The Grad's Guide to Money by The Navigators;

Author:The Navigators;
Language: eng
Format: epub
Publisher: NavPress Publishing Group
Published: 2013-08-15T00:00:00+00:00

8

Habit Six: Avoiding the Big D

The rich rule over the poor, and the borrower is servant to the lender.

PROVERBS 22:7

Debt — noun. An ingenious substitute for the chain and whip of the slave driver.

THE DEVIL’S DICTIONARY

Going into debt is a blast. I know all about that. If a credit card company deems you worthy of its card, you’ll be able to buy all kinds of stuff you can’t afford: trips, clothes, restaurant meals. Living beyond your means is great fun — until it isn’t anymore and your debt load starts to feel like a wheelbarrow full of bricks that you’re pushing up a mountain.

That’s when you discover that getting out of debt is way, way tougher than getting into debt. I know all about that. It took me four and a half years to pay off my $20,000 of credit card debt. Four and a half long years of sending $500 per month, each and every month, to my creditors to pay for restaurant meals I ate long ago, trips I took long ago, and clothes I no longer wore.

“Not Much”

I once heard someone in her early twenties say she had $6,000 of credit card debt. She literally shrugged her shoulders at the amount and casually described it as “not much.”

Not much? Well, think about this. Let’s say that by some miracle she stops going any further into debt. And let’s say she regularly makes the minimum monthly payments required by the credit card company. Using some common assumptions about interest rates and minimum-required payments, it’s going to take her more than forty-two years to pay off that “not much” level of debt, and she’s going to pay over $16,000 in interest along the way!

If you’re going to be successful with money, you absolutely need to commit to getting out of debt as soon as you can and then staying out of debt. The only exception is a reasonable mortgage, but that’s probably not your focus right now.

If you’re going to get out of debt and stay out of debt, you’re going to need some passion behind that commitment because walking around carrying a big load of debt is so common that it feels normal.

But it’s not normal. It’s crazy. It will keep you from achieving your goals, mess up your most important relationships, and stress you out.

Do the uncommon thing. Live with a ruthless passion for avoiding debt and you will be well on your way to achieving an uncommonly good financial life.

Student Loans

Are you planning to use one or more student loans to pay for college? It’s a pretty common part of the college experience. About 75 percent of students graduate from college with student loan debt.

I realize you may not think you have any choice over the matter. You may think you won’t be able to afford college without a student loan. But I’d like to challenge you on that. At the very least, I’d like you to clearly see what you’re getting yourself into.

The average debt load of college students who graduate with student loan debt is over $25,000.

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