Budget Sense

When reading about how some people fell in deep debt, the story is almost always the same: it often starts when they were students in college or university. There, they are offered credit card after credit card by different companies, where the offer is too good to resist for a young person. And you know the rest of the story.

This college-born debt is killing our youth and young generations, that by the time they graduate, they have to pay both their student loans as well as other debt they incurred through reckless borrowing and spending.

Why isn’t anyone sounding a serious alarm about this ticking time bomb? Better yet, why don’t colleges do something about it and educate their students? Simply assuming that students are mature enough to think for themselves and not borrow if they can’t pay it back, is not enough. As we can see, if the majority are falling for it, then we know students can’t think for themselves, or they just need the money so badly, they don’t think about future consequences.

Solution?

There is no better solution than early education and awareness, starting from parents and high school. Almost every school offer such creative courses in arts, sports, writing etc. How about a course in personal finances? We would be doing our teenagers and youth the biggest favor by educating them early about finances and the dangers of taking on too much debt.  I have been through this too and I can assure you that if someone had educated me about this better, I wouldn’t have signed up for that credit card on campus. After all, I already had one card, why the need for a second?

This is a unique problem. When students enter university, it is a whole new world, and a quiet overwhelming experience. It is a world where there is too much pressures, demands, energy and little money to pay for it all. So when someone presents them with a magical plastic card that can pay for anything up to a car, who can resist? Some of these early college attendees may have been told by their parents about the dangers of debt, but because they haven’t experienced it yet themselves, they don’t pay much attention to the risk.   By the time they do, it is usually too late.

Certainly, we can’t ban credit cards from being offered on college and university campuses. How about keeping them but putting a cap on their limits?  After all, $1,000 limit should be more than enough for immediate and small purchases, and for anything larger and school related, they can use their student loan.

I urge every parent reading this  to spend enough time with your kids to educate them about the toxicity of easy college debt.  If you prepare beforehand, save money for college, and budget properly, you won’t need these nasty credit cards. Unless you want to spend the first decade after your graduation, paying your debt.