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.
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