Debt, Need, and Desire: The Dark Side of the Personal Finance Industry

I'm working very intentionally to get out of debt, a provoking mission that I see as essential to my happiness and stability, as a single self-employed freelance writer, and to my social justice beliefs. I want to disentangle myself from predatory industries. I do not want to give them my money and work.

I believe I have an out-sized sense of debt and obligation, of what I owe, that probably is rooted in an old-time sense of not having enough. That, too, I want to unravel.

Enough! I live pretty simply, but I've had debt since I signed for my first student loan at age 18. That's nearly half my lifetime ago. It threatens my ability to do what I love -- telling stories -- and live a life with real choices. So, for several years, I have been working a get-out-of-debt plan that my father suggested to me. My parents, my sister, my brother: we're all doing this and cheering each other on as one thing after another gets paid off. I've made some adaptations for my personal situation, and I have a lot of philosophical disagreements with the guy behind the plan, but it is working -- slowly, but truly.

It brings with it an inhale-exhale, the relaxation that comes with a data-driven way of navigating the thorny territory of debt, need, and desire.

Being who I am, I'm also reading a lot about the history of debt, and its conflation with morality, even on a vocabulary level (what we owe, what we're worth, forgive us our debts). I eagerly took up Helaine Olen's Pound Foolish: Exposing the Dark Side of the Personal Finance Industry, which traces the roots of media advising us about money—a subject many find distasteful to discuss in polite company, but nonetheless spawns a billion-dollar industry of products. (The guy whose plan I'm following comes up for critique).

I interviewed Olen about her book for The American Prospect: "Is Suze Orman's Advice Dangerous?"

Olen, a journalist who writes the “Where Life Meets Money” blog at Forbes, questions the “guru” model of personal-finance media, which focuses on changing the money habits of individuals with nearly no analyses of the social and economic reasons for why the gap between rich and poor is expanding beyond belief. She argues that personal-finance journalism can be revolutionary, but is often undercut by conflict-of-interest product sponsorships and simplistic solutions that are less empowering than they are appeasing.

In our interview, Olen spoke about the myths perpetuated by personal-finance gurus like Suze Orman and Jim Cramer, why women are particularly targeted by the industry, and how our personal money problems connect to crushing economic inequities.

Comments

[Ben]

Dave Ramsey might as well be the second coming to several individuals in the conservative world, and I was rather ambivalent towards him, until he started adding some more of his voice to the political arena.

That having been said, my family is experiencing the same thing your extended family is as well. We've made clear conscious efforts to stay away from debt-inducing devices. We only have one credit card in our name that it strictly emergencies only and used once every two years for one large purchase just to keep the credit rating up. We've also managed aggressively pay off one vehicle, and the other has less than $5,000 left to pay off on it. Other than that, the only other debt we carry is our house and one of my education loans (which unfortunately, is rather larger than I would like).

I feel confident about our situation, and only paying for what we need with cash. It's hard though, as the consumerism around us is tempting to get caught up with. We don't go on family vacations to Disney World, our house is always under constant slow-moving DIY and/or small contractor remodeling, and Christmas and other celebrations are small. We're okay with it, and while we might "miss out" on a lot of things other families in our situation are doing, at least we can say we're paying for it as we go; building financed memories isn't in our plans.

Just wanted to let you know there are others out there in our generation trying to so the "right" thing.

[Mike Lindgren]

To my mind much of the personal-wealth counselling industry is flat-out exploitative, aimed as it is at people who do not have much financial sophistication. You don't see investment bankers buying Suze Orman books; there's a reason for that. Come to think of it, you don't see investment bankers buying books at all… in fact, if you're lucky, you don't see investment bankers, period. But anyway, I digress…

[Neo]

FYI - here's a fascinating site by a guy who totally structured his life so as to be financially independent in 5 years, by extreme reduction of expenses and saving 75% of his income. He's a good writer and a clear thinker, and his methods are thoroughly detailed on his website. Not for everyone, but many people could at least find some useful tips here:

http://earlyretirementextreme.com/about-the-blog

[Anna Clark]

Thank you, thank you, for sharing these thoughts, cheers, and redirects.

Ben, it sounds like courage and sense are grounding principles for your family, which is really inspiring. Memories, happily, can be made in so many ways, and the precarity that comes with debt isn't a price that need be paid, as you're revealing.

Mike, you make good sense -- both of the common and humor varieties! :)

Neo, thanks for the link. I love the merging of "DIY ethics" to this money realm...