Ever see a juggling act? Some people will juggle things as simple as tennis balls but have you ever watched a show like America’s Got Talent? They have people juggling knives, chain saws, and bowling balls. Not only that, they usually juggle while blindfolded or balancing on some dangerous platform.
I feel we manage debt the same way. We want something we actually can’t afford so we use a credit card, justify it by claiming “it will build my credit”, and just like that we are juggling a few tennis balls. Not a big deal, we can handle a few tennis balls but we need that new car. Suddenly we are not only juggling tennis balls but someone tosses a knife into the mix.
Now we are juggling a few tennis balls and a knife. We get better at it and we think “I can do this, it’s normal anyway. Everyone juggles like this” but suddenly the dishwasher breaks. This juggle act is about to get even more intense as a running chainsaw is tossed into the mix.
Yet again, we start to get the hang of this juggling act and think to ourselves that this too is a normal way of living. We justify it by claiming it will build our credit, we don’t want the hassle of car repairs, and it’s tiring to wash dishes by hand. Especially after a long day of work.
Here’s my problem with debt, it locks up your income. There are expenses in our lives that we have no choice but to pay. The utilities (water, electricity, trash), the internet, the cell phone, insurance, and rent. I purposely left out a mortgage. These expenses lock up a portion of your income because you have no choice but to pay them.
The average take home pay in America is $4632
If you have a $493 car payment, your take home is now $4139
If you have a $458 personal loan, your take home is now $3681
If you have a $244 credit card payment, your take home is now $3437
If you have a $300 student loan payment, your take home is now $3137
Just in those 4 lines of credit your take home pay has been cut by almost $1500
And we still haven’t subtracted the other MUST have expenses like the utilities, internet, cell phone, insurance, and rent. This can easily be another $2000 off your income. Leaving you with $1137
These are just averages but you can see how challenging it is to juggle debt and maybe you haven’t thought about it like this because it's normal. Everyone lives this way but when you look at your numbers, and you subtract them from your income, how much of your income are you locking up by living this juggling act?
