Yesterday, I substitute taught in a personal finance class at the local high school. The activity the students were assigned by their teacher gave them this scenario: You are a new member of the workforce. You luckily have no college debt. You are about to get married and start a new life with your spouse. Your task is this: Find two credit cards for you and your spouse (one for personal use and one for your spouse’s business use, which his/her company will reimburse; the latter should have benefits like airline miles, etc.); find an auto loan for the new car you need for work; find a mortgage for the home you will buy.
I have so many problems with this assignment. First of all, it’s probably not luck that you have no school loans. Either you or your parents saved up a lot of money to pay for it, or you made sure you got lots of scholarships and grants, or you worked your way through school, paying as you went. Secondly, I would NEVER use a credit card in my name for business expenses unless I owned the business. If my employer wants me to use a credit card, they’ll have to issue me a company card. Third, you don’t NEED a credit card at all! And you don’t need a NEW car for your job. Find a good used car that you can afford without financing it. Or — gasp — find a place to live where you can use public transportation! And lastly, if you are just out of college and just getting married, what the heck are you doing buying a house? There’s nothing wrong with renting and saving up for a house.
But as a substitute teacher, there wasn’t much I could do. I wanted to shout to the students, “Don’t buy into this nonsense! You don’t have to go into debt to live your life!” Instead, I did my job, which was to make sure they stayed on task and didn’t set the classroom on fire.
Today, a friend of mine posted a Facebook status that said, “We WILL get out of debt… if it kills me… we WILL.” And I totally applaud her! But then one of her friends replied, “Unfortunately there will always be some kind of debt; especially if you have kids (school, clothes, dance lessons, braces, saving for college, etc.) and also if you own a home! BUT, there is hope… Practice self-discipline, talk to someone who is really good with their money, learn to save & invest and you will be FINE, I promise 🙂 I wish somebody would’ve given us that advice when I was in my 20’s!”
No, no, no! If I can’t afford dance lessons for my child, she won’t take dance lessons. If my child needs braces, I will find an orthodontist who will work with me on payments. I will do my best to save for my child’s college expenses, but if I can’t pay for it, my child can work and pay for it himself! And WHY on earth would I go into debt for clothes?!
I am fighting hard against the notion that debt is inevitable. It isn’t. You can be debt-free and stay that way. We’re planning to prove it, as soon as we pay off two credit cards and the house.