The Cost of Being Human

I received dozens of messages on the heels of my recent credit card article. In the post, I highlighted how 46% of credit card holders (approximately 100 million people in America) don't pay off their balance every month. In other words, nearly half of the people who use credit cards carry debt due to the use of said credit cards. This is a pretty shocking statistic considering every single person who uses a credit card claims they never carry a balance.

I have to admit, though, that if 46% of people carry a credit card balance, it means that 54% of people don't carry a credit card balance. If you live in this camp, chances are you're more than happy to throw that fact in my face right about now. I've written about this topic before and podcasted extensively about it, but there's a sneaky little behavioral science quirk that plays a bigger role in our lives than we'd like to admit.

Even if we never pay a single penny of interest or carry a balance from month to month, we're still subject to the psychological consequences of disconnecting the purchase from the payment. When we buy something today that we don't actually pay for until upwards of a month from now, it impairs our decision-making. This is a scientifically proven concept. In fact, studies have shown that we spend 10%-30% more when using a credit card than we would have if we used cash. Further, we're more apt to make purchases that we wouldn't have made at all. Ouch!

Here's an interesting note I received from a blog reader who has successfully managed to use a credit card for many decades without carrying a balance or accruing any interest:

"I always thought I was using our one credit card responsibly because we paid it off every month. That is, until my wise daughter suggested I look at my list of credit card purchases and see how many I would have made if I had to pay cash for them. I realized I made a lot more impulsive purchases when I use a credit card, even though I never carry over a balance from month to month."

This. This right here. She's so, so right. I applaud her humility and vulnerability in this statement. You know how I know it's true? She's human, and we humans have this psychological quirk. That doesn't mean we're dumb or irresponsible......we're human. It doesn't mean we're being reckless or foolish.....we're human.

I'm not mad at people for using credit cards. I don't look down upon them. Yes, people can still be successful when using them. At the same time, my mission here is to open people's eyes to the unseen costs and hidden psychological forces of utilizing this little piece of plastic technology. Nothing is free, as they say.

I, for one, will continue to live a life free from the behavioral and financial consequences of credit cards, and I'd encourage you to do the same. Either way, press on and have a great weekend!

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No Room For Hypocrisy

One of our longtime readers posed an interesting question to me after my recent rant about credit cards. I'll paraphrase her thoughtful question. How can I be so disciplined with budgeting but can't be so with a credit card? In other words, what's preventing me from properly handling credit cards like I handle all the other areas of personal finance?

In short, I have a one-word answer for this: hypocrisy. Hypocrisy prevents me from using credit cards. If I'm publicly and privately criticizing the use of credit cards, warning of the risks, in what world would it make sense for me to use one myself?

Approximately 15 years ago, Sarah and I were at dinner together. When the bill arrived at our table, I whipped out my credit card and slid it into the little black folio. As the waitress walked away with my card, Sarah looked at me and said, "You know you're the world's biggest hypocrite, right?"

Uhhhhhhhh, what?!?! "You tell everyone they shouldn't use a credit card, and here you are using a credit card."

Pot, meet kettle. Ouch. I could use a credit card because I understood the perils, pitfalls, and behavioral science implications. Yet, at the same time, my actions only proved that I was a hypocrite. The moment we got home, I pulled out a pair of scissors and cut up the card. Sarah was right, I was a giant hypocrite. Never again, though. I have no room in my life for hypocrisy, and if I believe in what I teach, I should eat my own cooking.

Can people use credit cards responsibly? Yeah, some can; very few can. A rare minority can. It reminds me of the famous Jeff Goldblum quote from Jurassic Park: "Your scientists were so preoccupied with whether or not they could, they didn't stop to think if they should."

Could vs. should is an interesting topic to think about. There are a lot of things I CAN do, but it doesn't mean I SHOULD do them. If we want to hold people to higher standards, we need to hold ourselves to a higher standard. This has become one of the biggest principles in my coaching. I will NEVER ask someone to do something that I'm not already doing in my own life. When I teach people how to invest, it's exactly how I invest. When I help people get life insurance, it's the exact principle I follow. When I show people how to give, it's exactly how I practice giving. When I teach people how to prepare for their children's college, it's exactly how I think through my own children's education.

I never tell people what to think, but I teach them how to think. Regardless of each family's individual values, beliefs, and aspirations, these concepts and principles allow them to implement wise and thoughtful decisions in their own lives. That begins with building trust, and trust is built on a lack of hypocrisy.

Just because we can, it doesn't mean we should. This applies to so many areas of life, so today I'll let you extrapolate it to wherever it needs to be implemented in your life. Have an awesome day!

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The Oz Next Door

Oh man, I took some HEAT heat after yesterday's post. Yes, some productive feedback, for sure. But the heat was hot. One particular criticism caught my eye:

"You throw around all these statistics, but there's literally not one person in my life who is struggling with credit card debt."

I'm sure you've seen The Wizard of Oz; it's a classic! My favorite scene in the movie is after 93 minutes of being made to believe Oz is so great and powerful, the curtain is pulled back to expose him as a fraud. It turns out he used smoke and mirrors to portray himself as this great and powerful wizard, when the truth was he was a frail old man.

This might come as a shock to some, but you probably have an Oz living next door to you. You probably have an Oz in the cubicle next to you at work. You probably have an Oz in your family. That fancy-looking couple at church? Possibly an Oz. The "rich" person you tend to get jealous of? Possibly an Oz.

In my work, I have the privilege of seeing behind the curtain of hundreds of households. The world sees what it sees, and in many cases, they see a great and powerful wizard. Unfortunately, what's really behind the curtain is a proverbial frail old man.

What appears to be wealth is really debt.

What appears to be freedom is really slavery.

What appears to be success is really destruction.

What appears to be wisdom is really tomfoolery.

What appears to be sturdy is really fragile.

I could tell you story after story after story of wealthy-looking people who appear to be the definition of success, but are on the brink of utter destruction.

I've witnessed so many tears from people who make $500,000+ per year, live in mansions, drive luxury vehicles, have a social media timeline full of exotic travel pictures, and have status in their community.

