When it comes to getting into debt, we seem to be starting younger and younger. One age group that has been hit particularly hard is college aged kids. Whether it be the freedom of being on their own, the peer pressure to have nice stuff, or the unexpected costs of being away from home and footing their own bills, college aged young adults are carrying an increasing amount of debt.


Obviously a large percentage of the debt held by young people is in the form of student loans. The cost of a college degree is rising, and not everyone can afford to pay for it out of pocket (or have parents who can). Even with holding a job during college, it is necessary in many cases to take out loans to pay for tuition. The good news is that student loans have a very low interest rate compared to, say, credit cards or even car loans. The bad news is that Congress recently passed a bill cutting funding to federal student-loan programs, so it will become harder and more expensive for some students to attend college. A student loan, while technically a form of debt, is also an investment in the future, and is almost always worth it. This type of debt among young people is not that worrisome, and is actually rather encouraging.

The debt that does raise concerns is the debt that comes in the form of car loans (for cars that are way too expensive for young kids to be driving), outrageous credit card bills, and even mortgages on condos or apartments that you would expect your parents to live in. What happened to the old college days of cheap apartments, barely functioning vehicles, and eating ramen noodles? Ah, memories…. But in all seriousness, young people these days seemed determined to start out at the same level their parents are at, and it is resulting in massive amounts of debt.

It goes without being said that it is much easier to get into debt than to get out. Debt is a horrible habit to get in to while young. You could spend years, even the rest of your life, depending on how far in you are, trying to pay off old debts. Credit card debt is the worst when it comes to taking forever to pay off. At least loan payments have some sort of a timeline for paying back the money you borrowed. By simply paying the minimums on credit cards, however, you can stay in debt for years.

Anya Kamenetz is a young author who writes about “Generation Debt” and argues that young people are too prone to financial problems. She says that everyone wants to have nice stuff and expensive toys, whether or not they can afford it.

So the moral of the story is to curb your spending! Especially if you are young. Get into the habit of living within your means. Invest in your future and only buy what you can afford!

This entry was posted on Friday, February 24th, 2006 at 6:43 pm and is filed under Debt. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.