There are people out there who are lucky enough, smart enough or a combination of the two to avoid debt for the larger part of their twenties. This may be because parents are generous (say thank you!), scholarships are won (nicely done!) or budgets are kept (impressive!). Whatever the reason may be, there is one thing to keep in mind: at some point in your life you are going to be in debt. You just have to be smart about it.
Debt is defined as something, typically money, that is owed or due. Before you pay a credit card bill, even if you pay it in full every time, you are in debt until you do so. When you buy a house in your adulthood and sign a mortgage, you are in debt that you dig out of little by little every month. The reason why I am telling you these things is not to scare you, but rather to have you get used to the idea and not be deathly afraid of debt. Don’t get me wrong, there are some instances where you should definitely be scared (that’s for the next blog post), but if you’re looking at the land of debt through the rose colored glasses of no outstanding monetary obligations, everything could be okay if you handle debt responsibly. I’m here to tell you how to do just that!
Having debt is just like getting your license – it’s a great idea to have someone in the passenger’s seat when you start out just in case you forget to put your clicker on. Consider me your co-pilot. We will start with these three basic driving rules:
Determine Your Destination – Before you take the leap into spending more than you can afford at the moment, ask yourself why you want to. You better have a pretty darn good answer to that question, and once you have the answer, ask your personal co-pilot (parents, a financially responsible best friend, mentor, cousin’s spouse) for an objective answer. The worst thing you can do is forget to ask this question from the get go and then ask yourself why why why why why you did that years down the road when you are wallowing in bills. The last thing you want to do is end up staying in a motel on a deserted highway when you could be in Hawaii instead.
Map Out Your Route – Once you have a destination determined, figure out how you are going to get there. Financial advisors are like the Google Maps of your monetary wellness. GO TO ONE. Fidelity and Vanguard are two of my faves and try your hardest to go see a financial planner in person. They will help you determine whether you should take the express or local train when you start paying off your debt. Faster is usually better, but this can vary on a case-by-case basis.
Focus While On The Road – There are so many distractions when you are driving. Your cell phone, the radio, the surrounding scenery, the list goes on and on. Once you set off on your debt adventure, keep your eyes on the road. Yes, that sushi restaurant is awesome, but you don’t need to go three times a week. Yes, that movie theater has really comfortable seats, but playing a DVD at home and making your own popcorn every once in a while won’t ruin the movie. Stay focused on paying off your debt. Motivational monetary quotes or songs do the trick for me. Destiny’s Child’s song Independent Women: Part I gets me back on the road every time.
So, my friends, the best advice I have for you is to be wise and act as if this debt determined whether or not something very important to you happened. Would you get into debt and then pay it off if it could make the Cubs win the World Series? Would you get into debt and then pay it off if it meant you could find your soul mate? Would you get into debt and then pay it off if it meant you could FINALLY have six pack abs? You get the idea.
Now get in the car. That is, after you have filled up your gas tank, tested the air pressure in your tires and made sure your AAA account is still active. Just in case.
By Jenna Heffernan