Читать книгу Personal Finance in Your 20s & 30s For Dummies - Eric Tyson - Страница 45

For a number of years now, it has been argued that young adults are under pressures that lead them to go deeper into debt than prior generations. The reasons cited for this generational debt have typically included the following:

 High costs of college: Annual increases in the costs of a college education have far outstripped the increases in general prices of other products and services. The price of some private colleges now is over $80,000 per year!

 Stagnating incomes and job prospects: Most industries and companies compete in an increasingly global economy. And, the Internet has undermined and disrupted numerous retailers and other industries, causing incomes in those businesses to stagnate.

 High housing costs: The 1990s and most of the 2000s saw rising housing prices, which priced many entry-level buyers out of their local markets.

 College campus credit-card promotions: The availability and promotion of credit cards is a big problem. Credit cards are tempting to use during college when your income is minimal or nonexistent. Due to the high number of college students getting into unmanageable credit-card debt, the CARD Act of 2009 restricts card issuers from marketing within 1,000 feet of college campuses. But beware, they set up right across the street and bombard young adults at the age of 21 with all sorts of offers and solicitations. This practice and credit cards offering rewards are getting more young adults hooked on credit cards.

 Economic disruptions: Plenty of young people had their jobs and economic lives take a hit during and in the aftermath of the 2008 financial crisis and the 2020 COVID-19 pandemic.

 More temptations to spend money: Never before have so many temptations existed for spending money through so many outlets. In addition to the ubiquity of places to shop both nearby and online, people are bombarded with ads everywhere.

Most of these reasons for incurring generational debt are valid. In truth, however, this gloomy list isn’t really fair and balanced. Here are some counter-arguments to the previous list:

 Less costly higher-education options are increasing in number. Yes, there are plenty of high-priced four-year colleges, especially private ones. But they don’t have a monopoly on the best higher-education options!

 Unemployment hit a 50-year low just before the 2020 COVID-19 pandemic hit. And incomes were rising briskly, especially for those near or below the median income levels. (While the Internet and big tech companies have their downsides, it’s easier now to research and find better values online, which enables smart consumers to get more bang for their bucks.)

 Many metro areas have affordable housing, and more workers can work remotely. Increasing numbers of employers are actively trying to grow their employment away from high-cost cities such as New York, San Francisco, and the like.

 College students don’t need to have a credit card, which is the cause of students potentially running up debts they will be unable to quickly pay off. Debit cards, with a VISA or MasterCard logo, enable students to pay for items and then have the funds immediately deducted from their checking account, thus preventing them from spending money that they don’t have.

 Opportunities happen during periods of economic disruption. Recessions can harm plenty of people, but they also provide opportunities for those whose finances are in order and who have courage and plans!

 You don’t have to subject yourself to endless advertising nor succumb to its directives. There are plenty of ad blocking tools you can use when online or watching your favorite programs. You can also choose to consume more media that employs less ads.

You may encounter some or all of these debt traps during your 20s and 30s. Remember that you’ll always face things in life that you can and can’t control. If you’re aware of these land mines and can discern the difference between what you can’t control and what you can constructively do to contain your spending and debt, then you’re on the right track. If certain venues or situations or people tempt you to overreach, then avoid them. The rest of this chapter can help.