"Lemon-Stock”: America’s Investment in Debt Futures
By JoAnneh Nagler on November 28, 2012
When I was a kid we had a phrase for stuff that fell apart, or things we bought that turned out to be no good. “It’s a lemon,” my father would say about a bad used car. “That thing’s a lemon!” my grandmother would say about a new bike that fell apart. And the joke was supposed to be on the person who bought the thing, and we laughed—not so supportively—over their foolishness or, when we had done the buying, our own.
Now, in the middle of our nation’s incredible personal and national debt crisis, we’ve done exactly that. We’ve bought a lemon. We’ve invested in what I like to call “lemon-stock”: a belief that our debt doesn’t really matter, that arguing over it is a political ploy at best, and that we can leverage debt from our own futures—and our kids’ futures—and somehow not be affected.
And because addressing our debt—be it personal or our country’s—is so distasteful, we like to shove it under the rug, blame our politicians for it, or we just tune out on the whole conversation altogether.
But note that our leaders are people—and as people, they tend to reflect the issues our country is having personally. And here’s what we’re doing personally: we’re leveraging everything we can get our hands on to extend our lifestyles beyond what we can reasonably afford, beyond what we can pay back and still live decently.
It’s a sour taste in the mouth to realize that what we’re doing with our personal debt is the same thing many accuse our nation of doing: we’re investing in debt futures. But the price is much bigger than a good laugh over our foolishness. It’s costing us our well-being, our health, our relationships and it’s compromising our families.
But I’m not a proponent of never going out to dinner until we pay off the $48,000 in credit card debt we owe. So let me set the record straight: I do not believe that self-deprivation works. I do not believe that downsizing to the point of pain will ever, ever last.
It’s like a diet: you can hang on for a month or two, maybe three, but not much longer. When we engage in self-deprivation to pay our creditors we often end up withholding from ourselves real, human needs, and that makes us rebellious.
So the skill we need to learn most—no matter what the damage level of our debt—is to learn to live well on the cash we have. That means developing the skill of using our creativity instead of our credit cards. That means learning how to engage in what I call “painless downsizing” so we can have a paid-for vacation; it means learning how to anticipate the normal financial stuff that sets us debtors back—stuff like car repairs and dental work; and it means setting aside money for what’s most meaningful to us. That is, things we want.
Can we do that and still pay back our debts? Yes, we can. But it’s a skill, and we’ve got to learn how. We have to learn to spend proportionally, in relation to what we earn. Go back to the diet idea: the best way to affect healthy weight is to change our eating habits. The best way to change our debting behavior is to downsize where we can, and then live learn to live well on our cash. We set aside money for everything we need, in proportion to our income, and some money for a few of our wants.
And we stop buying “lemon-stock.” We stop buying the sour-taste-in-the-mouth lie that debt futures will help us. They won’t. Leveraging debt now will hurt us later. It always does. A future in debt is a future of worry and angst.
So if we have bought stock in a sour, non-working spending approach, then it behooves us to learn—right now—how to live another way: a way that doesn’t ask us to steal from our own futures. And when we learn to do that, it will not only ease and support our families and our personal life, it will affect us all, for the good, across our nation.
JoAnneh Nagler, Author
The Debt-Free Spending Plan: An Amazingly Simple Way to Take Control of Your Finances Once and For All