The answer for the majority of Americans appears to be “nothing.” GoBankingRates did a recent survey asking people what they be willing to do to avoid credit card debt: work a job they hated, work multiple jobs, never own a home, give up their car, give up dining out, give up travel, give up marriage, give up children and/or give up entertainment.
The results were a little scary on two fronts.
On the one hand, 11% of Americans would give up having children to avoid credit card debt. Ten percent would give up marriage. And 6% would give up both.
What they wouldn’t do
Those two statistics were the highlight of the article’s clickbait headline, but what concerns me more is the number of people — 51% — who said they wouldn’t take any of the options to avoid credit card debt.
I can definitely understand not working multiple jobs. That’s not feasible, let alone desirable, for everyone. I even understand not being willing to work at a job you hate. Mental health is important.
In addition, you might not be in a position to give up your car, and you shouldn’t have to give up on marriage or kids just to stay out of debt.
So yeah, I get not agreeing to those terms.
More “no” answers
But that 51% also eschewed “stop dining out” and “stop traveling.” Those are pretty big luxuries when it comes to avoiding credit card debt.
I guess I understand that you wouldn’t want to stop broadening your horizons with travel. And who doesn’t love a good meal out? But if it meant not getting into debt, I don’t understand how giving up those things isn’t an option for so many people.
Also worrying, only 8% of people said they’d be willing to never own a home to avoid credit card debt.
You’d think by now that people would have realized that the American dream, especially owning a house, is no longer a guarantee. And certainly not a right — particularly if it means not sinking into plastic debt.
Perhaps people refused to give up homeownership because of rising housing costs in general. To them it may simply makes more sense to lock in your “rent” via a mortgage. But I think it has more to do with the assumption of the American dream than anything else.
What I wouldn’t do
Then again, I ask myself what I would do to avoid credit card debt.
Would I give up homeownership? Not in my case, no. I have a ridiculously low mortgage. Even taking into account the cost of occasional repairs, it’s cheaper than rent in this area.
But if that magically changed and it was credit card debt-with-house or no-debt-but-no-house, I’d choose the latter.
Certainly, I wouldn’t work multiple jobs. That’s probably not a possibility for me unless you count freelancing on the side. Even so, I’m not sure how that’s going to go.
And I wouldn’t give up my car. The transit system in Phoenix just isn’t feasible for me at present. That would mean relying on Uber. It makes me nervous to rely on someone else (even someone on demand) for transportation.
What would I do?
I’d work at a job I hated because I just don’t think work has to rule your life. Also, given the chronic fatigue, there are very few jobs I can do reliably. I can’t afford to be choosy about which ones I take — and anything is better than going back on Social Security Disability. Granted, I’m sure it wouldn’t be great for my mental health, but there are ways of getting around that.
As for the rest…
I can’t have kids, and I’m divorced (and not particularly interested in remarrying), so it’s easy to say that I’d give those up.
It’s a little harder to say unilaterally that I could give up eating out. I’m not always great at impulse control when it comes to food, especially during my (low-level) manic states. But I’d like to think that I could forgo dining out if it really came down to it.
As for travel, well there’s always travel hacking, but if it really were a choice between travel and being debt free, I’d take the latter.
Similarly, I’m sure I could find entertainment hacks, but if it were credit card debt or no entertainment, I’d choose the former. Well, assuming that “entertainment” meant movies and plays and such, not also Netflix and Hulu. If those were included, it’d be a no-go. I’d get a lot more reading done, sure, but I think I’d go stir crazy without anything to watch.
Moderation in all things
Of course, all of these are extreme options. Most people can simply employ moderation and avoid credit card debt. They can eat out less, go to fewer movies, etc.
But moderation just won’t cut it for some people, either because they can’t manage it or because it simply isn’t enough.
With the stagnant wages in this country, a lot of people can’t afford to eat out or get the latest phones. In some cases, folks recognize that and plan accordingly.
But based on the ballooning credit card debt in this country, it seems a lot of people just charge it and hope they’ll figure out how to pay it later.
What are we charging?
Of course, those credit card charges could have more to do with emergencies than iPhones. As recently discussed, a scary number of Americans have less than $1,000 in savings. For them, one or two unexpected expenses could mean pulling out the ole credit card.
In those cases, it’s not an issue of refusing to give up the good life. No, we’re once again looking at stagnant/low wages as one of the biggest culprits of credit card debt. There are people who can (and often do) cut back as much as possible and may still not get ahead — especially not the 28% making less than $25,000 a year.
Those folks probably aren’t traveling or dining out much, but they still run the risk of credit card debt simply because it’s difficult to save much for emergencies on that kind of income.
What does “debt” mean?
Of course, part of the problem in evaluating the survey’s results is that it’s not clear what the study means by its questions. FIrst of all, am I giving up these things forever or just until I’m in a better place financially? And if I refuse to give something up, will I get into a small amount of debt that I’d be able to pay off? Or is it deep debt that’ll follow me around the rest of my life?
I’m honestly not sure what to assume about how long the deprivation has to last. But as for the type of debt, I assumed it was a serious amount that I wouldn’t be able to get out of.
But perhaps some of that 51% that refused to give up anything thought that it was simply temporary debt they could pay off later. Not that that’s the safest assumption. Plenty of people in even a little credit card debt absolutely mean to pay it off. But life circumstances and/or an unwillingness to make the big cuts means they make no headway or perhaps even dig the hole deeper. So it’s probably dangerous to think that any debt is temporary and easy to pay off.
Still, it’d be nice to know the assumptions the respondents had about the proposed debt when evaluating their unwillingness to part with luxuries in life.
Nonchalant or realistic?
Or perhaps it doesn’t matter what their assumptions were. Maybe they were just being realistic.
A life without ever eating out or going to a movie is, by and large, untenable in this day and age. Friends will want to go out to celebrate birthdays. Dates will want to go to the movies. Something will force your hand so that you don’t feel like you can say no.
Rather than try to cut out something as major as entertainment/dining out for good, it’s easier to simply try to create a responsible budget and work within it. If your income is such that there’s anything left over after the bills are paid, you can put it toward any debt or into a bank account against future emergencies.
Really, that’s the best way to stay (or get) out of credit card debt, not forgoing restaurants for the rest of your life.
Would you give up any of these things to stay out of credit card debt?