Theres a narrative floating around right now that if inflation would cool off and if prices would finally come down, Americans would be back on solid financial footing.
I dont buy it. Not at all.
Because heres the . Even if prices dropped tomorrow, a lot of Americans would still be going broke.
And its not just about the economy.
Its about our instant gratification behavior.
The Blame Game Is Getting Old
Weve spent the last few years pointing fingers at:
And yes, prices did go up. A lot.
But at some point, we must take a step back and ask a :
If money is so tight, then why does it look like nobody got the memo?
A Reality Check From Life
Im not looking at spreadsheets here. Im looking at whats actually happening on the ground with my own two eyes.
Recently, Ive gone out to multiple high-end restaurants, traveled through packed airports, and attended concerts and live shows and heres what I saw.
Every single one of them was full.
Not half full. Not struggling. Packed.
Thats not the behavior of a scared or worried consumer. Thats the behavior of a consumer who is still very comfortable spending and doesnt really believe they are going to hit hard times.
The Spending Addiction Nobody Wants to Admit
Heres where this gets real. We dont just have an in America.
We have a spending discipline problem.
People are still:
And then turning around and saying to themselves, “I cant get ahead because everything is so expensive and the Government needs to fix the problem.” Thats only part of the story.
We Forgot The Pay Yourself First Rule
The real issue isnt just rising prices. Its that, as incomes have gone up even modestly, so have lifestyles and people forgot the cardinal rule of saving money off the top and then spend whats leftover. Weve reverse engineered it to spend first and then maybe save if there is something left over.
Weve normalized instead of basic trips. Weve converted to dining out three to four times per week instead of cooking at home. Weve added convenience like taking Ubers, doing Doordash, or needing access to a club for comfort over cost at every turn of our lives.
And we justify it because “We deserve it, we dont know if there will be another COVID, or everyone seems to be doing it, so why shouldnt I do it?”Â
Maybe we do. But we also must be able to afford it, which is why credit card debt and overall debt is at an all-time high. Our leaders are doing it in Washington, and we are doing it on main street.  Two wrongs dont make a right.
The Credit Card Illusion
Heres whats really fueling this disconnect. Debt. The kind of debt thats like having saturated fat in your diet. You know how they tell you there is good cholesterol and bad cholesterol? Well, many Americans are on a bad cholesterol diet of bad debt, and its going to lead to a financial windowmaker for families across our country.
Credit cards, buy-now-pay-later, financing everything from vacations to concert tickets.
It creates the illusion that youre doing fine, you can keep up with your Instagram friends and that the money will somehow work itself out later. But it doesnt.
It compounds and compounds just like interest always does until youve to climb out of financially.
Why Lower Prices Wont Fix This
Lets say inflation cools. Even deflation. Prices stabilize. Maybe even come down in some areas.
Does that suddenly fix yourâ¦
Of course not.
Because those are behavioral problems and not economic ones.
At some point, we must own this:
You cant out-earn bad spending habits.
And you cant out-wait them with lower prices.
If your lifestyle consistently exceeds your income, the outcome is predictable no matter what the C