Examining the Leak
- Brian Walsh
- Apr 7
- 2 min read
Tracing a leak can be difficult and will take some detective work to look around and find the root of the problem. The good news is once it is found it is usually easy to plug up. But, it is going to take some work, some sweat, and possibly some sacrifice to sure things up.
Last week we saw that we can earn well over $4 million in our working life, but sadly many will have nothing to show for it at the end. This week, let's look a bit closer at the reality of where most of the leaks are.
1) Paying for the past: According to Experian, the average monthly payment has increased by 8% since 2022, bringing credit card payments up to over $200 a month, at an average APR of 22+%. When you are living with credit card debt you are stacking the odds against yourself. Most money is going to pay interest and you are paying for stuff you purchased months ago that you could not afford.
2) Big Homes: I'm not against big homes, but it is not a secret that homes have increased in size and gone up in price. In 1949 the average square footage for a home for a family was 909 Sq./ft. Today's median home size is over 2200 Sq./ft, MORE THAN DOUBLE. As homes get bigger, prices get bigger, mortgage payments are now close to $2,000 a month. Your home should not be more than 25% of your take-home pay. Live within your means and you can find room to save for your future. Your home is for you, it should not be a showpiece to impress anyone. No one cares who lives in the home, they just look at the home. It is just like a car in that regard. Buy what works for you, not to impress those around you.
3) Cars: I like cars and I like to drive a nice car, but I do not drive a nice car to impress anyone, it is for me. Most people believe they will always have a car payment, but that simply is not true, you can decide if you want one or not. The current average car payment in 2025 is $742!!! I'm going to tell you flat out, that is way too much. If you make $100,000 a year, that is 9% of your monthly take-home pay, and chances are in 5/6 years you are going to be looking to upgrade. Learn to live within your means and do not blow money on depreciating assets. That payment is equal to $8,900 a year, which could mean millions in the future.
There are many other small leaks across the budget, but these are the big ones impacting us in 2025. This is where a 3rd party can help you dig in and find those leaks, help you take control, and not only live better today but plan for the future.
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