Part of growing into a responsible young adult is learning to manage money with wisdom, common sense, and generosity. We set a pattern for our finances from the moment we start making money, even if that money is only from birthday and Christmas gifts. In order to safely survive without incurring mounds of deadly debt, we must first mark the major financial pitfalls on the road ahead.
Despite popular belief, the most important years of your financial journey are your high school and college years. Why? Because the financial philosophy you develop during this time will either make or break the next few decades of your financial future.
If you are not careful, you could spend years cleaning up the financial mess from your high school and college days.
You may think that being a teenager means no financial decisions or problems, but it is possible, even now, to land in huge financial trouble. Once a fourteen year old boy called the Dave Ramsey radio show, because he had $21,000 dollars of debt.
If you make it past your high school years with no financial scares, the college years still await and are ready to devour you. According to Student Loan Hero, “The average student loan debt for Class of 2017 graduates was $39,400*, up six percent from the previous year. . . Americans owe over $1.48 trillion in student loan debt, spread out among about 44 million borrowers.”[emphasis mine] In other words, as soon as you get out of high school, you will have to decide if you want to incur almost $40,000 dollars of debt in only four years.
And this is only the tip of the iceberg. Many students incur even more than $40,000 dollars of debt, but without the high paying degree to rectify the issue. Financial guru and bestselling author Dave Ramsey regularly has young adults calling into his radio show who have anywhere from $100,000 to $500,000 dollars just in student loan debt. While a couple of these individuals have degrees in high paying fields (such as medicine or engineering), several of them have super low paying degrees or even degrees from bogus universities. Just like these people, you could spend years, maybe decades, paying off student loan debt unless you carefully guard your finances during college.
If you managed to survive the student loan debt attacks, then you still have to contend with vicious credit card companies. Credit card companies fiercely target college students, knowing that they are some of the most gullible victims. You must have a plan before you set foot on campus, because if you wait, you’ve already been sold. Newsweek cited a study that showed just how susceptible college students are to credit card marketing:
“Last year, U.S. PIRG compiled the survey results from 40 universities in 14 states and found that more than three fourths of undergraduate students stopped at a marketing table to learn about credit-card offers. Of those, a third were offered T shirts, water bottles, food, even “stress balls” in exchange for filling out a credit-card application. Such tactics work: nearly two out of three students in the 1,500-person sample said they’d signed up for a card.” [emphasis mine]
In another story, one college freshman applied for a credit card purely because she wanted the t-shirt that the marketing table offered if she filled out the application. She incurred $25,000 dollars of debt on that credit card which she is still working to pay off fifteen years later, now thirty-three years old. Your college financial decisions will haunt you long after you graduate.
While I cited a great deal of scary statistics about financial danger, the essence of this article is pretty simple (and not terrifying). Money is not a moral force, but rather a tool. If you use it poorly, it will wreak mass destruction on your life and the lives of your family members. But, if you utilize it wisely, it will empower you and your family to live prosperous, generous lives. Choose carefully, because the financial decisions you make now could shape the rest of your future.