I started this blog 3 weeks ago. My first and only entry strayed from what I had intended: speak honestly about debt, explore ways to live a healthy lifestyle without losing my shirt while working towards financial freedom and really just keep myself accountable. My first entry did all those things but was also coming from a place of negativity and complaint. Can we start over?
Hello, my name is Half-price, and I’m in debt.
I am currently $9,042.59 in debt according to Mint.com, my favorite online personal finance application. Much better than the national average: $47,568 of debt per capita…holy ****! So with that fact, the current state of the economy (which is actually good for some), the current unemployment rate, especially in California AND the fact that I’m only 25? I don’t feel that badly. At least much better than this guy. He is attempting to cut 100% of his $90,316 debt in ten months. But then again at least he spent it on something useful…a law degree from Harvard. Unlike mr. harvard I have no college debt. I got a full scholarship to a great 4-year University and didn’t see the need for an advanced degree for what I wanted to do. So what does my $9k of debt consist of? Three “investments” that have yet to yield much return in any sense of the word.
I’m attempting not to be bitter. After all it did gain me a great health product that will last me 15 years, contact with the producer of a major blockbuster film who calls me by cell phone and my first lesson in entrepreneurship…starting (and closing) my first business.
I’ve began cutting back on my already simple lifestyle. I have cut back on alcohol almost entirely (10% because of money, 90% because for some reason I all of a sudden have a tendency to get hangovers). Is it me or have my bank account and my liver conspired against me? My friends did warn me about the year 26 alcohol intolerance syndrome. I started shopping at the dollar store for basic toiletries. What would have cost me $35 at the grocery store was only $8 at the 99cent store. The only name brand item I bought was Colgate toothpaste (I’m typically a Crest person but I wasn’t going to be picky). The 99cent liquid detergent, foaming hand soap and body wash haven’t made me feel any less clean than normal…not once.
What is the stigma around debt? Where does it come from? Chances are we are ALL in it. A couple weeks ago I attended a talk given by Charles Eisenstein, author of Sacred Economics. He kept coming back to the story of how money began in this small village however long ago where instead of the traditional gift society model the mayor decided to introduce a currency made of round pieces of animal hide. He distributed 10 pieces to each family at the beginning of the year and said “at the end of the year each family will owe me 11 pieces”. Now this makes sense when compared to modern day money. We borrow $500k to buy a house and by the time we pay it back we’ve probably paid back double the amount that we initially borrowed, at least. This is very interesting, by the end of the year ten families would have to go bankrupt. Why? because where would that 11th piece for each family come from? So in actuality debt has been in existence almost exactly as long as currency itself.
It used to be that families would have a trade or a crop and they would produce way too much for themselves to consume so they gave away what was left…which was actually a lot. And if everyone in the town was producing and giving away a portion of what they had then everyone would get enough of what they needed: food, clothes, basic services, everything.
If you think about it some of the “poorest” people in America are not in fact the poorest. Why? because they have no debt! They live paycheck to paycheck? Yes. Get help from the government? Maybe. Are homeless and/or jobless? Some of them. But there are doctors, lawyers even Fortune 500 CEOs that are up to their ears in debt. THESE are in fact the poorest people in our society. So then “poor” is not a measurement of how much money you have in the bank (or under the mattress, or in the coffee can in the cupboard or in the safe behind the family portrait) but “poor” is a measurement of assets, relationships, borrowing power and class. Interesting.
I wasn’t exactly expecting to come to that conclusion…in fact I’ve never even seen the word “poor” from that angle. I’m thankful for the change in perspective.
Buy what you need, create what you want.
 When the news is scaring US citizens with “$47k of debt per capita” they fail to mention to the public that this number actually refers to public debt. That’s what the government owes per capita. Personal, private or “consumer” debt, how much actual individuals, not companies, or any level of government owes is actually between $7-20k depending on your sources.