America, We Are Eating Ourselves To Debt!
October 11th, 2007 | by rachel |
The idea that a link exists between Americans shrinking wealth and bulging waistlines is not a new one. While the details of such a link have been difficult to prove, increasing numbers of Americans are classified as overweight or obese and the savings rate of Americans has hit negative numbers. Linked or not, both of these issues are serious. They can and should be addressed!
WHAT DO THE NUMBERS SAY?
- In 2003-2004, 66% of American were classified as overweight or obese. (The Johns Hopkins Center for Human Nutrition)
- In 2006, consumers spent approximately $160 billion at fast food restaurants. (http://moneycentral.msn.com)
- Between April 1, 2006 and March 31, 2007, Visa payments at quick service restaurants rose 31% and debit card payments rose 32%. (http://www.creditcards.com)
- 77% of respondents said [when paying with plastic], “they can buy exactly what they want because they are not limited by the cash they have available.” (http://www.visa.com)
- On average, customers spend 30% more when paying with a credit card than customers that pay with cash. (http://www.visa.com)
- College students have an average of 2.8 credit cards each and owe approximately $885. (United College Marketing Services)
- 54% of Americans say they will eat out less in the next 3 months because of concern about the economy. (http://www.rbccm.com)
- 54% of Americans polled do not have an emergency savings fund of at least 3 months of living expenses. (http://www.bankrate.com/financialliteracy)
WHAT ARE SOME CAUSES OF THESE PROBLEMS?
- Debt occurs when people spend more money than they earn.
- Weight gain occurs when people consume more calories than they burn.
- Working longer hours
- Less active lifestyles
- Increased mobility and time spent away from home
- Desire for convenience
- Increased availability of high fat, high sugar, high carb foods
- Convenience of paying with plastic instead of cash
- Larger portion sizes
WHAT CONSEQUENCES DO WE FACE FOR GAINING WEIGHT AND INCREASING DEBT?
- higher medical costs and debt associated with medical care
- increased childhood obesity
- risk to credit history
- multi-billion dollar weight loss industry
- average credit card debt of $7000
- “financed” fast food meals
- increased risk for ID theft, credit card and/or debit card fraud
WHAT CHANGES CAN WE MAKE TO REVERSE THESE TRENDS?
- Use cash!
- Make using cash more appealing and more convenient than using plastic. In other words, stop responding to the credit card companies desire to “streamline” transactions made with plastic (no signature required, contactless transactions, etc.)
- Provide insurance and health care incentives for people that maintain a healthy weight (i.e. wellness benefits)
- Provide broad education for all ages addressing the RESPONSIBLE use of credit
- Limit the amount of credit that can be extended to people that are not able to afford to pay it back
OTHER HELPFUL INFORMATION:
The Billion Dollar Deal Report - Center for Responsible Lending
Rich & Thin: Slim Down, Shrink Debt and Turn Calories Into Cash, Deborah McNaughton & Melinda Weinstein
Economic Causes and Consequences of Obesity - The Annual Review of Public Health, 2005
Certainly, there are many overlapping issues that contribute to the problems of debt in our country. Ultimately, the decisions we make about our own finances are the ones that will dictate the financial situations that we find ourselves in. Nancy Twigg of Counting the Cost Publications summarizes the issues quite well when she says, “Fat in your family budget is very much like the extra pounds around your waistline: it sneaks up on you! Those little, seemingly insignificant expenses here and there add up to big chucks of your income that could be used otherwise.”