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How Debt Is Killing the American Dream

3 Minute Read

Americans love debt.

And that’s not just an opinion. It’s a fact.

A recent study by the Pew Charitable Trusts found that 8 out of 10 Americans hold some form of debt. Seven out of 10 believe debt is "necessary." Of the survey respondents, 85% said they use debt to live beyond their means.

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The obsession with debt isn’t biased to any generation either. Around 80% of baby boomers have debt while 47% are still paying off their mortgage. And it’s not uncommon for Gen X’ers to have six digits worth of debt.

These stats, sadly, aren’t all that surprising.

The Illusion of the American Dream

We want stuff we really can’t afford, and debt allows us to get it—and get it quickly. But in reality, debt is just a trap, a shortcut not worth taking. Debt gives the illusion that we’ve reached the American Dream, but since when did the American Dream involve piles of credit card bills, student loans, and car payments?

Related: Have You Said These 6 Things About Your Credit Card Recently?

Our biggest wealth-building tool is our income, and when most of our income is going out in the form of payments, it’s hard to win with money. It’s practically impossible to win with money.

Think about this: According to this study, 80% of baby boomers have some form of debt and nearly half of them still have a mortgage. Their retirement is approaching—if it’s not already here—and they are still left making payments to MasterCard and Wells Fargo. Their "golden years" are practically here but debt is still a major part of their lives. It’s not supposed to be that way!

Find a Better Dream: The Debt-Free Life

So where does that leave us?

It’s more important than ever to realize that living debt-free is the only way to live. If you can avoid debt and spend less than you make, you’re on the track to financial peace.

Even though 80% Americans have debt, that doesn’t mean you should be or have to be one of them.

Related: $1 Million Dollars Later, Peter and Heidi Are Debt-Free

Debt is normal. Be weird.

Becoming debt-free takes hard work—there’s no doubt about it. But nothing compares to the peace of mind and financial success that comes with managing and controlling your money. Here are stories from debt-free families that prove that the sacrifices to becoming debt-free are well worth it.

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