The American Dream is a kind of mantra, a national identity. It allows the citizens of the country to believe they have equal opportunity for freedom, success, and prosperity. The whole dream is based on the US Declaration of Independence that states “all men are created equal” and they have the right to life, liberty and the pursuit of happiness.
The American psyche has been programmed from their youth to hold onto specific images of success and freedom. It’s all about owning that house with the white picket fence, having two cars and a couple of kids. These dreams embrace hobbies and a person’s social affiliations such as who they should belong to while chasing that dream.
You can attain your dream fairly easily. Borrow money using credit cards, overdrafts, personal loans and mortgages. Do you need a college degree to be successful in your job? Apply for a student loan. The idea was to go to school, get good grades, attend college. Then get a secure, well-paying job, work hard and get the benefits. Once upon a time, you could stay in the same position for 40 plus years, retire, enjoy a few years of a pensioned retirement then die.
Dreams Strangled by Debt
In the USA, household debt in August 2017 was at $12.84 trillion, an increase of $554 billion from 2016. Of that, mortgage debt made up $8.67 trillion and student loans were at $1.34 trillion. People buying cars had amassed a $1.19 trillion debt total.
Keeping up with the Joneses by buying a home and owning a car and obtaining a college degree… This is turning the American Dream into more of an American Nightmare! Now add credit card debt and personal and payday loans to the figures. One can see that owing money seems to be more fashionable than worrying about how much debt you have.
Of the total household debt mentioned above, almost 5% was made up of delinquent loans. It means people were borrowing but were unable to repay the money.
The Claws of Debt
People are struggling every month trying to meet their minimum monthly payments. Once the debt has you in its claws, it’s hard to escape. It takes both time and money to get yourself out of debt. The sad part is that many people are unable to clear their debts for the rest of their lives, continuing to make minimum payments but never getting the debt entirely paid.
There are solutions for each problem. Professional help is available to those people who really want to get rid of debt. Specific companies provide counseling and assistance in helping to make a plan for you to reduce or pay off debts. Individuals can learn about better money management, creating and sticking to a budget, and looking for reasons that lead to debt.
Looking at the household debt figures seems to indicate that people live beyond their means. You can buy anything you want on credit because the amounts look affordable when presented to you. The problems occur when promotional periods end or payments are late, and interest rates start to rise. If you don’t know how the system works, you can accumulate significant debt very quickly.
Borrowing is Easy Money
Lending standards have dropped considerably recently. It’s a lot easier for even a bad credit borrower to apply successfully for a loan. The reason for this ridiculous amount of nation-wide debt is simple: we have no idea how to save and are good at spending.
Apart from personal and household debt, have you heard how much debt the US Government is in currently? It’s about $20 trillion! The statistics seem to indicate that not only do most Americans expect to have a debt. They have also become comfortable with the fact that it is an acceptable way of life. Therefore, they make no real effort to avoid it!
But living with financial debt is not a requirement and nor should individuals get comfortable with it. There are many steps that you can take to pay off debt and experience a real American Dream by attaining financial independence. A financial specialist by the name of Dave Ramsey wrote a book about how to get rid of debts entirely by using the “debt snowball.” To be free of debt a person needs motivation as well as a system. The trick is to pay off the smallest debt first and then work your way up to the largest one. Obviously, you would need to create a stricter budget so that you can put money towards debt eradication.
Don’t Accept the Norm
There is no such thing as a manageable amount of debt. If you want to live your life tied to financial obligations, then you have chosen to be happy with having a certain amount of debt. That hardly makes sense. While you owe money, then everything you do is controlled by someone else until you pay back the money you owe. Financial freedom comes to you when you have decided to work hard and pay off all your obligations. The American Dream is not about having debts; it’s about being able to be debt free.