Americans have a spending problem… and no I’m not just talking about the government.
Most Americans are so broke that 40% of people surveyed said that they wouldn’t be able to come up with $400 for an emergency!
But why do we have such a spending problem? Why do we have such difficulty with saving money? Why are so many Americans in financial ruin and not doing anything to fix it?
Well, the big problem is that the American culture around money. Let’s deconstruct some widespread money habits and issues that are becoming super problematic for Americans and their wallets:
Can’t afford to spend what you’re spending
Greed and materialism are cornerstones of the American economy. Banks and businesses are all counting on you to overspend in order for them to make money.
When it comes down to it, we aren’t making enough money to support our habits – specifically our shopping habits.
A lot of people feel an expectation to own certain things, drive a certain car, and live in a certain area. But most people don’t make enough money to have all the luxuries they feel they need – or deserve. Which leads to overspending which leads to credit card debt.
It’s almost impossible to save for the future when you have a ton of credit card debt or loans to pay off just to support your lifestyle.
Simply living within your means can change your life as far as money goes.
Student debt is virtually unavoidable nowadays if you want a degree. And honestly, most jobs worth having required a degree so… this isn’t something that Americans can change through habit alone.
Back in the day, it was possible to work your way through college and not accrue any debt. However, because the cost of college has increased exponentially, whereas wages have not, it’s pretty much impossible to work part-time and make enough money to pay for college.
Post-grads are having a more difficult time finding high paying jobs which then makes it more difficult to pay off debt because they’re barely making enough money to survive as it is.
The only solution to the student debt issue is to pay it off dilligently… or we can hope that the government decides to forgive all our loans, but that’s insanely unlikely.
Not Educated Correctly on Finances
How many of you learned what a mortgage was in high school or college? How many of you learned how to invest, how loans work, or how to budget?
Money management is something that is under-taught in most schools. Sure, high school is great for preparing you for higher education… but what about surviving in the real world?
Most students are taught minimal material about money management in school. While there could be a whole mandatory class or undergraduate section devoted to the subject, the subject of money management is usually allocated to a brief unit in a class like government or health.
If Americans taught our children how to understand and manage their finances, then they would be less likely to end up in financial trouble in the first place.