Here’s a few figures about debt.
The average debt per household in America is about $6,000.
The average credit card debt among indebted households is about $16,000.
Nearly 40 percent of homes carry credit card debt.
The average mortgage debt is about $150,000.
And the average outstanding student loan balance is more than $30,000.
Here’s one big frightening figure: The most recent data indicates that, as of March 2016, the current outstanding revolving debt in the United States is $952 billion.
Why so much debt?
Well, generally speaking, people like to spend money they don’t have. They like credit cards, even when they’re paying 15 percent interest. People like to buy things they can’t afford.
What it comes down to is, too many people lack discipline when it comes to money. They spent too freely. Most of us are not brilliant financial planners. There are credit card offers arriving in our mail almost every day, and some of them sound pretty good. And we can argue we’re boosting the economy with our spending habits, because if we stopped spending, the economy would suffer.
But all that debt isn’t pain free. It comes back to haunt us, in many ways. Stress. Ulcers. Anxiety. Arguments. Financial woes are among the top reasons that couples divorce. Debt means you won’t be going on too many vacations (unless you’re charging the whole trip). You won’t be able to donate to worthy causes. You won’t be contributing to the school fundraiser. You won’t be loaning money to help a friend in need.
All theses problems can be avoided if people live within their means. If they spend money they have. If they budget. If they’re disciplined. If they plan for the future. If they teach the benefits of saving instead of spending to their children. If they would learn how to use credit wisely, instead of foolishly. That’s a lot of ifs.
Which leads to why we should all be grateful for and supportive of Junior Achievement.
Junior Achievement of Hawaii was founded in 1957 to educate and inspire young people to value free enterprise, business, and economics to improve the quality of their lives.
The organization, which relies on an army of volunteers, promotes and teaches financial literacy on Kauai. Last year, it carried its message of the ABCs of monetary matters to about 30 classes and 700 K-12 students here. Ivory Lloyd is the district manager of JA Kauai. It’s in its third year on Kauai and, thankfully for our youth, is growing and building a connection between our business and education communities.
Students hear about the very things that impact their financial future — career choices, cost of raising a family, buying a home, buying a car, saving for retirement, investing, college and yes, credit. It encourages an entrepreneurial spirit and innovation that employers and businesses like to see. A long-term goal is to have all students on Kauai, some 10,000, take JA classes. It teaches the hard facts and figures, but it also teaches the intangibles.
Many of Kauai professional leaders bring these literacy lessons into our schools. We hope their words are hitting home. When you’re young, debt just doesn’t sound like a big deal. But it is.
The future of Kauai’s youth will be better off for the efforts of these volunteers. Our youth are our future, and it will be a brighter if they make wise financial decision and avoid red ink.
Now, in case you’re interested, Junior Achievement is looking for help in a few ways. One, donations. It needs money for the materials to carry out and expand its mission. And two, it needs volunteers.
You don’t have to be an investor, accountant or bank president. JA volunteers are given the lesson plan and an outline, and can be matched up with a mentor the first time out. Team teaching with JA is terrific because facing a classroom of 30 high school students can be intimidating. But don’t let that scare you. Your efforts will be welcomed and are needed and the students are respectful, courteous and want to learn.
If you’d like to hear more or volunteer, contact Lloyd at ivory@JAhawaii.org.
Until then, here are a few quotes from some wise people when it comes to debt:
w “Debt can turn a free, happy person into a bitter human being.” — Michael Mihalik
w “If you have debt I’m willing to bet that general clutter is a problem for you too.” — Suze Orman
w “If you think nobody cares if you’re alive, try missing a couple of car payments.” — Earl Wilson
w “Running into debt isn’t so bad. It’s running into creditors that hurts.” — Unknown
“I’m in debt. I am a true American.” — Balki Bartokomous