In many of these cases, credit cards aren't what directly propelled them into a financial spiral. Their car loans, lifestyle creep, and hefty mortgages did the initial damage. However, almost every one of these situations eventually results in brutal credit card debt. The credit cards become the symptoms of destruction, and the boat anchor that prevents the ship from ever floating again. They can always sell a car or a house, but there are only two ways out of credit card debt: grind it out or file for bankruptcy. It's the silent killer that's draining the hopes and dreams of an entire generation.

You absolutely know dozens of people who are deeply impacted by credit card debt; you just don't know which ones. They are hiding behind their curtains, hoping to maintain their appearance of being a great and powerful wizard.

Moral of the story: Never be jealous of the people around us. They might be an Oz. Instead, live with a posture of contentment and humility, pursue meaning, and never allow the desire for more to pollute your peace.

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Just Pay It Off Each Month, They Say

Credit cards are our best friends... until they become our worst enemies. Unfortunately, we never know when that tipping point will come. One minute we're fine, and next our financial life is ruined. I've been on a crusade against credit cards for nearly 15 years, and there's no better topic to stir up the hate train than to discuss my disdain for them.

First, no, I don't use a credit card. I used one from age 18 to 30. Then, after much research about the cold, hard data, the predatory nature of the product, and the behavioral science implications, I drew a line in the sand and decided to permanently ban them from my life.

A quick FAQ:

• What do you use if you don't have a credit card? We use debit cards.

• What about the risk of your card getting stolen? Our cards have been stolen multiple times. It's annoying, but you aren't liable for loss.

• What about travel? You NEED a credit card for travel. I've traveled to more than 30 countries with only a debit card. It works great.

• Don't you need a credit card to book a hotel room? No.

• Don't you need a credit card to rent a car? Some companies, yes; other companies, no.

• You use your debit card for online shopping?!?! Haha, yes. Every single day of my life.

• Don't you want to build credit? No. I haven't had a credit score since 2015.

Here's one of the primary arguments FOR using a credit card (primarily to collect those sweet, sweet points): "Just put everything on a credit card and pay it off every month. Just be responsible!"

The truth is, that's not what people do. In theory, yes, that's a great idea. However, in practice, the data shows something much different. My coaching experience already tells me this is true, but data recently released by the Federal Reserve paints a clearer picture.

• There are currently an estimated 268 million adults living in the United States.

• 81% of those adults, or 217 million people, own a credit card.

• Of the people who own a credit card, 46% (100 million people) carry a balance each month.

"Just put everything on a credit card and pay it off every month. Just be responsible!"

This principle works really, really well......until it doesn't. And today, unfortunately, 100 million adults in the U.S. are (secretly) living in the "until it doesn't" reality. This is ripping families and lives apart!

"Well, it must be the young, irresponsible people who are being stupid with their credit cards."

• The demographic most affected by carrying credit card balances is 45-59-year-olds, with 54% of cardholders carrying a balance from month to month. "Only" 44% of 18-29-year-olds carry a balance.

"Well, if people made more money, they would pay off their credit cards instead of carrying a balance."

• Even in households earning $100,000 or more per year, 38% of cardholders carry a balance from month to month.

Credit cards aren't a math problem; they are a human problem. Credit cards aren't a responsibility problem; they are a psychological problem.

Something to think about today.

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Screwing Up My Own Recipe

Today's post is inspired by one of our readers from Guatemala, who emailed me regarding yesterday's post. Turns out, most of us totally botched the recipe I laid out yesterday. And by most, I'm including myself. In fact, I botched it hard! So hard, in fact, that I ended up being a victim of an out-of-state involuntary relocation because my finances didn't provide the margin for me to make my own choices.

Just in case you all somehow think I'm some financial wiz kid who has always got it right, here are some of the costly decisions I made between the ages of 16 and 27 (i.e., all the ways I violated and brutalized the recipe I laid out in yesterday's post):

• I had my first car loan at age 15. Fifteen! It was a pretty sweet Camaro that I painted Carolina Blue.

• Instead of choosing any number of in-state colleges, I elected to pay 4x as much as necessary to attend an out-of-state school.

• I signed up for my first credit card one month into college, effectively delinking my income from my spending. I never carried a balance, but using a credit card no doubt had a psychological impact on my spending.

• During my second year of college, I sold my reliable, paid-off car and purchased a $19,000 Acura Integra. Very sweet car, but to this day, it's the most expensive car I've ever purchased. Think about that. The car I bought 24 years ago, with a poor college kid's income, was the most expensive car I've ever purchased. Just wow!

• I bought my first house two years after graduating from college. I felt the cultural pressure to move quickly and shoot high, and I certainly met the mark on both.

• My giving was approximately zero. And by zero, I'm not sure it ever even crossed my mind! That young Travis was selfish!

• I kept up with the Jonses the best I could. I didn't know if I would win the race, but I was sure giving it my best effort.

• I used debt for everything, all the way down to my wife's engagement ring. By the time my company shut down and I was involuntarily relocated, my debt had ballooned to $236,000.

• Meaning? What's that?!?! My goal was to make as much money as possible, enjoy said money, and invest the rest effectively so I would have even more money to enjoy later.

In other words, I lived a "normal" life and fell right into the hands of our culture's toxic perspectives. I was the epitome of our modern materialism.

There was always hope for me, and fortunately, I eventually became humble (and humbled!) enough to change. Regardless of where you are or what mistakes you've made (or still making), there's always hope for you, too! It's never too late to make meaningful shifts. A few chapters of your story have already been written, but great books aren't defined by the beginning. In fact, the best stories get progressively better as the adventure unfolds, and your story is no different. Here's to the next chapter!

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Right or Luxury?

As expected, yesterday's post offended a fair number of people. We Americans love our cars, and the mere suggestion that we shouldn't have a car payment sounds as absurd as me suggesting we ought to live our day-to-day lives naked like a bunch of crazy nudists. That suggestion would sound absurd to nearly everyone, and for many reasons, so too is my suggestion that we should all live without vehicle payments.

