Why are so many high earners in debt?

Entitlement often brings up images of a spoiled child demanding something for nothing, so it doesn’t feel like entitlement when we work hard, earn a good living and want to have the things our culture tells us are the fruits of success. But expectations are so high, for cars, vacations, home renovations, designer fashion, and ever updating technology, that when even an excellent income can’t keep up, a sense of entitlement or expectation to have it anyway, creeps in and debt starts to rise.

Debt has many people working harder and longer, but most people don’t mind. Most high earners enjoy their careers. They also enjoy life; eating out, attending sporting events, cruises, tropical beach holidays, yoga classes, going to the gym, training for a marathon, taking kids back and forth from activities, hobbies, entertaining friends, going to movies, concerts, and plays. Everyone is really busy. Who has time to think about the long term effect of debt? Who even wants to think about debt at all? If everyone is in debt, it can’t be too bad can it? It will all work out, won’t it?

But the hard truth is that interest rates won’t stay low forever. Debt that seems manageable now could become a hardship or worse, it could compromise your financial future.

As a nation we are also modelling unreal expectations for the next generation by acting like it’s possible to have it all without any hard choices or trade-offs. Because most of us know it’s smoke and mirrors. Many people with debt may look lighthearted as they confirm their flight time on their iphone in an upscale restaurant, but as debt mounts so does a quiet dread that often gets pushed aside.

This is not a choice between enjoying life or giving up the perks and pleasures of your hard work and income. Most people with debt are not enjoying life as much as they could. Many people with debt would trade the things they thought they couldn’t live without in exchange for peace-of-mind around finances. The first step in turning things around is being honest with yourself about how much debt you have and what impact it’s having on your financial, physical and emotional health.

Debt is stressful either consciously or unconsciously. It often creates marital and family conflict and is definitely not a necessary side effect of living well. When we don’t have a plan to have our money support our goals, we run the risk of supporting our whims instead.

By Sheila Walkington, Co-founder and CFO Money Coaches

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