Americans are awash in debt! The current financial crisis has only forced us to face that fact. As a society we have bought into the concept that more is always better and “things” will cure anything that ails us, and we are quite ill. We have bought more house than we needed, shopped until we dropped, and kept up with the Jones to the point being in debt is almost a way of life.

We have been aided in our desire to feel good by advertisers that have become ever more sophisticated in persuasion. By persuasion I mean : The ability to convince the target to internalize the persuasive argument and adopt this new attitude as a part of their core belief system. You know the type of persuasion I mean, you see it every day: “Buy this car and your neighbors will envy you”; “use this toothpaste and you will be attractive to the opposite sex”, or “Only cool people wear this type of clothing.” It is a mantra that is ever present:

“Buy something and you will feel, look, or smell better.”

It is therefore no wonder that to a great extent we have succumbed to this siren song. In 2008 there were over 176.8 million credit cardholders in the United States, and the typical consumer had an average of 5.4 credit cards. But what has begun to get our attention is that 26 percent of Americans, or over 1 in 4 adults, admit to not paying all of their bills on time, and according to Fitch Ratings, in the first quarter of 2010 the number of credit card defaults hit 11.37 percent, the highest level since a record 11.52 percent in September 2009. And, even more sobering, approximately 14 percent of Americans use 50 percent or more of their available credit on an annual basis. The next generation is no better because nearly twenty-five percent of 18 to 24 year-olds are in some form of “debt hardship,” up from 12 percent in 1989.

The supposedly reasoned thinking of “buy it and you will feel better” has allowed us to become a nation of serial spenders.  We spend and don’t understand any more why we spend as we buy ourselves in to a mountain of debt.But, the truth be told, we have all been there in some form or other and in my next post I will look at why it is so difficult to discuss money matters.