One of my friends was particularly peeved by my absurdity and decided to call me.

"Travis, do you know how expensive cars are these days?!?! It's practically impossible for most people to buy a new car without getting a loan."

"Yeah, you're right."

"So how do you expect most people to buy a new car without having a payment?"

"I don't."

My friend is absolutely correct! New cars are brutally expensive. Based on recently published data, the average price of a new vehicle during the first half of 2025 was approximately $49,000 (with an average payment of $745/month). Therefore, we have two options: 1) We fork over $49,000 of cash, or 2) We elect for big, fat car payments.

Therefore, my friend makes a good point. It's nearly impossible for most people to buy a new vehicle without large payments. Or.....or.....or, hear me out. Perhaps we can put a third option on the table: 3) Don't buy a new car!

Buying a new vehicle is a luxury, not a right. However, since this is America and our culture is so twisted, we've conditioned the masses to believe that everyone deserves to buy a new vehicle. The truth is, we don't inherently deserve to go out and buy a new vehicle just because everyone else is doing it.

I've never owned a new vehicle in my life, as I don't believe the lie that buying a new vehicle is a right (or a good decision). Even if I could buy a new vehicle, I doubt I ever would. One of the consequences of my decision not to buy a new vehicle is that I haven't had a car loan for more than 17 years. Here's a rough history of all the vehicles Sarah and I have purchased in the past 17 years:

• 2008: Used Honda Accord - $15,000

• 2013: Used Nissan Altima - $16,500

• 2017: Used Toyota Highlander - $15,000

• 2018: Used Nissan Altima - $15,500

• 2024: Used Nissan 350Z - $9,000

Today, our three vehicles have a combined value of $20,000-$25,000.....COMBINED! Would we like to upgrade our vehicles? Of course! And we probably will later this year, but going into debt to do so is an absolute non-starter. We'll buy whatever vehicle we can afford with the cash we have saved for said purchase. Buying new vehicles isn't a right; it's a luxury.

On the flip side, you wouldn't believe the number of people who make $50,000 per year who drive new $50,000 vehicles. The big, fat car payments people are signing up for are crushing their ability to make progress in their financial lives. It's madness!

I again invite you to join the movement. Let's live out a different reality for people to witness. A debt-free reality where we buy vehicles we can afford and live meaningful lives that are far richer than being a slave to our payments. Let's go!

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Normalizing Negligence

You know how social media algorithms have a way of slotting us into specific niches? My niches have evolved over time, but at the moment, my four favorite niches are as follows:

1. Flat Earthers - You GOTTA check it out!

2. Tinned Fish - Who doesn't love a good tinned fish?!?!

3. All things Twenty One Pilots

4. Car Dealership Monthly Payment Interviews

Today, we're paying tribute to category #4, car dealership monthly payment interviews. I first discovered this trend a few years ago, and I'm overjoyed to see it pick up momentum over the last few years. In short, this is a trend where someone working at a car dealership will walk around the premises with a microphone, asking employees what they drive and what their monthly payment is.

Here's one example! If you want the Cliff Notes version, here are the results (each employee’s monthly vehicle payment):

• $744

• $726

• $600

• $1,000

• $935

• $0

• $700

• $0

• $700

• $400

• $415

• $469

• $1,080

• $593

• $0

Or, this one:

• $700

• $1,400

• $750

• $634

• $520

• $706

• $340

• $360

• $0

This one is a treat:

• $2,650

• $1,500

• $700

• $675

• $0

• $1,600

• $0

• $900

• $485

Finally, we'll end with this gem:

• $950

• $730

• $0

• $404

• $0

• $700

• $450

• $600

Those are just four random videos. There are hundreds of them out there, and I just blindly clicked on four for this little exercise. Here's the lay of the land:

• Out of the 41 people surveyed, 80% of them (all but 8) have monthly payments. Translation: Only 20% are debt-free on their vehicles.

• Six people (15%) have monthly payments of $1,000+.

• Only six people (15%) have monthly payments below $500.

• Of the 33 people with monthly payments, the average payment is $791/month.

First, let me say that I'm not condemning any of these people. I don't think they are dumb, nor do I have any negative opinions about them personally. I could easily have clicked on four other random videos and achieved the same results. These people are normal. While these numbers might shock some of you or create skepticism, I can assure you they closely mimic my experience working with hundreds of families.

It's "normal," and that's the problem. In recent months, as the algorithms have pushed me more of these amazing videos, I've started asking myself the question, "Why?" Why are car dealerships doing this at scale? What's the objective of this social media strategy?

Then, it dawned on me, the proverbial light bulb over my head. They are systematically normalizing negligence. If their employees have big, fat monthly payments, and are presumably industry experts, then it normalizes the idea of having big, fat monthly payments. Again, they aren't bad people. They are just normal people, living normal lives, boosting the momentum for other people to live normal lives as well. And in America, "normal" means having big, fat car payments.

Today, I propose we normalize prudence, humility, contentment, and personal responsibility. There's no reason a single person should have a car payment. None. Will you join me in the fight? I can't do it alone, and luckily, I don't have to. Let's shift the momentum to a better way of living!

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Driving Your (or Their) Future

We're sticking on the topic of cars again today, courtesy of an e-mail I received from blog reader Randy. Specifically, Randy pointed out how these modern-day mortgage-sized vehicle payments aren't just a curse to our month-to-month finances, but their impacts compound over time. He's so, so right about that, and his observation reminds me of a story from a few months ago.

I'll set the stage. I was meeting with a 30-year-old couple. They make a good income and live a normal life, but they have an issue. There's not enough margin in their monthly budget to save for retirement. In short, they are fearful that they won't have enough money to retire one day.

Upon reviewing their budget, I confirmed they don't, in fact, have much margin in their month-to-month cashflow. I also confirmed they have zero saved for retirement. Oh yeah, and one other fact: The husband's monthly vehicle payment was approximately $1,200. Curious, I asked them about this glaring number in their budget. The husband told me they've had a vehicle payment in this range since getting married five years ago.....but they can "easily afford it." By the way, this doesn't include the wife's car payment.

