Do you remember growing up and being asked, “Can’t you just be normal?” Usually, this was because we were doing something silly, embarrassing our older sisters in front of their friends, or just annoying her. As kids, being normal was probably a good thing, but as adults, being normal with our finances is not good.
Normal Has Debt
About 8 out of 10 Americans have debt. It doesn’t matter if you are a Baby Boomer, Gen Xer, or Millennial. About 80% of people in each generational group has debt. US households started 2019 with $13.5 trillion of debt. Americans are paying over $113 billion in credit card interest and fees. If you have a mortgage, a vehicle loan, student loans, and credit card debt, you could be paying $5,000 – $10,000 or more in interest every year! That is what we consider normal. Do you know what you could afford if you didn’t have to pay that amount of interest each year? Or do you know how much wealth you could have if you saved that amount each year?
The average student loan balance per borrower is $36,500. The average vehicle loan is $10,000, and the average credit card and revolving loan debt is $5,800 per borrower. You have to apply large monthly payments to these balances in order to pay them off any time soon. Most people cannot do this, and it causes them to stop trying to pay them off. They take on more debt because that’s normal for them.
Normal Has Little Saved
About half of American households have NOTHING saved for retirement. Granted, some of those households will have a pension, but around 29% of households age 55 and older do not have retirement savings or a pension. Four in 10 adults could not come up with $400 for an emergency unless they borrowed money or sold items, and 60% have less than $1,000 saved. No matter how you look at it, Americans are behind on saving for emergencies and retirement. Being normal means you have nothing saved.
Normal has Low Net Worth
Besides not having anything saved, 15%-20% of Americans have a negative net worth. They have more debt than they have assets. They don’t even have a paid-off house they can sell to support themselves in retirement! The median net worth in America is about $100,000. This means that half of America has less than a $100,000 net worth. Normal is not having enough assets to support yourself in retirement so you can do the things you want to do.
Where do you rank? If you are in your fifties and have no pension, you better get a plan together for how you are going to support yourself in retirement. The sooner you start investing, the better chance you have to build wealth. But you cannot invest when all your income goes to debt every month for the rest of your life.
Normal is Living Paycheck to Paycheck
Living paycheck to paycheck means that you spend all your money each month. There is nothing left to save because the money gets spent. If you miss a paycheck or your paycheck is reduced, you have an issue paying your monthly bills. Living like this is stressful! Almost 80% of America lives like this. Some of those people live worse than paycheck to paycheck since they spend more than they take home each month. Normal is spending all of your money each month.
You Don’t Have to be Normal
Living paycheck to paycheck, wondering how your debt will get paid off, and not saving money is normal for too many Americans. It is stressful living like this, not knowing if you will have enough to pay your bills and debts or if you will ever get ahead. If you have been in this situation for far too long, you need to get some help. You do not have to stay in your current financial situation, but if you don’t change anything nothing will change.
Why do you want to be normal when normal is having debt and not having enough retirement funds and living paycheck to paycheck? This isn’t how you enjoy your life! It’s stressful! It isn’t how you build wealth. Get on a plan to build wealth. Go crazy on your debt and quit being normal.