Twentysomething and debt

December 6, 2006 at 2:29 pm 1 comment

USA Today’s doing a feature on people who are “young and in debt.” This week there’s a story of a 25-year old girl, Kimberly, who’s fresh out of college with a psychology degree, living in an apartment with her wiener dog, $2,700 in credit card debt, $7,800 owed on her car, and $30,000 in student loans.

“Though she doesn’t have to pay on her student debt yet because she’s back in school, saving money is still an uphill challenge.” Of course it’s an uphill battle. She’s trying to push the snowball while she’s running from one. What do I mean? We’re familiar with snowballs right? The faster and longer the snowball rolls it grows and grows and grows. Debt and saving are snowballs. Debt is the snowball chasing you. Just look at the interest you pay on that credit card, or car, or student loan and you’ll see what I mean. Saving is pushing the snowball. It’s using compound interest at it’s finest.

You’re either going to run from the snowball or push it. You can’t do both. And that is where Kimberly is.

“Eventually…she’s confident she’ll earn enough money to make all her education debt worthwhile. “I’m not worried about the long term,” she says. “But I’m a little nervous about the short term.” I have to say this now to get it straight. You will never make enough money to cover your stupidity. Sure, there are some lucky ones who have. But the majority of people in debt have a mindset that they just need to make a little more. Then they would be okay. That’s just completely wrong. You need to learn how to manage the money you have now or else that extra income will end up being misused like it is now.

“”I understand what I need to do,” she says. “It’s just getting the money to do it.”” No. You need a plan Kimberly, not more money.

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Entry filed under: Soap Box.

Debt counseling goes Hollywood..sort of Busting out the hammer for early retirement

1 Comment Add your own

  • 1. dimes  |  December 10, 2006 at 3:24 am

    She has a car and a motorcycle? Whuh?

    Reply

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