I'll summarize:

• A $1,200 vehicle payment is normal to them, as evidenced by having one for at least five years (spanning three different vehicles).

• Their $1,200 vehicle payment is "easily affordable."

• They live month-to-month.

• To date, they haven't had enough margin to save for retirement.

This situation isn't isolated to this couple. Without even realizing it, millions of Americans are putting themselves in a similar situation. To create urgency, I shared a visual with them. What if they stopped the vehicle payment cycle by selling this vehicle, purchasing an affordable vehicle with cash, and began investing that $1,200/month payment?

Here's the math. If this couple invests $1,200/month from age 30 to age 65 and does absolutely nothing else investing-wise, they would end up with approximately $3.5M by age 65. How much work would this require? 10 minutes to set up an investment account and automate it. Then, nothing. Zero work. Zero effort. Zero brain damage. They could lose their login credentials and come back 35 years later to find $3.5M chillin' in their account. Yes, it's that simple. Compounding.

What if instead of investing, we were talking about the compounding impact of generosity? My kids recently participated in a day of service to prepare packages for Meals From the Heartland. This ministry packages and distributes meals all over the world, feeding millions of hungry people. Each serving costs approximately $0.29. $1,200 invested in this initiative would fund 4,100 meals in a single month. Looking at the bigger picture, that's 49,200 meals per year! From age 30 to 65, that's 1.7 MILLION meals. Nearly 2 million meals!!! How many lives is that?!?! You could literally change the world! Compounding.

But yeah, that truck is pretty sweet! It's got heated seats, fancy cameras, a massive engine, and turns all the heads while sitting at the stoplight. People will surely know you're successful now!

Decisions compound. Choose wisely.

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More Trapped Than Ever

I recently had the opportunity to meet up with an old friend. This friendship goes way back to our business school days. I remember our last semester of college when we each received offer letters from two different companies for the same dollar amount: $42,000 per year. I remember how we went out for a drink to celebrate. $42,000?!?! We thought we struck gold. Fast forward a few months, we were both working our respective jobs, and it did, in fact, feel like we struck gold. That felt like so much money to us formerly broke college kids.

20 years have passed since that moment. Today, we're a lot less single, our families have grown, and our black hair is a bit more gray. You know what else has changed? His income. In a recent conversation, he shared that his household income now exceeds $500,000 per year. A half million dollars! That's a far cry from the $42,000 he started making.

Here's where the story gets, er, "good." Knowing what I do for a living, he had a direct question for me (and graciously asked if I would write about it). While he's grateful for his current income, he and his wife struggle to make ends meet with this income. You heard that correctly. $500,000 per year doesn't seem like enough income to care for his family.

Let me re-frame this conversation. He once felt rich making $42,000 per year. Now, making $500,000 per year, he feels broke. Yes, inflation plays a role, but not as much as you'd think. Looking at historical inflation calculator, $42,000 in 2005 is worth approximately $69,000 today. $69,000 is still a mile away from $500,000. Well, it must be the fact he's married with kids. Sure, that plays a role, but an extra adult and a few small humans don't fill a $431,000 per year hole. What else could it be......?

I pointed out a few observations about his current life, such as:

• The mini-mansion he lives in.

• The three high-end cars in his garage (financed, of course).

• The country club he belongs to.

• The infinite spending on dining and entertainment.

• Countless extravagant trips (which get plastered onto social media)

• The massive pool in his backyard.

• The lake house.

• The two boats at said lake house.

His response: "Yeah, we're living our dream life! We have everything we've always wanted."

And yet, he's more trapped than ever. This is the American dream, turned nightmare. This is the path so many people are on. It feels good. It provides adrenaline. Dopamine flows like a river. It seems like a trophy collection of success. But at the end of the day, we're building our own cage, bar by bar.

You might think, "This guy sounds like a real idiot!" The truth is, he's absolutely brilliant. He's a respected leader, a pioneer of sorts. He's accomplished things many may never dream of. Unfortunately, though, he's cursed by being a human. We humans are flawed beings, and materialism is one of those many flaws. He found the world's way early in life, latched on, and never let go.

His mission, if he chooses to accept it, is to get out of the cage he's trapped in. Do you need a similar mission?

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One Sec, Gotta Make My Monthly Burrito Payment

A few days ago, it was announced that Klarna will soon be partnering with DoorDash, offering DoorDash customers the option to spread the expense of their food order over four monthly payments. Yes, you heard that correctly. You'll soon be able to use debt to buy your delivered Chipotle burrito. Don't feel like forking over $20 to fill your belly from the comfort of your own home? That's okay! You can still get your tasty treats for just four easy payments of $4.99.

Seems absurd, doesn't it? Well, that's one way to look at it. The reality, though, is that people have been using debt to pay for their burritos for years. Considering the average household in America carries a $9,000+ credit card balance, we effectively are using debt to fund our cravings. After all, most people are using credit cards for most purchases, and every dollar spent on a tasty treat is one less dollar paid off. It's a continuous cycle, but we mask it by churning charges and payments each month, a never-ending cycle.

While DoorDash offering monthly payments for food purchases seems insane, it's a natural next step for the collective journey we've been on. Debt is not only culturally accepted, but encouraged. From a young age, we're told that using debt is not just okay, but inevitable. It puts a magic wand in the hands of a group of people obsessed with instant gratification.

Want a new car? Wave the wand and sign the papers.

Want a trip to Disney? Wave the wand and swipe the card.

Want a new wardrobe? Wave the wand and sign up for that store card.

And now, want an Arby's roast beef sandwich and curly fries (IYKYK)? Wave the wand and choose payments.

It's that easy! But it shouldn't be. I yearn for a world where we have to think about our decisions, plan for our decisions, and sacrifice for our decisions. A world in which we don't systematically sabotage our own futures at the hands of our impatience and temptations. A world where people will live with margin, freedom, and options. A world where proactivity trumps reactivity.

