I’m a self-proclaimed financial nerd. I keep serious track of what I spend and I manage my debt very wisely. I keep up with the latest trends in investing and I watch my credit score like a hawk. And no, that doesn’t mean you can borrow a few dollars till next week! With that having been said, I’m a bit of a rarity among my contemporaries.
I read somewhere that last year, more people declared bankruptcy than graduated from college. More and more people age 25 and under are being forced to declare bankruptcy and are starting their post-college lives buried under a mountain of personal debt, not including student loans. Speaking of student loans, Sallie Mae and I are NOT friends! Every time I see a damn student loan bill with the Sallie Mae logo on it, I want to curse my degrees.
Anyway, I completely understand why so many of my peers are suffocating under their bills. When I was in college, almost every time I went to the dining hall or the student center, there was a table staffed by a representative from a major credit card company. The representative would convince unsuspecting students to apply for their credit card in exchange for a T-shirt. Come on, what college student can’t use another T-shirt? When the students would ask about paying the bill, the representative would assure them that the monthly amount would be small…something like $15-20 a month. Thinking that they could afford the monthly payment, and telling themselves that they would only use the card for emergencies, the students would naively apply for whatever card. Multiply this scenario by five, and now Jane Doe Student would be the proud owner of five new shirts and five cards only to be used in emergencies.
Once the cards arrive, a legitimate emergency would come up. A tire would blow out or an emergency trip home for a funeral would come up. But after a while, the emergencies would become less emergent…an impromptu trip to the mall, a new dress for the fraternity formal, a haircut. Everything seemed like a minor emergency, but that piece of plastic would save the day. After all, the payment’s only $15, right? Well somehow Jane’s work-study check didn’t cover this month’s round of bills, but surely she’d be able to catch up next month. To her surprise, the $15 payment jumped up to $45 because of interest and late fees. Again, multiply this by five and most certainly the work-study check won’t cover it.
That’s just one way so many students get caught up, some are just too eager to have plastic in their pockets and go melt the thing at Nordstrom the first day they have it. So many men and women are sitting in these fabulously decorated apartments, financed by a Visa card hanging by a thread to its credit limit, but unable to figure out how they’re going to pay for food. Many of us have great jobs, but might as well be working a volunteer position because all the money gets spread out to pay off big huge debt. At the rate they’re going, their great-grandchildren three times removed will be paying the debt off.
I’m all for stopping the predatory credit giving in colleges. I hate seeing credit card companies preying on naïve college students, knowing that once they get them, they’ve got interest income for life. But more than that, I want to see a shift toward better financial education in this country. I do what I can to teach my friends, and even my family to an extent, how to manage their finances and protect their credit ratings, but I’m only one woman. I don’t want to see my generation remembered for sabotaging the American Dream and having jacked up credit. I want to see us buy our own homes, not live in the ones our parents bought because we can’t afford to do better.