The Debt Brainwashing of America

As I was trolling my Twitter feed today, I noticed that there was a lot of chatter about credit scores, student loans, and auto financing.  This, along with a segment I heard on the Dave Ramsey Show the other day, made me think about how people in America have become “brainwashed” into believing that being in debt is a good thing.  We are conditioned to believe that owing money to companies is perfectly normal, and in some cases, actually helps us.  According to USA Today,  80.9% of Baby Boomers, 79.9% of Gen Xers, and 81.5% of Millennials are currently in debt.

The influence begins at an early age, like most tendencies do, by learning from your parents.  When we see our parents spending money without properly budgeting or financing purchases without the thought or care of the consequences, it builds a sense of normalcy to this behavior.  It would almost seem abnormal to be the person in the family that does not have any debt and, in some cases, this becomes an obstacle in your debt-free journey.  I have heard many stories from people who were afraid or embarrassed to tell their family that they were trying to pay their debts off because they would feel like an outcast or were afraid that their family would not be supportive.

Then you have your friends, and if they are anything like some of mine, they are up to their eyeballs in debt.  They may not let the outside world know that they are, but they are.  We all know the saying, “Misery loves company.”, right?  Well, they may not want you to be miserable, but they may also not want you to get out of debt and leave them in that situation alone.  You have a history with these people and have developed habits with them, a routine.  Becoming debt-free is going to involve breaking some of those routines.

Digital Envelope System Vs Paper Envelope System

So, once you come home from your long day at work, you visit your mailbox and get bombarded by junk mail from credit card companies, from banks for loans, etc.  There is such a waterfall of companies that want to lend you money that, you convince yourself that you will payoff by the end of every month, but we all know that never happens.  I can hear you now, “But I need it in case of an emergency!”  To tell you the truth, this is where I differ from a lot of the debt-free people on the internet.  I don’t feel you need to cut up all of your credit cards to become debt-free.  Part of the debt-free journey is to become aware of your habits and change them for the better.  This includes being able to have a credit card for emergencies and not making other purchases with it.  One caveat, use your emergency fund first.  Always cash flow first!

One other thing I have always worried about on my debt-free journey and one other aspect of the debt brainwashing of America is the idea of your credit score.  If you payoff all of your debts, you will no longer have a credit score, or it will be very low.  That scares me and I know it scares a lot of other people because we have been conditioned to base our value on our credit score.  “I need to check my credit score!”  You need a certain score to buy a house, etc.  “I won’t exist without a credit score!”  My thoughts exactly.  You’ve worked so hard since you were eighteen years old to build that number up and now you want to get rid of it.  Talk about scary.  This is one obstacle I need to overcome in my journey and one reason that I am hesitant to give up all of my credit cards.

Dear Debt, I'm Breaking Up With You

The fact is that you can get a mortgage without a credit score and you can go through life without a credit score.  Will it be more difficult?  Absolutely!  It will take finding the right people to do the work and having the extra information to get things done.

Even with the surge of people going through their debt-free journey and paying off their debts, I doubt that being debt-free will ever be “normal”.  I doubt that the percentage of Americans not having credit card or student loan debt will ever be in an acceptable range.  The “American Way” of instant gratification and excess will not change anytime soon and that means that we will continue to finance those things that we cannot afford so we appear to be something that we are not.  Credit card companies and businesses will cater to those needs and wants and it will be a vicious cycle as it has been for so many years.

Or will it?

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