In reading various articles about Christmas shopping, I've stumbled across these three statistics:
- Most Americans plan to spend an average of $780 on presents.
- Most Americans are still paying off Christmas debt in July.
- The average American income is around $44,000.
If you want an idea how ubiquitous credit cards have become, consider that it has become cliché for child psychologists to advise parents that using cash in front of their children will teach kids about the value of money. A child doesn't understand the significance of a credit card, but he can watch Mommy counting bills from her wallet and handing them to a cashier. It's hardly paranoid to speculate that, today, that's something many children may not see.
We live in a society littered with credit cards and mortgages, where large fractions of every paycheck go toward things that have already been bought. House and car loans have been around forever; but today people are buying clothes, computers, purses, televisions, jewelry that they can't afford until next week. Perpetual debt has become the de facto standard; and as a result, personal savings have hit their lowest levels since the Great Depression.
Congress recently tightened the reins on bankruptcy filings, which is rather like throwing out the medication without curing the disease. The problem is now going to get worse, a lot worse, before it gets better. It may not be cheery, but it's something worth considering during this holiday season. You can put yourself on your Christmas list with three important gifts:
- Destroy your credit cards.
- Pay attention to what you spend.
- Save a little every week.
I don't claim to be able to predict the future, but I can definitely read a forecast -- and it is going to get worse, a lot worse, before it gets better. Take my advice. Inoculate yourself.