The Real Story of Why You Are Broke
For the last century, a new system of feudal enterprise has taken over the American labor market. While many Americans may not find themselves under the patronage of a feudal lord, they do, however, experience a subservience not unlike that of the peasants that worked the fields during feudalism. Those who have consciousness of this modern-day subservience refer to this economic practice as “wage slavery”, but I think the term “economic bondage” fits better.
The term wage slavery seems to imply one’s subservience to a wage, while economic bondage includes ways in which a person is enslaved to the economic systems and structures governing our lives. As much as we don’t like to look at ourselves in these ways, it is undeniably true that many Americans find themselves enchained to debt weighing heavily around their necks.
What is economic bondage?
Economic bondage results from consumers incurring excessive debts and financial obligations based on believing consumer purchases will bring long-term satisfaction. Such choices lead to a greater percentage of the consumer’s monthly income going to interest payments and things they want rather than priorities.
Drowning in Consumer Debt
Seventy percent of the U.S. Gross Domestic Product (GDP) derives from consumer spending, which means corporations have an incentive to reduce the amount of money we save while enticing us to spend more and more of our hard-earned money. Most economists agree that the average American only saves approximately two percent of their annual income with the rest spent on monthly bills, taxes, and consumer goods.
While this 2% average insinuates that a majority of Americans are living within their means if just barely, it also reveals that for a large percentage of the population, debt is a way of life. In order for them to adhere to the template created by a society that promotes the consumer-based life, many feel constantly drawn to incurring debt.
As soon as you turn 18, the prospect of debt seems like a daunting inevitability. The average young adult in the U.S. will leave college owing nearly $39,000 in student loan debt. Many succumb to the fallacy they have to own a brand-new car, taking out a car loan to do so. Most find out soon enough that monthly housing requires a huge chunk of their income. Finally, paying for necessities such as food, a phone, and utilities often leads consumers to constantly use their credit cards to make it month to month because they are overextended. They do not have enough money to pay all the bills they have incurred. At such an early age, our culture can push us to swim in a sea of debt in which we often drown.
The Frustrating Trap of Consumerism
It is undeniably frustrating to work forty to eighty hours a week, only to find yourself with a small sum of money in your pockets after paying your bills and monthly expenses. At times, it appears pointless to work because you never seem to get ahead. You feel like you work only to pay bills or to pay down debt and never to acquire the consumer goods you want to have. You may even end up working absurd amounts of overtime but still seem unable to attain what you want. And all the while, as Americans work to pay down their debt and pay bills, they find themselves more emotionally, mentally, and physically fatigued.
Too many feel trapped, unable to escape the economic bondage in which they find themselves. They struggle to meet their basic standard of living because they have obligated themselves to live a higher consumer-based lifestyle.
Of course, everyone needs housing; a car and a phone seem indispensable, and you need to pay the ever-increasing premium of a health insurance policy that comes with an equally ever-increasing deductible. This leads to stressing over whether you are covered by your insurance each time you feel sick or have to visit a specialist.
All of this, sadly, means that anyone stuck on the hamster wheel of consumption end up acquiring more and more debt. They can even feel hopeless, watching more of their hard-earned money spent on paying interest on loans and credit cards while just making it pay-check-to-paycheck.
The Emotional Toll of Economic Bondage
Such a person who feels economically enslaved can feel like life is meaningless like the world is taking their money and time from them. People who place their self-worth in their possessions might feel hopeless and powerless if what they contribute at work produces no reciprocal results, especially if they feel as though their contributions are rewarded only by more debt and bills. For such consumers, their self-worth is like a bank account: they feel as though those around them and the world are constantly making withdrawals, leaving them to feel they have less.
On the other hand, the more people and the more the world place emotional, economic, and mental deposits or investments in them, the more they feel they have something to contribute.
It is all about this balance. The world will always seem to make withdrawals. The trick is to find ways to ensure you always have something saved within your own emotional and mental account, so you don’t feel economically enslaved and as though life is meaningless.
Shining a Light Under the Hood of Consumerism
How, then, can you free yourself from economic bondage? The answer to this question requires a great deal of discipline.
Every day, you can turn on your smartphone and see people posting pictures of themselves living the good life. We seem constantly bombarded with pretty faces, white teeth, sprawling landscapes, ocean-side views, and pictures of people standing on the balconies of million-dollar condos. These very same people who seem to have a perfect life and to have it all will post on social media and give self-serving lectures about how their visitors, too, can live as they do.
These so-called social media stars tell their viewers how they can free themselves from economic bondage through hard work and the pursuit of more money. But what many people don’t realize is that these people are often “social influencers” hired by companies to promote these companies’ versions of the good life so the viewers will buy their products, putting the consumer in even more debt.
The good life can never be found in an endless pursuit of consumption.
Rather, you will find the good life in the economic stability and security that come with paying down debt and saving.
Saving money is hard, especially when shopping and buying products feel so liberating and good. Who doesn’t want to buy what they want, when they want, and not feel guilty about doing so? Unfortunately, such habits quickly push you into living beyond your means, since you now have reduced your future earnings because of acquiring even more debt. With each impulsive buy, with each product bought for a fleeting moment of happiness, you find yourself more economically enslaved.
The Path to Economic Freedom
Despite the challenges, you can free yourself from these economic chains by following the strategies below that require patience and discipline.
First, you have to decide to reduce your monthly spending, buying only the necessities, while redirecting most of your income toward paying down debt.
Secondly, make up a cash flow sheet so you are always aware of how much money you get each month, how much money is staying in or leaving your account, and to whom and to where it is going. You should always stay “money conscious,” aware of how you spend your money and how your purchases and payments add or take away from your monthly budget.
Becoming financially responsible and empowered means you learn how to see money as a tool to increase your future earnings while ensuring a degree of economic stability. Still, you might just always have some degree of debt, but you can severely reduce how much you accumulate by changing the way you view money along with your spending habits.
Thirdly, having an emergency fund or a rainy-day account can eliminate the need to use credit cards should an unforeseen emergency occurs. An emergency fund means you have three to four months’ worth of wages in a savings account. You can do this by “paying yourself first”, directly depositing 20% of your paycheck into your savings account each pay period.
Lastly, make a list of your “wants” and your “needs” so you know what must be paid monthly or on an annual basis as well as some “wants” you can treat yourself to in the future by saving for it. This may delay your need for instant gratification but in the long run, you will find even greater satisfaction when you discover that this act of delayed gratification results in having more money in your pocket each month.