Will you help me create that world? I don't have the power to bend the culture by myself, but together, collectively, we do!

In the meantime, I'm gonna go get me a Taco Bell Luxe Cravings Box.....and actually pay for it out of my bank account.

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Your Permission Slip

If you ever want to get a zoomed-in look at our modern-day societal depravity, pull up a Dave Ramsey clip on social media and read the comments. Now, I'm no fan of Dave Ramsey, and I'm often critical of pieces of his advice, but the level of vitriol and anger toward his social posts are hard to watch.

Example. I recently stumbled upon a clip where a woman was talking to Dave about getting out of debt. Dave's very clear advice was that this woman and her husband desperately needed to sell their expensive vehicles (paired with expensive payments), buy a few $10,000 cars with cash, and use their newfound monthly margin to aggressively pay off the remaining debt. As someone who does this for a living, I affirm this advice based on the information given by this woman. In all reality, the only rational path out of this debt mess is to humbly sell the fancy vehicles, even more humbly purchase inferior vehicles, and use this significant reset moment as an opportunity to get right with their money.

The commenters disagreed, and right on cue, they offered the angriest of angry responses. In short, most of the feedback revolved around the idea that you can't even find junkers for $10,000. $10,000 will buy a piece of trash car that will leave you stranded in the middle of nowhere any and every day. Translation: a $10,000 vehicle is an absolute pile of crap.

Confession: My family owns three cars, each valued at less than $10,000. They are quality vehicles. They run well. They are reliable. They get the job done. They take us from point A to point B.

No, they aren't fancy. No, they don't have the latest technology. No, they aren't under warranty. No, they won't be issue-free. No, they won't be the coolest car in any parking lot. No, they aren't sexy (well, the 350Z is 19-years-old sports car sexy!).

More importantly, they fit within our budget, provide financial margin, and allow us to spend our money on things that add far more value to our lives. We haven't had a car payment in 16 years, and will never again. We'd rather walk 15 miles, uphill both ways, in a torrential storm, than ever have a car payment again. Thus, we won't.

At the same time, our culture is pushing people into toxic vehicle purchase decisions that are deeply crippling their lives. Parents are doing it to their kids. Neighbors are doing it to their neighbors. Co-workers are doing it to their co-workers. Social media is doing it to all of us. It's everywhere.

Therefore, today, I'm giving you a permission slip. I'm not sure you need it, but today I am giving you permission to drive a vehicle you can afford. Yes, you can live a happy, meaningful, and fulfilling life while driving an affordable vehicle. You don't need to sabotage everything you hold dear in exchange for driving an expensive vehicle. It's not worth it. Please believe that. It's not worth it.

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Oh, I Have Landmines!

Yesterday's post landed hard with many, but one particular response triggered today's piece. "Travis, how did you manage to avoid all the landmines?" It never occurred to me that some people think I speak from a position of having lived a stellar and unblemished financial life. It reminds me that I need to share my early adulthood story again soon. There are so many new readers who don't yet know about my brutal failings. 

Today, I want to share the story of one of my landmines. Surprise, it involves a car! Heading into college, I drove a 13-year-old Honda Civic (with old-school flip-up headlights). I paid $2,000 for that car, and it was shockingly reliable. It wasn't pretty, but it was mine and got the job done (it had a pretty sweet stereo, too!). 

However, before my second year of college, my parents suggested I upgrade my car to more reliably manage my 4-hour drives between home and college. I don't remember disagreeing with this idea, as I think a modest breeze would have pushed me over the edge to purchase a cooler car. Thus, the car shopping began. 

Almost any car would have been better than my existing car. At that point, it was probably worth $500-$1,000 and had a ton of miles on it. My options were unlimited! Wanna know what I landed on? I purchased a 2-year-old Acura Integra. Black with black leather, stick shift, fully loaded. It was so awesome! Oh yeah, and it cost $19,000. I don't think thatnumber does my stupidity justice. Adjusting for inflation, that's the equivalent of an 19-year-old buying a $40,000 car today. Wow, just wow. I, of course, didn't have the money for this purchase…..I was a broke college kid with little cash. That's the moment the destructive debt cycle started to churn in my life. In making that purchase, I signed up for years of monthly payments that I needed to make via an on-campus job. I was going to work anyway, but in hindsight, there were lots of things I would rather have spent that money on. 

That single decision set the table for what would eventually be dozens of terrible decisions....more landmines. After all, stepping on one landmine makes us more susceptible to stepping on another. 

The question to answer today is how to reverse the landmine cycle. Here's what I did:

• First, realize you stepped on one. We can't fix what don't know is broken. It took me years to realize I screwed up…..but better late than never. 

• Second, commit to avoiding these types of future landmines at all costs. For me, that meant deciding I would NEVER use debt to buy a car again....ever.

• Third, we must pay the price to actually heal the damage. In my case, that meant paying off the car and subsequently saving up cash to eventually buy a different vehicle. Further, I needed to humble myself and eventually downgrade cars. The following car I bought was a $10,000 Honda Accord….with cash. 

That entire mess took 8 years to clean up, but it's a landmine I will never step on again. It's ok if you've screwed up, but it's time to clean up the mess and move on. Trust me, it's beautiful on the other side.

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(Unknowingly) Walking Into the Abyss

"How do people afford houses in this crazy market? Do this many people really make that much money?" This is a question I received from a friend last night, courtesy of her mom, Leslie. Thanks, Leslie, for this fantastic topic!

In short, people can't afford them, and no, they don't make that much money. Some can, and some do, but not most. In my work with hundreds of families and watching the data closely, a few other factors are at play.

First, I'll start with what a healthy home ownership situation looks like. Ideally, a family's house payment would cost less than 25% of their take-home income. When that happens, there's enough margin to pay for needs, enjoy some wants, give, save, and invest for the future. There's a balance in the force.

However, with the combination of higher interest rates and increased prices, today's housing market has posed a different dynamic for families. Instead of house payments absorbing 25% of take-home incomes, people are commonly buying houses with corresponding payments at 40%-60% of their take-home income.

