Debt

From www.nerdwallet.com/blog/average-credit-card-debt-household/

“A man in debt is so far a slave,” American essayist Ralph Waldo Emerson once reportedly said.
In light of this statement, I contend that I don’t need to have a college degree in economics to tell you that our current financial system enslaving the entire world is not sustainable – and headed for one hell of a spectacularly ugly crash.

Last month, the Washington-based Institute of International Finance published their latest statistics indicating that global debt had reached $247.2 trillion by the end of March this year, an increase of 11.1 percent from last year alone. In other words, since the start of this year, global debt rose by a whopping $8 trillion in just three to four months.

"Americans’ total credit card debt continues to climb, reaching an estimated $911 billion — a nearly 6% increase from the previous year — according to a NerdWallet analysis. 

"And the average household that’s carrying credit card debt has a balance of $15,432. Households with any kind of debt owe $133,720 (including mortgages), on average, the data analysis found."

I can't imagine it.

Let me say I was a single mom. My salary was never huge, middle management at best. Only one time in my life was I in debt and that was when my mother was dying and between her bills, my inability to work full time as part of her care, I ended up hugely in debt. 

As soon as I could reestablish  myself after her death, my whole focus was on getting out of debt. It took five years.

I was lucky enough to live in Geneva where I didn't need a car. Over the years that let me not only pay off my debts but buy a small income apartment for cash. My retirement studio in France I had paid cash for earlier because I bought it at a time that the franc to dollar was 10 to 1. 

I make it point never to charge something I can't pay off in 30 days. It means my money isn't going to interest payments. The average household pays $904 annually in credit card interest.

The idea that something is on sale and a bargain, use a credit card is an easy trap to fall into. But if you wait by the time you add in interest it probably cost much more than the original pre-sale price.

Right now my total debts are 0. Only regular living charges are part of the outgo. If I can't pay cash, I won't buy it and that includes the car we just bought. Yes it is a used car. I will miss the 20 year old car my husband and I bought five years ago for 2,500 Euros. It served us well and I blessed no car payment with interest. It got us from point A to point B and beyond. 

I liked the green color. It meant I could spot it in the sea of grey, white, and black cars (my husband is thrilled I used an Oxford comma in the last phrase). Yesterday in a huge parking lot with thousands of cars it was the only one that had a color. Sigh.

Back to the question of debt. Part of staying out of debt, is not buying to impress others, buying what you need (and sometimes when your heart and soul need something), buying what you love but not buying what you can't pay off immediately.