Almost everyone in my generation (millennial) has or has had some amount of debt and may even consider it a way of life. If you are comfortable with your debt and don't care to see it gone then this post is not for you. If however you are looking to buy a house, be a stay at home mom or are just tired of making other people rich off the fees and interest you are paying every month then this post is for you. There are two major sources of long term debt that most households have. The first type of debt is also the highest interest and most dangerous, if you guessed credit card you are correct. The average household has roughly $16,000 worth of credit card debt with interest rates ranging from 10-30%. The second common debt is student loans coming in at $33,000 a household.
- The credit card is in my opinion the most dangerous and difficult to get rid of since it is revolving debt with high interest and many steep fees. This is a bit like a merry go round in the sense that if you don't get off the ride you will keep going in circles. My advise would be to cut the card up and don’t look back. It may well be painful however stay on the merry go round long enough and your likely to get sick.
- Someone once told me “you can't get an education without student loans”. This is not at all true, you can get a 4 year degree and walk away with no student loans (see my other blog on the subject). I wish I had known how many alternatives there are out there when I first started school, it would literally have saved me thousands of dollars. Student loan debt as a country is currently (Aug 2015) at 1.2 Trillion dollars. How in the world does it cost in excess of the entire GDP of the country of Mexico to educate students? This number should shock you, if it doesn't then you should stop reading right now. You have options when it comes to student loan debt, you can defer the payments, get an income based repayment plan or consolidate them into one payments. None of these are particularly good options since you will still be paying interest on all of them. My advise would be to finish paying off your credit cards and then start paying down your student loans as quickly as you can.
The bottom line is that your debt is just that YOURS. It doesn't hurt anyone but you and it's not going anywhere until you decide to get rid of it. It is a sacrifice to get out of debt, it will likely hurt at times but it's doable and the rewards are great. If I could go back and do it over I would never have borrowed a penny for school, credit cards or anything else. I can't go back but I can sure as heck change my legacy going forward. If you want to change yours I am happy to help in anyway I can, give me a call or shoot me an email and I can turn you onto some great resources.
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