When this happens, something has to give. Families aren't going to stop eating food. And they aren't going to completely stop buying wants. Typically, giving is the first thing to go. Sorry, gotta take care of me first! Next, retirement investing gets kicked down the road. After all, retirement isn't for a looooong time....it will have to wait. Then finally, saving gets pulled back. We'll address those future needs when the time comes.

This approach works.....for a while. Eventually, though, other things pop up. The car has issues. The kid breaks an arm. The A/C blows up. The dog eats a screwdriver. But there's not much margin in the budget and little-to-no savings for these types of situations. Out comes the credit card. Then it happens again a few months later. Then again in six months. Every so often, the credit card absorbs the extra costs. Then it's time to buy a new vehicle and there's no money saved. A new car payment!

But people can't just perpetually use debt to keep the train on the tracks, right? Well, yes and no. Eventually, the credit cards feel too heavy. That's when a little psychological hack comes into play. We'll get a HELOC on our house to "pay off the debt." The credit card debt has been shifted to the HELOC, which allows us to start using the cards again. And the cycle slowly repeats for decades.

There's no such thing as a free lunch, though. This is where it gets scary. Without knowing it, people are walking into the financial abyss. Baby Boomers and the Silent Generation grew up in an era with retirement pensions. Most knew a reliable retirement income would await them at a certain point in life. This system has drastically shifted, beginning with Gen X. Traditional pensions are much rarer, and most of us are now responsible for funding our own retirement.

As such, millions of Americans are walking into the abyss as we speak. They are busy living their lives, enjoying their lifestyles, and slowly building debt while not building retirement investments, not knowing the future looks very murky. They've already lost, but won't realize it until it's too late.

If I'm honest, these are the saddest situations to be invited into. There's nothing harder to watch than a couple realizing they have unknowingly walked into the abyss all these years, only to just now see the consequences of their unintended reality.

Does this resonate with you? If so, perhaps it's time to shift gears.....fast! Give a gift to your future self; you don't have to walk into the abyss.

To be continued....

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Solving Problems With Problems

One of my friends asked to meet with me. He wanted to get a second opinion about something financial-related. Here's the situation. For the first time in nearly 15 years, his wife's car was paid off. They owned it free and clear and finally got on the other side of the monthly payment cycle now that their $500/month payment is no longer. That's great news! HOWEVER, they have a problem. In the past few months, his wife's car had to be taken into the shop twice. The total cost? $700.

Here was his question to me: "Would it be a good idea to get her a new vehicle?"

"Absolutely not!" I responded.

"Why not? You think we should just keep dumping money into this vehicle?"

"Dumping money? Paying $700 to get your car fixed is $300 less than you would have spent on car payments over the last few months."

"Well, we already bought her a new vehicle. It will definitely be more reliable."

"..........."

Turn out, he didn't want my guidance.....he wanted me to affirm the decision they had already made. In short, freaked out by two vehicle repairs totaling $700, they quickly decided to "fix" the problem by buying a brand-new vehicle. The kicker? Their new payment is $900 per month.

Please allow me to summarize. This family finally gets free from their $500/month car payment cycle, experiences $700 of maintenance expenses, and in their attempt to lower their costs, commit themselves to $900/month for the next 72 months. On top of that, due to their increased financial commitments, they decided his wife needs to go from part-time to full-time at her job. Further, they wonder if they should forego their annual summer vacation to cut costs.

If this sounds crazy to you, good. If this sounds far-fetched to you, you'd be mistaken. This is a very typical sequence of events in our modern culture. My friend isn't alone....far from it. In fact, many people's immediate reaction to this post will be to side with the husband. "He's just making sure his family is safe." "They'll save money in the long run." "They didn't have a choice."

They did solve the small reliability problem, but at what cost? They've largely prevented ongoing vehicle maintenance costs; all they had to give up was their freedom and memories. I'm all for solving problems, but not when it creates bigger problems.

I have maximum empathy for this family. I love them. I care for them. I desire for them to have better. I shared some insights and ideas, and in turn, they said I should share this story on the blog. Tomorrow's post will dive deeper into one of my ideas.

I hope you solve some of your problems this week, but along the way, be sure not to create newer, bigger problems in the process.

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First, Stop the Bleeding

Debt continues to crush our society. Across the board, debt levels continue to rise. Record high credit card debt. Record high auto loan debt. Record high student loan debt. The pendulum has swung toward more debt.....and it's not swinging back. As I see this play out in the lives of families, I'm literally watching this debt erode people's lives from the inside-out. Constant tension. Marriages lost. Stuck in jobs. No saving for the future. Using more debt to keep the train on the track. Modeling bad behavior for kids. Watching the cycle repeat in the next generation.

Millions of families have conceded defeat, willingly subjecting themselves to the turmoil and suffering caused by this destructive cycle. Some, though, desperately want out. They recognize there is a better reality, a different way of living. They know it's possible, but despite best efforts, they can't seem to claw their way to the other side.

I always share three promises with anyone interested in getting out of debt:

1) It's really simple

2) It's really hard

3) It's worth it far more than you could ever imagine

For many, it seems like every time they make progress, regression pushes them back to where they started.....or worse. This is primarily because they failed to execute the initial and crucial step: First, stop the bleeding! Let's use an analogy. You're sitting in a canoe and notice a bunch of water at your feet. Concerned by this development, you start to shovel water out. But no matter how fast or how much you shovel, the water line keeps rising. It's because you didn't plug the hole. You didn't stop the bleeding.

This is why so many people struggle with debt. They try to pay it off without first stopping the bleeding. They keep their credit cards open. They're still willing to sign the dotted lines for more student loan debt. They're open to using debt for their next vehicle. I promise you, if debt is an option, it WILL be used. Even while paying off debt, you'll find yourself sabotaging yourself along the way.

Well, what's the alternative? If we truly want to get on the other side of the debt, we need to resolve to NEVER let debt be an option.....ever. No more car loans. No more student loans. Close the credit cards. Stop the bleeding! Draw a hard line in the sand and be stubbornly unwilling to cross it. Then, and only then, can we move the needle and finally get on the other side of debt like we deserve.

