A Society Of Negative Balance!
I was shocked when I knew that at least 40% of Americans cannot come up with 400 dollars in the case of an emergency. That's unbelievable, and if that's the number of people who cannot come up with 400 dollars in a case of an emergency in the US which is supposedly one of the richest countries in the world, then I can only assume this percentage will be much higher in other countries.
It means 40% of Americans are vulnerable to the simplest unfortunate event, but does it only mean they have a positive balance of less than 400 dollars? Absolutely not! At least 95% of them are in debt, whether it be a loan, a mortgage, or a credit card debt.
It's an absolute disaster that we've become societies of negative balance, it seems like everyone spends more than they make, buy what they can't afford, and they constantly struggle to make ends meet. How stressful do you think that is?
10 years ago, at least in my country: Egypt, only an apartment or a car could be bought on credit, there was nothing like buying a mobile phone or even booking a trip on credit. I'm sure there were credit cards but I'm talking about the consumer's behavior, only such a huge purchase needed credit. Now, you can virtually pay for any product or service on credit, which means our desire to own things we can't afford only grew.
We're buying things we don't need to impress people we don't like, and the result is: we live in constant financial distress.
We expose ourselves to financial vulnerability and as soon as an economic crisis hit, these people will resort to high-interest loans, sell assets, and go without necessary good and services. It might take them years to recover, and they also might never!
Living paycheck to paycheck is dangerous, and we all have seen what happened during the pandemic when many people lost their jobs and had no sources of income.
Financial education is super important because it's not only a matter of becoming wealthy, sometimes it's a matter of survival. What's more important is the discipline to control our desires, to choose not to buy things even when we're fully able to. The goal is not to be stingy but to live a more financially secure life.
Always remember what Warren Buffet said:
"If you buy things you don't need, soon you will have to sell things you need"
This principle will forever be true, and it happened to me every single time I made unnecessary purchases.
You and your family deserve to live a financially secure life, without fear of tomorrow. So, spend wisely!