The Normalization of Debt: How It Happened and Why It’s Keeping You Broke

Here are some not-so-fun facts for you to noodle on: Almost 8 in 10 Americans live paycheck to paycheck.1 And according to a study by Ramsey Solutions, just over half of Americans have had difficulty paying their bills in the past three months, and 1 in 3 have no savings to speak of.

Now, I don’t know about you, but all of this gets me thinking: If we live in the most advanced society in history, why does it seem like we have less time and less money than ever before? Well, I have a theory about what’s causing this mess. And spoiler alert: The financial advice you’ve trusted your whole life is the main culprit.

You see, a lot of us weren’t really taught financial literacy in school or at home. Our main teacher was cultural messaging mixed with a whole lot of monkey see, monkey do. And what did we learn from our parents and ads from credit card companies? That we need other people’s money to achieve what we want in life.

So, when it came time for college, we took on boatloads of student loans as an “investment” in the future—never mind the coming decades of debt and stress. Then we were told a good credit score was crucial for financial success as an adult, so we opened a credit card or two . . . or 10. Pretty soon, we “needed” nicer wheels and tacked on a car loan to the tab. And at Thanksgiving, Uncle Terry wouldn’t let up about how renting is “throwing away” money, so we decided to get a mortgage for Christmas. Why not?

This is how debt becomes normal in our lives and eventually begins to rob us of financial margin and ultimately freedom. And to make matters worse, the financial systems we trusted benefit from our money struggles—meaning they’re more than happy to keep us dependent on debt and asking for more.

Take the credit score, for example. Most of us have been led to believe that a good credit score is a sign you’re doing well financially. But in reality, a high credit score just means you’re crushing it with debt management, not money management. Think about this:
• Why do we want a credit score? To go into debt.
• Why do we want to go into debt? For a higher credit score.
• Why do we want a higher credit score? To have more access to debt.
• Why do we want more access to debt? For a higher credit score.

The only way to achieve and maintain a high credit score is to go into debt, stay in debt, and continually pay your debt accounts “perfectly,” without adding too much debt or paying too much off too soon.

Are you getting the theme here? It’s all about debt. The credit score is just an ingenious way for lenders to profit by luring you deeper into debt while convincing you you’re doing great with money. In fact, according to a FinHealth Spend Report, in 2020 alone, credit card companies made $106 billion off interest. Starting to make sense why they want you hooked on your plastic and obsessed with your credit score?

So, if what we’ve been taught about money is a load of—pardon my French—bologna, then what should we be doing with money? Well, after falling for all the traps, I finally figured out that financial success is about what you have in the bank, not what you owe to the bank. And that when you’re ready to take control of your money and get rid of debt for good, you’ll find margin, peace and joy. I know paying off debt can feel impossible, but data shows that most people can do it in under two years using the proven method I personally used to get out of debt—the debt snowball.

Hear me say this: You’ll never win with money if you hang on to your debt. So, do you want to keep letting debt rob you of freedom and wealth? Or will you do the hard work to take control of the money that’s rightfully yours? If you’re still on the fence, here’s one last question: What could you do if you didn’t have any debt payments?

Answer: Anything you want!

* George Kamel is a Ramsey Personality and personal finance expert. Following Ramsey’s proven money plan, George went from negative net worth to a millionaire in under 10 years. Since 2013, he has served on the Ramsey team, speaking across the country, hosting top-ranked Ramsey Network podcasts, like The Fine Print and Borrowed Future, and frequently co-hosting The Ramsey Show. His goal is to help people spend less, save more, and avoid money traps so they can live a life with more margin, options and freedom. Follow George on Twitter, Instagram, Facebook and YouTube, or online at www.georgekamel.com.