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A Lifetime of Debt


Growing up 40 years ago, one of my favorite pastimes was playing The Game of Life, the classic Milton Bradley board game that takes players through their simulated lives - from college to retirement - with make believe jobs, families, and other life-changers all along the way.  It was always a lot fun to play, and it gave me a chance to fantasize a little about what my own real-life future might be like.

The other day I ran across something on the internet that reminded me of The Game of Life... and nearly left me in catatonic state.  The website has developed a shocking parody called The Lifetime of Debt: The Financial Journey of the Average American. This colorful graphic depicts the various junctures in life when most Americans decide to borrow money, how much they typically borrow, and how much they eventually pay in interest.

Wow, what an eye opener.  Just some of the frightening factoids from The Lifetime of Debt:

  • The first payment-based debt (e.g., credit card debt, a car loan, etc.) is now typically incurred by Americans while they are still in high school.
  • The average undergraduate in college has $3,200 in credit card debt; the average graduate student has about $8,600.
  • The average college student amasses about $20,000 in student loan debt toward his/her first degree, and if they get a master's degree that jumps to about $37,000.
  • The average auto loan is now for more than $30,000, a 40 percent increase in the last 10 years.  And two-thirds of American households now own two or more automobiles.
  • The average home mortgage is about $240,000, which, if financed under a 30-year mortgage, means that your house will end up costing more than $580,000 including interest,
  • By the age of 60, the average American has five or more credit cards
  • And finally - drum roll please - over a lifetime, the average American will now pay over $600,000 in interest.  Talk about shock and awe.

It occurs to me that The Lifetime of Debt poster should be made into a text book cover and used on every book in every school from the first grade through college (and even beyond).  I think if more people could see it laid out graphically like that, they might pause for a moment at some of those "debt junctures" in life and think about not taking on debt, or at least taking on less debt, particularly when they can see the lifelong path it's taking them down.

There a lot of different ways to limit debt and even keep it out of your life entirely.  And my fellow frugalista Lynnette Khalfani-Cox (aka "The Money Coach") has great advice for helping you to get out of debt, even if you're in way over your head.

But the bottom line is as simple as this old cheapskate saying:  If you can't afford to pay for it now, you can't afford it.  Stop and think about that often as you play The Game of Life.

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Photo by sarawestermark via Flckr Creative Commons.

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