By Brian Redhead
Today’s financial crisis is devastating individuals of all ages. Depending on the source, the average household’s credit card debt is between $6194 (Buck) and $7430 (Wenzl). Although financial advisors caution against multiple accounts, most people have between four and six credit cards (Buck). No one seems to be immune from the struggle as even high schoolers are entering the adult world with astronomical debts (Buck). Educators aim to reverse this disturbing trend by providing comprehensive training on budget construction and debt management.
According to a recent New York Times article (Dunleavey), many Americans cannot afford the life they are leading. Senior citizens and those trying to live with fixed incomes find this task especially daunting. It’s essential to stop spending and find a way to differentiate between wants and needs. Budgeting is much more than a money matter. Just as living with a debt is an emotionally draining experience, the road to freedom from that debt is a serious undertaking that requires diligence, sacrifice, and commitment. Saving is another important way to effectively counter debt, but it’s a luxury that many Americans can’t afford.
Some financial advisors have even questioned whether saving is best for our wilting economy. The “paradox of thrift” relates to the negative effect on the economy when Americans stop spending (Wenzl). Still, most experts agree that individuals need to be careful not to spend more than they can afford. If any optimism can be found from the dismal experience of living with sizeable debt, it’s the increasing awareness of the need to carefully manage household finances. Young people are recognizing the importance to learn life skills that include money management and their older counterparts are learning to balance already oversized budgets.
Buck, H. “Falling Prey in a Plastic Jungle.” Columbian.com 7 February 2009. 10 February 2009 http://www.columbian.com/article/20090208/NEWS02/702089928
Dunleavey, M. P. “Change Your Thoughts, Change Your Spending.” The New York Times 6 February 2009. 10 February 2009
Wenzl, R. “Should We Spend or Save?” The Wichita Eagle 9 February 2009. 10 February 2009 http://www.kansas.com/news/story/693438.html