Some of the identifying details here are being tweaked or muffled to protect confidentiality, although I will say that the people involved are lovely humans whom I respect a great deal. 

I keep seeing jokes like this pop up online:  

And boy howdy, have I been there. 

Hey, jealousy… 

When we first moved to our current neighborhood, we met most of our friends out on dog walks. (Ok, that’s still how we meet new friends.) When I was out for one such stroll, I met a young couple who had just arrived in the neighborhood and were expecting a baby in a few months. Since my firstborn was a babe-in-arms at the time, we bonded pretty quickly, comparing notes on prospective daycares and the tribulations of new homeownership. 

As we started to hang out, we learned that they were gregarious hosts, possessed of a house that was bigger and nicer than ours, in a slightly ritzier part of the neighborhood. And as we hosted each other back and forth, I started to feel some kind of way about it. 

At first, their home was underfurnished, just like ours. But every time we went over to their house, it seemed like they’d added another new Pottery Barn showroom to their furniture collection. It was beautiful, and immaculately chosen, and fancy, and classy, and so adult. 

I went back to my house and looked around and I felt… deeply inadequate. Like I was doing something wrong. Maybe we needed to loosen up the purse strings a little and make our house look finished and pretty, too. Maybe I wasn’t grown-upping right, and I felt like anyone who came over could see it. 

It didn’t help that this incredibly kind, organized, decent couple had seemingly indefatigable reserves of energy to go with their dual-high-earner jobs, and that they were always doing elaborate home projects or making delicious foods. One day, I got to the point where I told my therapist about how insecure and inferior all of this was making me feel. 

She reminded me wisely, as she often did, that no one could escape their humanity. And while I hoped she was right, I couldn’t quite see how these particular people were making it work. 

Much later, the friend and I were talking about maternity leave policies. Her employer hadn’t been great about her situation, and she was not thrilled to be back at work and juggling particularly chaotic dual-working-parent schedules. I asked if she had the option to work part-time. 

“I would love to, but…” she shrugged. “With our huge student loans, I really don’t have a choice.” 

That’s when it hit me: my perception of their prosperity wasn’t quite the same thing as their reality. 

The choices our friends were making and the choices we were making were different. One of their choices appeared to be that they had money to spend on a bigger, costlier house and its furnishings, but it came at the cost of working more than they wanted to… because they had accepted their debt as a fact of life. 

Meanwhile, we’d put down 50% cash on our house and had decided to treat our mortgage like a house fire instead of a house cat, which came at the cost of waiting to buy things like a new dining room set. 

This didn’t mean we were better than them, but it also didn’t mean they were better than us. 

It took a little more therapy and life coaching, but I no longer feel like a failure for having a house that’s not fully decorated with Pottery Barn or West Elm. Our home is welcoming, comfortable, and fully paid-for. We have no debt, a huge emergency fund, and a net worth that we’re really happy with. But most importantly, we have choices, and that feels right to us… even if most of our stuff is still from Target and Ikea. 

It’s not just in your head

If it feels like everyone you know spends beyond your income, you’re not imagining things: American household debt in spring 2021 totaled $14.6 trillion, and the average household debt as of November 2020 was $145,000. 

There’s a lot of good data out there, but because not every debtor has every type of debt and not every debt is tracked in the same way or surveyed at the same time, it’s not quite an “oranges to oranges” comparison — it’s more like “oranges to clementines to Meyer lemons to grapefruits,” but it’s all still citrus. Here are some of the average consumer debts (from either 2019 or 2020 numbers, whichever was available): 

• Average credit card balances owed: $6,271
• Average mortgage: $215,655
• Average HELOC value: $49,929 
• Average auto loan debt: $17,553
• Average new unsecured personal loan: $5,538

And broken down by age… 

• The average millennial has more than $87,000 in debt.
• The average Gen Xer has more than $140,000 in debt.

So if you’re looking around and maybe pulling your hair out wondering how your friends can afford their lifestyle while you might feel like you’re fighting an uphill battle in your own finances… first of all, you’re not alone. And statistically speaking, the answer probably involves at least some debt. 

You see the shiny new car, but you don’t see the payment. 

You see the luxurious remodel, but you don’t see the HELOC that paid for it. 

You see the high-earning job, but you don’t see the student loans it’s shackled to. 

And because we live in a culture where talking about money is often treated as a huge taboo, you may never know whether your friends are secret trust-fund babies or simply… in debt up to their eyeballs. 

While your friends may earn more than you do, it’s worth noting that higher earners are more, not less, likely to carry debt. Americans in the top 10% of income-earners have a median $222,200 in debt; the bottom quartile has less than $21K. Some of this is undoubtedly because higher earners are able to qualify for way more borrowing, even though you’d think they would be way less likely to need it. Although it would be hard to find data to support it, my instincts tell me that high earners might also feel a lot of pressure to keep up with the Joneses, both in the corner office and in the fancier corners of the neighborhood. 

But the evidence suggests that, for most people who actually manage to become The Millionaire Next Door (ourselves included), getting and staying out of debt is an absolutely critical ingredient in building actual wealth. 

Now, I’m not going to judge you if you have debt. Many of us made the choice to get into debt before we really understood what it meant (hi there, 23-year-old me buying a house!). I’m also not going to judge you if you’re not naturally frugal, or if you have made choices that felt incredibly normal in relation to your circumstances — buying things at the top of your price range, leasing or financing cars, frequently upgrading your stuff, whatever it might be.

But if you’ve read this far, maybe you’re considering another way of doing things. Maybe you want fewer bills and more choices. Maybe you’ve decided to get serious about your long-term financial security. Maybe you recognize that wealth is access to impact, and you want the power to create positive change in your community. 

If you’re ready to start a new chapter, let’s talk. 

The Amazon links in this post are affiliate links, which means that if you choose to make a purchase through the links, the price is the same for you, and Fortuna will a) get a small commission from Amazon’s Affiliate program and b) be super grateful for your click! Also, I just learned that apparently you don’t have to buy the thing we linked – if you click through and buy something else, we still get credit for sending you over there, which is wild but also kind of cool.