My goal is not to blow my own horn. I simply want to establish my credentials. Over the years I have spoken to live audiences on the subject of personal money management more than 1,500 times throughout America and Europe. In fact, I wrote a book called No Debt No Sweat! on this very topic. For years, I did a regular morning TV segment on the topic of personal finance (my kids were the only ones on the block whose dad had a makeup kit!) I’ve written hundreds of articles about money. On average, I speak to audiences more than 250 times yearly, teaching people how to handle their money. So it’s fair to say that I’ve got a real interest (and some experience) in this area. Over these years I’ve learn a lot about how people deal with their money.

The Cold, Hard Facts

Today it’s possible (and actually probable) that a young person will go through twelve years of school and four years of college—supposedly being taught what they need to know to be an educated, productive member of the culture—without ever being shown how to balance a checkbook, do a budget or avoid a bad credit card deal! In my years of teaching on money, I’ve marveled at how some of the most educated people out there (i.e. doctors, politicos, lawyers, etc.) are often dummies when it comes to their finances. 

The facts should give us all pause:

  • Personal bankruptcy is a huge problem in America. In recent times, there have often been about 1.5 million bankruptcies yearly. In some years, we have had more bankruptcies than undergraduate college graduates. Think about that: More bankruptcy decrees than college degrees!
  • Presently the average household debt in America, not counting mortgage debt, is roughly $15,000. But, remember, that’s only an average. When you factor in the number of people who live responsible lives with no debt, this means that many others are in a world of hurt. I counsel people regularly whose short-term debts exceed their annual income.
  • Americans are presently carrying over one trillion dollars of credit card debt. Many people think nothing of buying this week’s groceries on a credit card and paying for them over the next twenty or thirty years. It has been estimated that, depending on terms and interest rates, if you’re are carrying a credit card balance of $4,000 and are paying only the monthly minimum, in many cases it may take more than twenty years to get rid of that debt!
  • The average fifty-year-old has less than $40,000 of total wealth, including his or her home. (To have any real hope of stockpiling $1,000,000 by retirement time, that fifty-year-old will need to start saving at least $25,000 every year until the gold watch. And even that may not be enough to hit the goal!)
  • With card debt having tripled since 1990, today the average family is carrying about $10,000 in outstanding credit card debt. Nationwide, there is roughly one trillion dollars of credit card debt.
  • Although many students leave college with more than $20,000 in loan debt (that doesn’t count the credit card and car loan debt), many depart the ivy halls without a job. So they become convinced that the solution is more education, which leads to even more debt. Eventually, with multiple sheepskins in hand, they hit the hard, cruel world only to realize that their chosen major doesn’t produce jobs that pay enough to allow them to aggressively kill their student loan debt. They spend their adulthood trying to catch up—constantly fussing with their spouses and unable to relax with their children. Twenty years later, they have nothing saved for their kids’ college or their retirement.
  • As of 2009, there was about twelve trillion dollars in outstanding mortgage debt, which represents roughly fifty million home loans. Since 2007, millions of Americans have lost homes because of terrible loan products they bought into between the late 1990s and 2007.
  • My experience convinces me that more than 70 percent of all Americans are in financial pain—living from paycheck to paycheck. And that number is growing.  Many people who always considered themselves middle-class citizens made bad decisions that, today, are costing them dearly. 

Predictably, there is a lot of finger-pointing.  It’s always easy to blame the bank or the mortgage company when we have too many bills and not enough money.  But the fact is: Everyone is at fault! I blame everyone.