Homes in the Hamptons, Hummers, designer handbags, day spas -- young Americans love our luxuries. Have your credit cards ready. Operators are standing by.

Oops, please hold. That's Visa on the other line.

You thought living large was free? We sure spend like it is. Last year the average household paid $1,000 in interest on the money borrowed to add a little bling-bling to their lives. That might not sound like much, but consider that all told, the amount of interest our nation shelled out could have purchased the entire inventory of 5,000 Jaguar dealerships. Or a 2,000-year endorsement deal with Tiger Woods. Or Abercrombie & Fitch (NYSE:ANF), Apple Computer (NASDAQ:AAPL), The Gap (NYSE:GPS), Best Buy (NYSE:BBY), Deckers Outdoor (NASDAQ:DECK), and LVMH Moet Hennessy -- the companies -- with $90 billion to spare.

Young adults (and even some not-so-sprightly ones) can't seem to say "no" to the "buy now, pay later" payment plan. Can you blame us? Temptation is everywhere. Stroll the aisles of Costco and you'll find filet mignon, Waterford crystal, and iced-out Tag Heuers alongside the industrial-sized cans of tuna and 50-pack paper towels. Just yesterday I saw Prada and Miu Miu mules at Designer Shoe Warehouse. Flip on the tube and there's Cribs, Pimp My Ride, and The Fabulous Life Of... celebrating gilded excess. As long as you're tuning in, please don't touch that dial. According to, from childhood to high school graduation, we're inundated with more than 300,000 TV commercials.

It's no wonder that we pine for cars with Hemis, detergent with scrubbing bubbles, and pre-tattered jeans with someone else's name embroidered on our butts. Bring it!

Generation Broke
Gen-Xers like myself have recently earned a new nickname: Generation Broke. I think it should be "Generation Going for Broke." According to a recent survey, the average indebted household (aged 25 to 34) spends a quarter of every dollar earned on debt payments and has the fastest growing rate of bankruptcy. (I'll pause here for some uncomfortable self-reflection about my last Visa bill.)

We're certainly not setting a good example for our younger peers. Recent studies show that less than 20% of workers age 21 to 24 choose to sock away even one dime in their work retirement plan when handed the paperwork. In the meantime, the average college graduate saunters past the dean's lectern with $3,000 in credit card debt trailing behind.

What should luxury-loving guys and gals do? Easy: Be better than average.

Beating average isn't that hard to do: The average person has eight credit cards in his name and a month-to-month balance of more than $8,000. Just 40% of people pay their accounts in full every month, and 20% max out their cards. Our fellow shoppers are so weighed down in debt that they can barely hoist themselves up to air-kiss their gal pals when they spot them across the mall food court.

Average Americans, according to nationwide surveys, say things such as second cars, vacation packages, Jacuzzis, and kickin' home-entertainment systems are "must-haves." Lifestyles of the Rich and Famous? How quaint the 1980s series now seems.

Fast-forward a decade, and you could blame your shopping addiction on a medical affliction -- acute form of anxiety and compulsion that can be cured with a prescription for a seratonin re-uptake inhibitor.

You don't need a pill to beat the overspending blues. You need a budget. I've advocated a few different ones over the years, including the "Lazy Girl" budget, the "60%" plan, the "You Can Do Anything -- Even Long Division -- For 15 Minutes" approach, and the ineffective but inventive "Use Funny Math To Justify Anything!" experiment. (Like you haven't amortized the price of a pair of shoes over the lifetime of potential wears. Gimme a break.)

However, nothing beats taking a shopping "time-out." Years ago a Fool reader told us how she cured her case of "the wants" by making her tomorrows better by paying back her yesterdays and not spending on todays by wishing for what she already had.

Confused? Then simply answer a few questions -- truthfully -- when you find yourself wanting:

  • Is this a planned purchase?
  • Will the object of my desire truly enhance my life (after next week; next wearing; next year) or just my image?
  • Can I get that same feeling some other, less expensive way?
  • How long will it take to pay it off -- completely? (Here's some help with the calculations.)
  • How will I feel when I get the bill?
  • If I pass up the purchase, how will I feel when I get my credit card bill?
  • How much would I have if I took the money I would spend on this and invest it for something bigger in the future?

Chances are you'll leave the store empty-handed and happy about it.

Dayana Yochim insists that her trip to DSW this weekend was for "research." The Motley Fool is investors (and shoppers) writing for other investors (and shoppers). Take an additional 40% off the already low price on our disclosure policy. If you find it for less elsewhere, we'll pay you the difference.