Lifestyles in this country are out of whack. We have become of nation of people who cannot live within our means, finance everything, own nothing, and our lives revolve around monthly payments. People drive cars they can't afford, buy houses beyond their income bracket, and will make the minimum payments on their credit cards for the rest of their lives.
I recently stumbled across Dave Ramsey and think that he's got it right. Eliminate all of your debt as fast as you can and pay for everything with cash. Cash is king. If you don't have enough money to pay cash for something, then you can't afford it. His website is a little cheesy and looks too much like a stereo typical self-help program, but I listen to him on the radio and he gives really sound advice to callers.
"Myth: Debt is a tool and should be used to help create prosperity.
Truth: Debt is not a tool; it is a method to make banks wealthy, not you.
Debt is dumb. Most normal people are just plain broke because they are in debt up to their eyeballs with no hope of help. If you're in debt then you're a slave, in the sense that you do not have the freedom to use your money to help change your family tree. According to a recent USA Today article about debt, 78 percent of baby boomers have mortgage debt, 59 percent have credit card debt, 56 percent have car payments.
It takes a lot of will, discipline, courage and help to slay the debt monster. But it can be done. Imagine how much you could put toward retirement if you just didn't have a stinking car payment? This is how the wealthy build their wealth. Debt is really dumb." -- Ramsey
What he preaches seems like simple common sense, but this is not how the majority of Americans are living today. Most Americans have various debt payments (student loans, car debt, credit card debt, etc...) and yet they live lifestyles that consume every penny of their monthly take-home pay as the interest on their debt continues to dig them deeper into a hole. Think about how much money is wasted in interest over a person's lifetime.
Our society is set up to make us think that you are suppose to finance everything, but you have to break out of this cycle if you ever want to truly get ahead. Too many people in this country are consumed with image and appearance. I know lots of people who have no money, but you would think they were loaded by the car they drive and the house they live in. It's an illusion. They don't own anything and most of their monthly income evaporates because they are trying to keep up with the monthly payments of their lifestyles.
If you want to get ahead in this life, you have to be different. You have to get out of debt in order to really start building wealth.