As children we look up to our parents as an example, as young adults we find a role model we hope to become, and as adults we may look to the leaders of our country. But with the rising debt of our countries financial situation using them as an example for our own personal finances may not be the best thing.
The nations debt currently stands at approximately 14,429,497,208,000 and rising, according to www.usdebtclock.org. American households and individuals seem to be following suit.
Today’s society is full of instant gratifications, with the click of a button or swipe of a card and it can be yours. Every day there can be something new for sale being marketed that it’s a “must have” and “everyone has one.” With this kind of atmosphere it’s no wonder that in 2010 Americans were averaging around $10,168 in debt per person.
You may be thinking you don’t have any reason to be concerned about debt yet but college students are not exempt from the debt crisis. In April 2009 Sallie Mae reported that nearly 30 percent of college students put tuition on their credit cards, which is an increase from 24 percent in 2004. They also said that 84 percent of undergraduates had at least one credit card, up from 76 percent in 2004, and median debt grew to $1,645 from $946 in 2004.
“Too many students are at risk of overpaying for college by pulling out credit cards to pay for textbooks or even part of their tuition bill, instead of using less expensive financial aid to cover these items,” said Marie O’Malley, director of consumer research for Sallie Mae.
Some may feel secure with their finances because they have a while till graduation But Sallie Mae also reported that the higher the grade level the more secure students are in using their credit cards. The average college graduate has nearly $20,000 in debt and credit card debt has increased 11 percent for 18 to 24-year-olds according to www.demos.org.
The leaders of The Church of Jesus Christ of Latter-day Saints and even the scriptures echo a plea to avoid unnecessary debt.
“Reasonable debt for the purchase of an affordable home and perhaps for a few other necessary things is acceptable. But from where I sit, I see in a very vivid way the terrible tragedies of many who have unwisely borrowed for things they really do not need,” said President Gordon B. Hinckley in a 1992 August edition of the Ensign.
We can read in 2 Kings 4:7 “Pay thy debt, and live,” in Proverbs 22:7 “the borrower is servant to the lender.” Also in Romans 13:8 Paul teaches, “owe no man any thing.”
Things of the world our being shoved in our faces making credit cards seem glamorous and making payments and being debt free as easy as pie. But the reality is that debt has a far more reaching affected than is portrayed by the media. Debt cannot only put stress on our lives and finances it can also put stress on our relationships with those we love.
There are some things we can put into practice that can help us guard against debt now and in the future. We can begin planning now, begin saving now, and create a budget. If a plan is in place determining needs and wants it will be easier to make a decision when you’re faced with a purchase. By beginning to save now you will be able to pay cash for bigger purchase instead of putting it on a credit card. When you create a budget it helps you see how much you’re really spending and where you can put limits on your purchases.
We need to be sure that we are in control of our finances and setting an example for family and friends. Especially when we have been warned by state, national and religious leaders to avoid debt we need to be more financially responsible. We do not need to get caught up in the buying frenzy of our generation or follow others into the pit of debt. Money and finances are something we need to have control over so it does not end up controlling us.
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