I had the distinct honor of being a guest on Dr. Carolyn Miller’s radio show last week, “Getting Good At Life”, and she asked me an interesting question. Did I believe that debt was cultural? I had never been asked it quite that way before. I have heard and used words like accepted in society and normal, but never cultural. Dr. Carolyn is a psychologist who has traveled to other countries and lives in a neighborhood where many cultures are represented. She has witnessed first hand how someone can grow up in a culture without debt, move to America, and continue those principles in this country. There are also people, like myself, who have lived some of their years here without debt. Therefore, we know that you can live in this great country and live a good life without debt.
So why is debt okay in America? Why have we become a culture of debt, where we use debt for everything even when it is debt that causes us such stress? This was brought to my attention just this weekend in my own family. My stepchildren and my daughter have been raised in households with debt and without, exposing them to the stress of debt as well as the peace of no debt. My oldest stepson and his wife have been married for almost three years with one child and one due next month. Over the course of the last six months, we have observed them making very unwise decisions when it comes to money, but I noticed this weekend that everything they are doing (what I know will cause them stress and financial pain), they are doing just like so many other young couples. And I keep wondering why? I say it out loud and it sounds like there has to be a better way, yet they are hearing and believing that it is the best possible solution.
For example, they just bought a new home without selling their old home. In their defense, the home they were in would not be comfortable for them and two children in the long-term. However, there was no big hurry to buy a house right away. They used the interest rates as a justification, but rates have been low for a long time and a month or two would not have changed anything. Now they are stuck with two mortgages and my son’s commute to work, which was 1 1/2 hours is now 2 hours each way (more gas and more time). The old house has had a lot of showings, but instead of waiting it out even a week or two, they are feeling pressured to do a lease to own, which is a horrible option and should never be done because of the risk. They are simply looking at the interest income, not the risk. And now that they own a bigger home, they (in their minds) needed new furniture which they financed and justified because it was 0% interest (still a monthly payment). Every time they talk about any of this they keep saying “we can afford it”, including the two mortgages. However, next month, when my daughter-in-law has the new baby, they will be without an income for almost a year. They are both teachers so their income will basically be cut in half. In addition to all of this, many times they make comments like “we can’t afford new shoes right now” which means they are strapped for the essentials.
I didn’t share this story to air our family business. I shared it because my son’s story is so many American’s story. I wonder right now how many of you are saying “they did what I would do” or have done the same thing they did. 20 years ago, I would have said that too. What they are doing wouldn’t have even phased me. It is the American way. So to answer Dr. Carolyn’s question “Is debt cultural?”, absolutely. But when you look at the American debt culture, do you really want to be a part of it? Do you want to be just like everyone else, broke, in debt, stressed out about money, not happy in you j-o-b, with no retirement or savings? Or do you want to do what you know makes sense? Do you really believe that carrying two mortgages on two normal salaries makes sense? Do you really believe that being the bank for someone who couldn’t qualify for a typical mortgage makes sense? Do you really believe that making payments on items such as furniture, appliances, and flooring makes sense? Do you really believe that having any payments other than one mortgage on one salary with a new baby makes sense?
I love my children and it is that love that makes me want to shake them sometimes. I really wish I knew why people can’t see stupid decisions, but if we could see them, we probably wouldn’t make as many. I did stupid for so long, I never want to go back. I hope everyday that my mess which has become my message will help someone before they go to far. I challenge you to look at your debt and ask yourself “why do I think that this is okay”? If the answer is because everyone else is doing it (cultural), then stop. If that is not your answer, I challenge you to look at what your life could look like without debt. I am willing to bet that at the end you will find peace and less stress.
Let’s start a new culture today - one of cash, buying only what we have the money for, and saving for our futures, which are just around the corner. Have a blessed week!