I am an average American. I am married. I have 2 amazing children, ages 8 and 6. We live well, but we are definitely middle-class. I spent a couple of years in college but never got a degree. These days I work for an HVAC company as a technician. The money’s decent. But in the current economy, my hours have been cut back a bit.
My wife is beautiful and she works part-time doing medical billing from our home computer. Together our take home pay is $49,777 per year. That comes to $4,148 per month. We have a nice house and two nice cars. We take a nice vacation every year with the kids. Both kids are into lots of things: piano, dance, travel soccer, art classes, T-ball…you get the idea.
So, the problem is every month we’re spending a bit more than we make. But that’s everyone these days, right?
The fact is right now we spend $7,288 per month. Yeah, I know. It’s more than the $4,148 we bring home every month, but like I mentioned, we like to live a nice life, nothing crazy, but nice. It’s important that the kids have nice stuff and lots of good activities, right?
I know, I know. We need to spend less. We can’t keep spending $3,140 more than we make every month. Every month we just end up with $3,140 in more credit card debt.
So, last night I sat down with my wife and we went through the budget. I mean everything. We looked at how much we spend on food, utilities, clothes, vacations, eating out, our Disney timeshare, travel sports, car payments, etc. I crunched every number I could and I found that, if we really tried hard, we could cut our spending by $57 a month. Pretty good, right? My wife was even more aggressive and she wanted to cut $114 a month. I know, I know, it still means we’ll be adding somewhere between $3,026 and $3,083 in new credit card debt every month.
And um…I should probably mention we already have $325,807 in credit card debt right now. Is that a lot?
I think we’ll try my wife’s plan, or maybe somewhere in between. Either way, I feel like we are on the road to recovery because now we are only going to be spending somewhere between $7,174 and $7,231 per month. Sure, we’re still only making $4,148 a month, but at least we’re closer, right?
By the end of the year, we’ll have around $353,000 in credit card debt and we’re only making $49,777 per year.
In 5 years, we’ll have around $510,000 in credit card debt. I sure hope my minimum monthly payments and interest rates don’t start going up, or my credit will be ruined and I’ll lose everything.
So here’s the big question: is the way I’m handling my finances moral?
Should I keep spending the way that I am? Or should I start spending only from what I have and spend it on necessary items first? Do I have a moral obligation to make drastic cuts and attempt to live within my means?
In case it’s not already obvious, my family finances are exactly the same as the federal budget. The same level of overspending, the same staggering debt, and the same laughably low proposed spending cuts. Somehow when all the talk is trillions and billions, I think we lose sight of what’s really going on.
Now anyone out there would look at a family overspending on this catastrophic level and say, “What a disaster! What irresponsibility! Stop now before you end up on the streets!” And this outrage would be correct. Overspending your family into oblivion is obviously immoral.
But why does it seem to be okay when our government does the exact same thing? Why do we let them?
We – or rather our children – are on the hook for all these expenses. Let’s face it, even if we stop overspending right now today, we are still just like a family with $325,000 in credit card debt and making only $50,000 a year. Think about that. Think about how long it would take a family to dig out of that hole.
The politicians in Washington on both sides of the aisle need to make meaningful spending cuts now, none of this $30 billion, or $60 billion, or even $100 billion. That would mean nothing. That would be as laughable as the bankrupt family cutting $57.
The moveon.org’s and others who claim that cutting any spending is immoral have it utterly backwards. Failing to stop this overspending right now is the truly immoral choice. Let’s stop spending our families into oblivion.