This is a very controversial and counter-cultural idea. I get it. I've been on both sides of this in my own life, and have coached hundreds of people through it in their journeys. Armed with that experience and insight, I promise you that not only is it possible, but it's amazing!

If this speaks to you, perhaps this needs to be a mission in 2025. Maybe someone in your life needs to hear this; encourage them! This is the year! Draw the line, cross it, never go back.

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Opening Eyes, Escaping Traps

I'm going to start today's post with a correction. In yesterday's piece, I shared the story of a young couple who wanted to buy a car without debt. I explained how they planned to buy a $20,000 car by saving $500/month for 20 months. Blog reader Ryan pointed out an error, as $500 x 20 = only $10,000. That was a fat finger on my part. This couple planned to save $1,000/month for 20 months. It required them to significantly pare back their budget and sacrifice, but they did it and paid cash! **I’ve since corrected this error on the website.

On the heels of yesterday's post, I received some expected pushback. Specifically, I was accused of exaggerating the monthly car payment this couple would need if they decided to buy a new car. The exact words were, "A $580 car payment seems over the top. That doesn't even seem like a realistic number. Car payments aren't that high."

One of my favorite aspects of my podcasting and blogging is the opportunity to share a broader perspective with people. Understandably, most people's context regarding many of these topics is singular: theirs. They know their life, and it's hard to see things through the lens of other people's situations. That's why some people think our economy is fantastic, and others believe it's trash. We don't know what we don't know. We see the world through our one-of-one reality.

I'm grateful that in my work, I get to walk alongside hundreds of people and try to put myself in their shoes. With that preface in mind, back to the car payment. Some see a $580 car payment and think that sounds outrageous. I see a $580 car payment and now think to myself, "Oh, theirs isn't so bad." I remember when I saw my first $1,000 car payment. It was startling. Now, I expect it. Further, I now regularly see $1,500 car payments. It's bonkers!

I often get accused of beating this car topic into the ground......guilty as charged! I believe cars are the single biggestcontributor to our modern-day financial struggles. Our cars are literally killing our finances. Here are a few stats to show where we're at (second quarter 2024 data):

• The average new car loan is now $41,000

• The average new car loan term is 68 months (more than 5.5 years)

• The average new car loan interest rate is 6.8%

• The average new car loan payment is $734/month!!!!

• The average new car insurance payment is $194/month!!

• That means, on average, the monthly cost for a new vehicle in America is $928/month.

It's an epidemic, but it gets worse. Since cars depreciate in value by about 15% per year, and we're extending the loan terms out longer and longer, nearly 1/4 of vehicle trade-ins have negative equity (meaning people owed more on the car than it was worth). This causes people to perpetually borrow more than their newly purchased car even costs.

This trap is killing millions of families! At least 25% of people reading this are probably experiencing high monthly car payments. The opportunity cost of those payments is tremendous, and I have enormous empathy for everyone in that situation.

But we don't have to play these games! It's 100% possible to escape the car loan debt cycle. It takes sacrifice, humility, persistence, and dedication. But you can absolutely do it!

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They Ate the Elephant

A young couple scheduled a coaching consultation with me. They had questions. They needed wisdom. Here was their dilemma: They needed to buy a replacement vehicle soon, but they didn't have any money. Everyone in their lives told them to get a car loan. Their parents told them. Their friends told them. Their co-workers told them. Their neighbors told them. The cultural undercurrent was clear: they should just get a big car loan and quickly buy the vehicle they want. Yet, all the while, this idea didn't sit well with them. They had this wild inclination that a big, fat car payment would somehow hinder their ability to live a free and meaningful life. Thus, they scheduled a meeting with me.

The car they were considering cost $35,000 (new). A six-year loan would cost around $580/month. This felt heavy, and understandably so. My first question was why that particular vehicle. They talked about reliability, longevity, and common practice. After reading some reviews and discussing alternative options, we concluded we could find a suitable alternative in the $20,000 range. It was a different model, slightly used, with some miles on it. That step alone was a game-changer.

Next, we needed to figure out how to pay for it. They could easily go to the bank and get a loan, but they wanted to avoid debt (and perpetual payments) if possible. They had very little cash, so $20,000 still seemed unattainable. There's an expression that goes something like this: "There's only one way to eat an elephant: one bite at a time." Thus, we needed a plan. Given their existing car situation, we decided they could push this decision off for upwards of two years. Therefore, they set a plan to pare down their budget and save $1,000/month for 20 months. If they could do that, they would have enough cash set aside within two years to buy the vehicle.

This still felt insurmountable, but they were crazy enough to try. It took intentionality and persistence, but they ended up doing it in 19 months. $20,000 of cash in hand! They eventually decided to save for a few more months and ended up with about $22,000.

You know what they did next? They did exactly what everyone else told them they shouldn't do. They paid cash for a car. A car they could afford. A car that would suit their needs while also allowing them to live a free life. They ate the elephant!

Don't fall for the trap. There are better ways to live out our finances. Harder ways, but better ways. Patience. Delayed gratification. Humility. This young couple is so glad they took the path less traveled. They are living for meaning first, and it's a joy to watch. You deserve the same!

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Beware the Shadow Side

I spent some time with a friend a few nights ago. He and his wife have some house projects that NEED to be completed. It's a need need. You know, the type of things that don't get advertised when home ownership is overly glorified in our culture. These are some serious projects that require serious attention.....and perhaps a bit of urgency. One problem: They don't have enough cash handy to quickly execute. They could save for it, and they would love that option, but the timing isn't conducive to that judicious plan.

The option we discussed is a HELOC (home equity line of credit). They have a TON of equity in their house, so this feels like a feasible option for them. While I'm never a fan of going into debt, this seems like the lesser of all evils. It also makes me feel better knowing they are using the money to reinvest back into their home, not buying a boat (or some other depreciating asset)

After discussing the mechanics of how it would work and whether it could be a viable option for them, he asked the question I was dying to answer: "What's the shadow side of using a HELOC?" He knows me well, and he knows I'm constantly thinking about the behavioral science of things. In short, there are three psychological traps to using a HELOC:

1. Since HELOCS mechanically operate much like credit cards and have much lower interest rates, having a large HELOC credit line can be a slippery slope. If they need $15,000 for a project, but the available line is $40,000, that extra $25,000 could be spoken for real quick!

