Basic Needs are Killing Us

When asked why most people are so deeply in debt, many respond that it is the luxuries we allow ourselves to buy that is hurting us. It is those new cars, new clothes, stereo systems, etc, that are putting us in the hole. It is our insatiable quest to keep up with the Jones’, whoever they are, that hurts us.

Not so says a recent Survey of Consumer Finances from the Federal Reserve Board. It is actually rising costs of the most basic of needs that is actually what we are spending our hard earned money on. Increasing debt can be linked to the rising costs of education, health care, and housing, which over the past 5 years have risen 11.2 percent. Meanwhile, incomes have not risen as steadily, leaving a very important gap which is being filled by an increasing mound of debt.

Rising costs of houses over the past year has had a large impact on debt. Many families are now borrowing against their homes to pay for other debt, thereby increasing the amount of secured money they owe. Education has become so important that many families are getting into and staying in debt just to keep a house in a good school district. The government worries that this is just too high a price for education.   ■