Credit Card Debt and the March for More Stuff

America’s Average Credit Card Debt

In 2017, the average amount of credit card debt climbed to $15,654 (excluding people who pay off their balances in full each month). Understand that this excludes mortgages, student loans, automobile loans, and medical debt (assuming the latter hasn’t been placed on a credit card). That is, to me, a shocking amount of money tied up in plastic, with its onerous interest rates and fees. Even more frightening, many of those holding this revolving debt pay only the minimum payment each month, thus racking up more in interest (and fees, if they are late). Credit card debt, at these levels, ought to scare us, even those of us who are convenience users (or “deadbeats” in industry jargon, i.e. those who pay off their entire balances each month).

So, what is the source of all this debt? Certainly, some have experienced a medical or other setback which, even if they’ve been regularly saving for the future and avoiding the temptation to buy the latest, greatest thing, can wreak havoc on carefully planned finances. Even WITH insurance, individuals and families can find themselves in precarious economic situations, putting groceries and electric bills on the Mastercard because they have no other recourse. But I suspect that these people are in the minority. So, then, who are these enslaved folks? Is it just those who have had the misfortune to be born into the wrong circumstances? Or is it those who have succumbed to the exhortations of Madison Avenue? If I were a betting woman—and I’m not—I would put my money on the “gotta have the latest, greatest, newest” set.

The Consumerists

A consumerist is a person focused on buying consumer goods, perhaps even obsessed with it. Someone who needs the latest Kate Spade handbag or newest generation iPhone or the most powerful band saw sold at Lowe’s or dinner at the newest “in” restaurant. In short, a consumerist is someone obsessed with owning and/or consuming stuff. And often the consumerist is financing that stuff with a high-interest credit card or two or seven. If this is you, you are feeding a sure way of putting your economic security in jeopardy.

So I Have to Live Like a Monk?

Or a nun who’s taken a vow of poverty? Well, no, but if you aren’t paying off your filled-with-consumer-goods credit cards every month, you probably need to rethink your spending habits. If you are doing your part to save for the future, pay your rent/mortgage, contribute to charity, you are probably okay (although even those of use who do those things could benefit from examining our expenditures—try tracking EVERY expense for a couple of months—it can be an eye-opener, says she who suddenly realized just how much she spends at Starbucks). That said, you ought still to take a look at your life—are you strengthening or maintaining the important relationships or passions in your life? Frankly, that’s as important as strengthening your finances. Even if you pay everything off each month while saving for your future, don’t neglect your relationship capital. And that suggestion about tracking your spending? Look at what you’re using your money for, what you’re consuming, and ask yourself: does this reflect my values or am I frittering my hard-earned money on garbage that I’ll stop using or wearing six months from now? Is this an investment or an attempt to impress someone? Am I buying to further a goal (and yes, professional attire can be a veritable requirement for some jobs) or am I filling an emotional void? Asking yourself questions like these can go a long way in teaching yourself to spend more mindfully and more deliberately. And that, by extension, means you’re less likely to fill up your credit cards with unnecessary junk.

Consumer Debt Resistance is a Radical Act!

I fully believe that saying no to pointless stuff is a radical act (and one I’ll address in another post). If those overpaid CEOs can’t convince you to part with your dollars (or Euros) in exchange for the tchotchkes they offer, they aren’t going to be overpaid much longer. If the executives at credit card companies can’t convince you to mortgage your future, they aren’t going to be executives much longer. And if advertisers can’t convince you that you “need” something, those advertisers aren’t going to be paid much longer. You, the consumer, hold some cards in this game. You don’t have to give up and acquiesce. You can say NO.

Because frankly, how much #&%@ do we really need.

The Year of Living Frugally: An Introduction

A Clarification

First, I have no intentions of going hog-wild with rampant overspending come January 1, 2019. I’m not going to cash in my retirement accounts to buy boxes upon boxes upon boxes of useless “needs” from Amazon so that Jeff Bezos can be even richer than he already is. I am not going to raid my emergency fund to amass the complete set of Beanie Babies™. By nature and nurture, I am already a saver (thanks, Mom and Dad!) Indeed, I was one of the people queried in a journal article on the tightwad-spendthrift scale; my score had me firmly in tightwad country. But I’m working on ramping up my savings and thought I’d post publicly about it, as a way of keeping myself motivated. I started my career later than most (thanks to a delayed entry into college and then a couple of additional degrees beyond the bachelor’s), I’m living away from family, and frankly, independence is one of my core values. That includes financial independence. But while I’m pretty adept at living within (and below) my means, there certainly is room for improvement. Starbucks, for example, would be a perfect place to cut some of my spending!

What Are My Goals Here?

A bigger balance in the bank, for sure. I am responsible for myself. But also to enjoy life’s simple pleasures (i.e. the ones that cost little or nothing—the view of sunsets from the back of my house, a good book, throwing dinner parties where the conversation is scintillating, seeing Mars and Jupiter on a cold, clear January morning.) To reduce consumption. And to give more to organizations with values I share and people I care about.

But I Am Not Giving Up $27/lb Cheese

Je suis une turophile (I am a cheese lover). A serious cheese-a-holic. I love seeking out unusual varieties, typically artisanal and/or farmstead. Indeed, I’ve planned vacations around cheese! Supporting small or local producers is important to me. I’ve had the good fortune to have had conversations with several cheesemakers and it is a difficult life, made even harder by ridiculous agricultural policies that favor the likes of Kraft and Sargento. I feel good about spending this money and I’d rather cut back elsewhere than give up quality food. Better a small amount of something delicious than a vatful of overly processed garbage with added sugar where it doesn’t belong. I’d rather put my food dollars back into the hands of local organic farmers like Wendy Carpenter than in the pockets of ConAgra or Monsanto executives.

Please note that I rarely buy a pound of cheese at once (unless I’ve got a dinner party or luncheon planned or I am planning to give it as a gift).

Mindful Spending and a New Relationship with Money: The Ultimate Goals

These. Are. The. Goals. Mindfulness in general, but mindful spending in particular. I think we all need to remember that money is a tool, not the end but a means. So simply amassing money to have it is as much of a problem as willful, indulgent, irresponsible spending. Saving so that one can support oneself is admirable, but saving just to say “I have a bigger bank balance than you” is silly (and, frankly, points to a sad, insecure existence and/or hoarding). You don’t have money at that point; money has you. The flipside—spending, spending, spending, usually on credit—is equally unbalanced; in this case, you are owned by your stuff. Both are two sides of a greedy coin. Truly, the key is to strike a balance.

It Boils Down to My Values

It comes down to my values. What do I care about? What do I want to use money FOR? Supporting myself so I don’t burden others. Nurturing my relationships with my cherished and strongly loved friends. Contributing to causes important to me. Doing my part to reduce the rampant, soul-strangling consumerism that grips our society. And yes, some $27/lb cheese.