildren will thank you.
Witan Allen Turnage