“Understanding Debt in America”
You might have noticed a lot of talk about debt in America, spanning from students to adults, different generations, and various types of debt. Doesn’t it seem like we’re pretty good at accumulating debt? Although our situation might not be as bad as some other countries, it’s definitely not the best either.
Interesting thing about these debt numbers is how they keep raising questions. How did we get here? Once we realized we were falling in the red, why didn’t we stop and fix it? Why does this national debt keep growing? And why should we care?
Let’s talk about millennials, for example. Since I’m one of them, I can relate to how tough things can seem. We’re the first generation that grew up with college education being almost necessary, but extremely costly, causing many of us to acquire considerable student loan debt. And starting your adult life with an average student loan of nearly $26,600 can be really daunting. Plus, don’t get me started on the meager employment opportunities for our generation. But hey, on the bright side, it looks like many of us are noticing this debt pattern and trying to do something about it.
We can’t just blame millennials for this debt crisis; it’s not exclusively our problem. We got our money management skills from somewhere – yup, that’s right, from our parents, the baby boomers. They really wanted us to have it all, and they were the first generation believing in “achieving everything.” But in all that chase of having it all, the “planning” part slipped away. It makes me wonder, how do I ensure I don’t make their mistakes?
The reason why I’m fascinated by these statistics and debts is because I want to anticipate what I’m up against. I want to learn from previous generations’ lessons and mistakes to carve out a better path for myself. I want to ensure I won’t have to postpone retirement, like many baby boomers, or face the financial perils that generation X went through. Sure, some debts are considered “good”, like student loans and mortgages, but if I can avoid them, it’s even better.
If you’re interested in navigating a debt-free life, there’s a chance to win Suze Orman’s The Money Book for the Young Fabulous & Broke this month—details below.
What money lessons have you learnt from other generations? Share your thoughts and experiences with us!
This article is part of Financially Savvy Saturdays. Join the discussion and broaden your financial horizon.