The Strib is currently running a series profiling people who are struggling with debt and looking for ways to stabilize their financial circumstances. The profile of the young woman in her 30s who is racking up credit card debt on clothes and eating out was the most familiar to me. Until a few years ago, I had similar issues with money. If I wanted something I couldn’t afford, I would charge it, figuring that whatever amount I was spending wouldn’t make much difference to the amount of debt I had already accumulated. But then I finally got serious about managing my finances. I stopped charging things I couldn’t pay off at the end of the month, I refinanced my existing debt through my credit union at a much lower interest rate, I started making serious contributions to an emergency fund, and I’m using Quicken to keep track of my cash flow. I’m also a sucker for personal finance blogs.
My generation’s money issues have a few root causes. First, our schools do a terrible job when it comes to teaching basic financial literacy. Most kids come out of high school not knowing a thing about managing credit, living within a budget, or the minor miracle of compounding interest. And then these same kids are targeted by credit card companies as soon as they step foot on a college campus. If I had received a little more education on some of the predatory practices of credit card companies (like suddenly raising interest rates after a missed payment), I might have exercised some restraint in my spending habits.
The rampant consumerism in our culture is a contributing factor. Particularly in my demographic (young urban dwellers), there’s a certain amount of pressure to maintain a certain standard of living. It’s awkward to admit that you can’t afford to eat out with your friends or take that weekend trip to Vegas. We all want to live large, but that’s just not sustainable on salaries of $30 or $40K.
I wince when I hear friends telling me about how they spent money they don’t have. Many of us are likely to be in debt for decades to come, refusing to learn from the mistakes we’ve made.
