If we track the life of average educated people, the financial script often goes like this:
The child goes to school, graduates, finds a job and soon has some money to spend.
The young adult now can afford to rent an apartment, buy a TV set, new clothes, some furniture and, of course a car. And now bills begin to come in.
One day, the adult meet someone special, sparks fly, they fall in love and get married. For a while, life is blissful because two can live as cheaply as one. They now have two incomes, only one rent to pay, and they can afford to set a few dollars aside to buy the dream of all young couples, their own home.
They find their dream home, pull the money from the savings and use it for a down payment on the house, and they now have a mortgage. Because they have a new house, they need new furnishings, to they find a furniture store that advertises those magic words, “No money down, easy monthly payments”.
Life is wonderful, and they throw a party to have all their friends over to see their new house, new car, new furniture and new toys. They are now deeply in debt for the rest of their lives. Then the first child arrives.
The average, well educated, hardworking couple, after dropping the child off at nursery school, must now put their nose to the grindstone and go to work. They become trapped by the need for job security simply because, on average, they are less than three months away from financial bankruptcy.
From these people, you often hear, “I can’t afford to quit. I have bills to pay.” Or a modification from a song from Snow White and the Seven Dwarfs, “I owe, I owe, so it’s off to work I go.”