The Complete Guide to Personal Finance by Tamsen Butler

Author:Tamsen Butler
Language: eng
Format: epub
Tags: personal, finance, teenagers, colllege students, spend, money, manage, needs, wants, invest, taxes, checks, debit cards, credit cards
Publisher: Atlantic Publishing Group Inc.
Published: 2013-07-26T04:00:00+00:00

Table of Contents

Chapter Six: Debt, Debt, and More Debt

If you live in mainstream society, chances are good you will, at some point, wind up with some form of debt. Whether you wind up with a wallet stuffed full of credit cards or a mortgage loan to purchase your own house, there are very few people who avoid debt altogether. Debt does not have to be a bad thing, but if you aren’t careful, it will take control of your life.

Have you ever experienced the feeling that comes along with owing someone money? Suppose you owe your friend $20. Imagine every time you see that friend he says, “Hey! Where is my $20?” Pretty soon he says, “You know that $20 you owed me? Well now you owe me $25 because you didn’t pay me quickly enough.” Later, if you still haven’t paid him back, he says, “Because you haven’t paid me back yet, I’m going to talk to everyone who might want to lend you money and tell them to stay away from you because you don’t pay your debts back fast enough.” Then, when you do finally pay the debt back, he turns around and says, “Would you like to borrow $30 this time?” This is similar to how credit works. As long as you owe a lender money, the lender is going to pursue payment. If you don’t pay the money back like you should, the lender is going to tell other lenders (through your credit report) they shouldn’t lend money to you. Then, when you do pay the lender, you might find the lender is suddenly willing to lend you more money. It’s a perpetual cycle, and it only ends if you make the conscious effort to end it.

Case Study: Earning Your Own Way

Mary — High School Student

Ever since I was 14 years old, I have had to pay for everything by myself, without my mom’s help. On my 14th birthday, my mom hired me to work for her. She purchased a laptop for me — shortly after I started high school — so I can use it for my school work; her condition was that I pay her back for it. Every month I pay her a certain amount of money, I will continue to do that until I have paid her the correct amount.

I receive my paychecks through direct deposit from my work. It goes straight into my bank account, which I access online. That is how I pay my mom back each month. I use my debit card when I need to spend money. I only spend money when I absolutely have to. I keep my debit card in my mom’s desk so I’m not tempted to spend money. I am saving my money so I can buy a car when I turn 16, or shortly afterwards, and also so I can pay for college.

I often have to convince myself that I can’t spend money, because I have to save it, but sometimes it isn’t easy.

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