We’re all supposed to want to keep up with the Kardashians, right? Well, maybe not after all. Who didn’t snicker when Kardashian by marriage Kanye West recently announced that he is $53 million in debt? Although it might be fun to go on a wild spending spree, no one wants to keep up with that large amount of debt.
The 38 year old rapper has been dropping tens of millions of dollars into his fashion label leading to the sea of red ink in which he is swimming. Apparently his high end clothing, including $510 sweat pants, isn’t flying off the racks in sufficient numbers to keep Kanye in the black. That’s some expensive sweating!
Before you get too concerned from Kim K’s hubby, however, let’s look at his situation objectively. He earns an estimated $22-$30 million/year and took in approximately $1 million per concert when he hit the stage. With some smart budgeting and maybe a few extra gigs, Kanye should be back on his feet in no time.
Oh, but golly, he and the missus are trying to put together the perfect mansion for their uniquely named kids. Budgeting might be difficult with this project underway. No expense can be spared for their little darlings’ nest. Why have a regular swimming pool when one the size of a small lake can be put in?
This calls for creative financing to resolve Kanye’s debt crisis. His game plan is to ask for big bucks from Mark Zuckerberg. Why pay off your own debt through blood, sweat and tears when you can get handouts from others? I’d suggest he ask the well-heeled Taylor Swift for some cash,, but I think Kanye torpedoed that financial resource by claiming to be the reason for her success. Taylor was not impressed and would leave a “Blank Space” in the amount of any check she wrote for Mr. West.
While it is amusing to poke fun at Kanye, perhaps we should look in the mirror first before getting so judgmental. Sure, most of us don’t have $53 million in debt, but most Americans are indeed in debt. And, unlike Kanye, we can’t rely on $1 million concert dates to pull us out of the debt pit.
The average American doesn’t have a fashion label like Kanye, but he/she usually has a credit card (or five) in his/her wallet. (Yes, Jennifer Garner, there’s a credit card in the wallet.) And of those credit card carrying Americans, 65% of them carry a balance. The average American between the ages of 18 and 65 has $4,717 of credit card debt. And that’s just the credit card debt! For the average American household, an American adult owes $11,244 in student loans, $8,163 on a car and $70,322 on a mortgage. With the debt fast approaching $100,000 per American adult in an average household, perhaps a better questions is “What’s in your paycheck?” Obviously not enough to pay off the debt.
And how did Americans end up in this sad state of financial affairs? They lack self-discipline. “Don’t” is not in their vocabulary. If they want it, they buy it. If they can’t pay for it out of pocket, they simply take out a loan. Forget how long it may take to repay the loan or even the actual ability to pay for it. (Will I be able to pay of $50,000 in student loans having majored in basket weaving?) Whipping out a credit card or signing on the dotted line of a loan application is an easy way to allow one to enjoy instant gratification. Why drive the old clunker for a bit longer while you save to pay for new car when you can drive a new car off the lot tomorrow with an auto loan?
There’s one American in particular who really needs to be considered. He’s the worst one of all when it comes to debt and self-discipline. I’m talking about, of course, UNCLE SAM. The total public debt as of February 21, 2016 was a whopping $19,047,126,605,778.92. In case you are not a math whiz, that’s a number in the trillions. Uncle Sam doesn’t want you these days since there’s not currently a draft in effect; however, he sure wants your money so he can spend it on some ridiculous project or overpriced item. All Uncle Sam knows how to do is spend, spend, spend. Forget maxing out the public credit card; he can just raise the debt limit if need be.
Debt is a necessary evil. And by that I mean it should only be incurred when necessary. Most individuals cannot pay for college out of their pockets or buy a house with what’s in their savings account. In some instances debt must be incurred. But incurring debt should be a reasoned decision for a worthwhile end. It should not always be Plan A. And when it is incurred, there needs to be a reasonable plan for getting it paid off. Incur debt now and figure out how to pay for it later is not a good plan. Neither is asking Mark Zuckerberg for enough cash to bail you out of financial trouble. It is a recipe for disaster when debt is recklessly or thoughtlessly incurred.
DEBT makes you a DEBTOR, and you DON’T want to be in that position if at all possible. As massive as Kanye’s debt sounds, my bet is on him to pay his debt off before most Americans in general can pay off theirs and before Uncle Sam in particular can pay off his. Yikes! Uncle Sam’s debt is in actuality OURS. Sadly, we’re a society of debtors. All together now, let’s sing (to the tune of “Hi, ho”): We owe, we owe. My how our debt does grow..