This is the Ramsey Call of the Day, part of the Ramsey Network. Joining me today is Ramsey Personality, Rachel Cruz. When we started this whole thing called Ramsey, the Dave Ramsey show was called The Money Game and had co-host back in the day, had two co-hosts back in the day. Now I've got a bunch of co-hosts, different ones obviously, but when we started this thing, the whole idea was learning how to handle money with common sense.
Today we talked about careers and mental health with common sense as well, relationships with common sense with Dr. P, Dr. John Deloney and Ken Coleman, but the whole money thing was about how to handle money well to get control of our lives and become outrageously generous and wealthy and change our family tree. If that has over 30 years, we've ended up spending an inordinate amount of energy towards that end to become wealthy and generous, to get people out of debt because that's the biggest blocker for them to become outrageously wealthy and outrageously generous.
If you get out of debt, your most powerful wealth building tool is your income. If you invest $100 a month from age 25 to age 65 in a decent growth stock mutual fund, it will be $1,176,000. You retire a millionaire, $25 to $65, but you can't have $750, F-150 payment. You can't have a student loan that's been around as long as you think it's a pet, a master card, American distress or discovered bondage.
You can't just keep yourself in payments where all you do is work for the man. All you do is work for the sinking banks that have better furniture and bigger buildings than you do. The reason is you get all your sinking money and you have no money because you gave it all of them. And that has been what we've become known for because it's the single largest blocker for folks out there.
And that has been so normalized in our culture that to even imagine living without it is unbelievable. And Article just handed to us by our producer yesterday, the New York Fed released its Q1 important household debt includes a record high $17 trillion consumer debt balance in America today. So we're doing no good because we're not even making a dent. Apparently we're going to be in business forever.
This is for $17 trillion with persistent credit card debt and rising delinquency rates. We're at, and it's wild that it says in here a typical first quarter. These credit card balances decline as people pay off with expensive holidays while trying to out gift. They're in-laws.
But for the first time ever, the New York Fed stated that tracking this for 20 years isn't the case this year. So for the first time said balances remain flat over Q1, suggesting that people aren't cutting back and are probably using credit cards to finance daily spending due to the rising cost of pretty much everything. And so I feel like this is where when the inflation conversation started about 18 months ago here on the show, the fear was that people were going to more than ever justify take that margin that was there and now isn't there and continue to live a lifestyle and make up that difference with credit cards. Yeah, so let's be real clear here.
The debt is not because of inflation. The debt is because your wuss out and refuse to cut your freaking lifestyle to offset inflation. Because you're still sitting in a line of 30 cars to buy an unbelievably expensive cup of coffee. And yet I'm a debt because of inflation.
No, you're in debt but you didn't cut your spending when inflation hit you. That's why you're in debt. So this is not an outside variable that is controlling your life. You're not controlling the variables in your life.
And so your body ends up in debt. Well, and what sucks is, for a lot of people though, it's not this outrageous lifestyle that they're living. There's two incomes. They have kids.
They have family. They are living life. The quote unquote American standard of living. That again, we can argue the standard of living and what it is.
But what's difficult is when you have to go backwards. Nobody likes to go backwards. That's why I say you're outrageous because it felt normal. Yes.
And so when you actually consider the way we all live, it's outrageous. Our lifestyles are outrageous. We look at the standard, you know, the square footage. We say moral.
Can I, can I, can I? I don't know. Barely, barely. The average square footage in the 70s now.
Average car, average cations. I mean, you look at all of it. And it has the American lifestyle has gone up. And so our expectations on what is normal is here.
And so for families that are living paycheck to paycheck, that aren't doing that. And sure, because, you know, you have a standard car, like there is still debt in the picture that is causing less margin. But when something like inflation hits and eggs and bacon, everything goes up in your grocery bill is like, what? And to fill up your car, you're looking at the gas and you're like, what?
That's in the moment. Like, that's her because there's not the margin for that extra hundred, extra two hundred, extra three hundred dollars. That now is going out on normal expenses. So to cut back, which I agree with you, but it feels like, but what else is cut back?
Because we're normalizing. We're not normalizing. Normalize outrageous. Yes.
We became entitled to outrageous. And so I'm entitled to this. And so, you know, inflation then forced me to go into that, which is absolutely not. I mean, all it is that you have to address, you have to look at America and go, we just buy some really stupid stuff.
I mean, we really buy some stupid stuff. Most people in most countries could exist for a year off of the crap that's in your garage that you've not even seen in a year. You know, I mean, we buy some stupid stuff. So yes, it's normalized.
It doesn't feel outrageous, but it is outrageous. So I always resist when bank rates, senior industry analysts says suggesting that people aren't cutting back and using credit cards, it's because of the rising costs of inflation. No, they're not cutting back to offset inflation. Dooper.
That's what's really going on. And so, you know, and I get it. It's not fair. I don't like inflation.
I don't want that to take your check away from you. But don't be a victim. You're not a victim. You're a victim of the person in your mirror.
And the idea here's another plan. If you think getting into debt to maintain your lifestyle is going to maintain your lifestyle, there's an end to that. There's a mathematical end to that. It eventually comes back around, smacks you in the head and says, hey, dummy, it's not a thing.
It's not a thing. You look at month to month after taxes. You're looking. Okay.
Like, every other budget was not unreasonable. Right? It's a family of five. And it's like, yeah, this is what it costs.
This is what it takes to feed the family. This is what granted the kids are doing. It's life. It's just life.
And life is expensive. And so families out there are listening. It's like, when you're feeling that pressure that you felt even before inflation, and then it adds to this on your life, not even more expensive, you have to evaluate needs versus wants. And this is where we blended so much that our what we want has become a need.
And so being able to prioritize and really look and it's hard, but it's like, okay, what really are our needs.