2. Adding fuel to the psychological fire, they are essentially borrowing from themselves. Well, their future selves. This is their equity, after all. They are just accessing it now, long before the property gets sold. Knowing this is their money (instead of the bank's) can wreak psychological havoc on one's decision-making.

3. Since HELOCs typically only require interest-only payments, there's no forced principal paydown. Unless intentionally done so, the loan will never get repaid, and the borrower will perpetually pay interest on it (i.e. it feels better and easier to not pay it down than the alternative).

We had a great chat, and I think he's looking at it the right way. More than anything, I'm glad he's taking his time, assessing it from all angles, bringing in outside input, and considering the shadow psychological factors that may be at play. That tells me he'll likely be ready to approach it with prudence, wisdom, and caution.

Each time you make a financial decision, consider the shadow side. What psychological factors might be at play, and how will you combat them? We can't eliminate them, but if we are aware, humble, and intentional, we can overcome them.

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When NOT to Push the Button

Yesterday, I talked about the behavioral phenomenon where people find more perceived security in their cash than the actual relief gained from using said cash to pay off their debt. I first framed it up through my illustrative Saw-esque concept, but then shared the story of an actual family that's continually struggled for seven years with $47,000 of debt (and a hefty $1,300/month combined payment to go along with it). All the while, they were sitting on $60,000 of cash in savings. At any point on the journey, they could have "pressed the button" and instantly paid off the debt (leaving them with $13,000 in savings and $1,300/month extra in their budget).

I said it without saying it, but I think we should push the button! Contrary to common belief, actual relief is almost always superior to the false sense of security of our cash. In the name of having "security," this family lived a stressed and low-quality life for the better part of a decade. The alternative scenario would have provided much fruit. Pay off the debt, use the additional monthly cashflow to rebuild savings (to whatever extent needed), and live with far more margin.

Today, though, I want to share when NOT to push the button. For as strongly as I feel about pushing the button, I'm equally as passionate about NOT pushing the button under one specific scenario: When the behavior that caused the financial mess in the first place hasn't yet been corrected.

In yesterday's example, this couple deeply wanted to create freedom and gain momentum. They made some very poor choices many years ago and were still haunted by them. They have since gained a healthier perspective on money, started budgeting, and found unity in their finances. In other words, they have addressed the root cause of the initial problem.

Let's assume they hadn't. Imagine this same couple came to me with $47,000 of non-mortgage debt, $60,000 of cash, and perpetually bad habits. They aren't budgeting. They still find themselves dipping into their credit cards each month. They plan to use debt to buy their next car. They haven't been sitting on $47,000 for a long time, but that number continues to grow and will likely be higher in the coming months.

In that scenario, using the cash to pay off the debt would be utterly destructive. Doing so would immediately create relief, but also cause a false sense of accomplishment. They would let their guard down, feel progressively more comfortable to spend, and mimic the same habits that led them into this mess. Translation: They will recreate the same situation they just "fixed." Fast forward 18 months, and they are back to $40,000-$50,000 of debt AND have no cash. That's a worst-case scenario I've seen played out far too many times.

Therefore, push the button. Please push the button! However, before doing so, make sure you have a healthy perspective, solid habits, and intentionality. Let the button be a blessing, not a curse.

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To Press or Not to Press (the Button)

I want to start with a little thought experiment. Think of it as my PG-rated version of Saw. You're forced live your life carrying a 20-pound backpack on your shoulders. It's not impossible, but it doesn't feel great. You constantly feel the weight, and it's uncomfortable. It doesn't prevent you from living, but it's less than ideal. No single moment causes acute physical pain, but the cumulative impact of wearing it starts taking a toll. The whole time, however, you have the option of removing the weight forever. All that's required is you push a button on your kitchen counter. The moment you push the button, the weight disappears. Instant relief! There's one small catch: You can only press the button once. Would you press the button?

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A couple walks into my office, struggling with debt. They are beaten down and frustrated. They look tired. Here's what their situation looked like:

• Student Loan Debt: $22,000 (with a $580 minimum payment)

• Car Loan: $15,000 (with a $520 minimum payment)

• Credit Card: $10,000 (with a $200 minimum payment)

Additional context:

• These are private student loans

• The car has negative equity, meaning they would still owe money even if they sold it.

• They've been roughly in this same spot for their entire 7-year marriage.

After factoring in these three minimum payments totaling $1,300, they have very little margin in their monthly budget. It's tight! They make it work most months, and are doing alright, but they feel the constant weight and tension. Month after month, year after year, they experience the cumulative impact of this weight. It's nothing acute, but it's starting to feel exhausting. They haven't gone deeper into debt in years but haven't found a way to make progress on it, either. Continually seeing this debt hover around $47,000 is taking a toll.

If only they had a button to push! Well, they do, actually! Here's one detail I haven't shared with you: They have about $60,000 in a savings account. "Have you considered using some of your cash to pay off the debt, which would free up $1,300/month in your budget?" I asked them. Like many people before them, they gave me the answer I prayed wasn't coming. "We can't use that cash. That's our security."

"Security?!?! You don't have any security. You're already drowning!!" I was probably sharper than I should have been, but I needed them to realize how badly they were already hurting. They could immediately pay off all $47,000 of debt and still have $13,000 of cash left.

They aren't alone in this sentiment; it's all too common! The perceived sense of security always emotionally outweighs the benefit of actual relief. This is one area where our psychology tricks us. I'm going to flip this on its head....here's what I believe to be the truth: Actual relief always outweighs our false sense of security. They could press the button, but continually choose not to.

Not all people have these buttons to push, but many do. And with that choice, many choose to continually suffer, all in the name of "security."

Would you press that button?

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