Yikes: Scary article on young adults and debt

**MissSeetonFan** · 07-18-2011, 08:59 PM

Young adults feel empowered by debt, new study says | Deseret News

This is a bit scary to read. Fortunately it ends with quotes from one young adult who has been buried and is working his way out of it. But to feel empowered, have high self esteem simply because you didn't have the will-power to earn and save for that big plasma TV, or IPad or whatever? That is so backwards.

They really do not understand, except for the two young adults quoted at the end, what is really happening to them.

**khaski** · 07-19-2011, 09:01 AM

Oy, that is scary...but look who their examples have usually been- their parents, who spent years charging, charging, charging. These cc companies prey on young folks, betting on a lack of wisdom and know-how to get those new young customers charging away! I hope with all my heart as we work through the debt make-overt that I am imprinting my kids that the only 'acceptable' debt in our eyes is a reasonable mortgage. Those young dults may feel 'empowered' now, but that';ll bite them in the behind when their lights get shut off as there's no $ to pay the bill, or they are turned down for a job because they have so many cc's in collections or late payments it sunk their FICOs and now the company will no longer consider hiring them. I don't understand how a personal finance course is not part of the ON GOING education of our youth in this country! Not a one semester deal, but a bit every year. A lot graduates don't even KNOW what a FICO score is...I sure as heck didn't!

**greekislandgirl** · 07-19-2011, 09:22 AM

What a bizarre concept! Debt makes me uncomfortable and always has. I can see how someone with a shopping addiction might feel "high" from using credit but I don't understand why the general population of young people would, knowing that at some point they will have to pay back MORE than what they borrowed. Very very weird.

**lottaLove** · 07-19-2011, 10:11 AM

Saving up to buy something is an idea that just doesn't exist. About 10 years ago I would charge anything and everything not really realizing I actually had to pay those amounts back. It just didn't click in that I would be making those minimum payments for the rest of my life if I didn't clear the balance every month. The ridiculous thing is, most of my cc debt was charged up on consumables, such as pizza, hair products, other spur of the moment purchases that have no real value. It did give me a sense of empowerment to pull out the plastic, like I was part of an elite crowd (think like the movie clueless....I really was clueless). I'm glad I've gotten my swift kick in the pants and set things in my life straight, it is just hard to see so many young people going down the same path I did.

**greekislandgirl** · 07-19-2011, 10:31 AM

I wonder if the 22 yr old with the Platinum Plus VISA would feel any less good about using the card if he knew how many other people also have a Platinum Plus VISA. And that the banks are twisting themselves in knots trying to come up with the "next step up" after Platinum Plus (because "gold" used to be the big deal). Maybe it will be the Platinum & Diamonds card? Who knows. I just got my renewal debit card, and even that thing is called Platinum. Why on earth is a debit card "platinum"? It's my money for goodness' sake!

**mndtrp** · 07-19-2011, 06:41 PM

It doesn't surprise me at all. Kids get out from under their parent's thumb, less responsibility, and all of the cool things they can buy, it's easy to see how it would happen. Even if they aren't really buying anything spectacular, simply spending a few years not working will saddle someone with a lot of debt.

My father spent a great deal of time talking about how nice it was not being in debt. He was pretty frugal, and he taught me a lot about how interest and debt worked, although I don't remember him touching on credit scores much. I took this info with me to college, which I was fortunate to have saved enough to get out without debt, but I worked while I was in college. My friends were partying most nights, while I only got to party one night a week. One night was plenty. Once I got out of college, my father cosigned on a platinum card (woooo! platinum!), but his teachings kept me in check.

I don't feel like there is enough personal finance being taught in school. The most we had was balancing a checkbook. While I was lucky to have my father pick up their slack, which I would hope that most parents would do, the fact is that there are a lot of parents who don't. They may not know themselves, or simply don't care.

**Spirit Deer** · 07-19-2011, 08:05 PM

We were sent a 'gold' card years ago. It was an 'upgrade' we didn't ask for, but we had been customers in good standing for years with that particular card company and I guess we had 'earned' it or something. It took us a few years to realize a 'gold' card was considered something special. That's how unimpressed and unconcerned we were and are with that kind of marketing nonsense.

We raised our kids to shop secondhand, DIY, and all the frugal tricks we knew, which are many. We modeled doing without until we could afford things, and all that. The instant they moved out, they forgot everything we ever tried to teach them. Stupid on their part, but we did our part. You can't teach the willfully ignorant.

**Luv2BeFrugal** · 07-19-2011, 08:34 PM

Wow...just wow...that is twisted and frightening.

**greekislandgirl** · 07-20-2011, 01:47 AM

mndtrp:

I don't feel like there is enough personal finance being taught in school. The most we had was balancing a checkbook. While I was lucky to have my father pick up their slack, which I would hope that most parents would do, the fact is that there are a lot of parents who don't.

I agree with this 100%. We had the checkbook balancing lesson in 8th grade civics class and that was it. I think we spent a day or two on it. Nothing else was deemed necessary. The word "budget" was never used in school except as a sort of nasty word that the teachers used to blame the School Board for problems, "it's not in the budget," "the budget was cut again this year." Nothing ever to make a kid want to have a budget, whatever the heck that could be!! Of course it's the parents' responsibility to teach this stuff, but I agree that many don't, maybe because they don't have the skills and knowledge themselves.

Originally Posted by Spirit Deer

We raised our kids to shop secondhand, DIY, and all the frugal tricks we knew, which are many. We modeled doing without until we could afford things, and all that. The instant they moved out, they forgot everything we ever tried to teach them. Stupid on their part, but we did our part. You can't teach the willfully ignorant.

Spirit Deer, if your kids are anything like I was, they'll temporarily ignore your lessons but they'll come back to them in their own time. That's what happened to me. My parents raised me to be frugal and careful with money. When I got out on my own, I didn't apply what I had learned, although I had indeed learned it. I applied it later, after going through an initial phase of not really understanding how personal money management applied to me. Luckily I didn't fall into the credit card trap that my brother did (but he worked extremely hard and got out of it and now doesn't use credit).

I think some of this can be a reaction to over-frugality on the part of the parents if the child sees it that way. Due to my parents' frugality, I traveled once in my life before leaving home. Once on my own, to my parents' bafflement, I traveled a great deal ($$$$) until ultimately I ended up living abroad. Never doing it turned it into "the holy grail" that I just HAD to do.

**mndtrp** · 07-20-2011, 04:44 PM

Originally Posted by greekislandgirl

The word "budget" was never used in school except as a sort of nasty word that the teachers used to blame the School Board for problems, "it's not in the budget," "the budget was cut again this year." Nothing ever to make a kid want to have a budget, whatever the heck that could be!! Of course it's the parents' responsibility to teach this stuff, but I agree that many don't, maybe because they don't have the skills and knowledge themselves.

I agree. I wonder if this is part of the reason why so many people are adverse to budgets. It's always used in a negative way, but can ultimately be incredibly freeing.

**MissSeetonFan** · 07-20-2011, 05:45 PM

Good discussion!

We never had a how to balance your checkbook class. We did have an econ class in high school but what does that really teach kids. GDP, stock markets, supply and demand. That is useful information for the macro but not the personal economy.

**scrap_candles** · 07-22-2011, 12:25 PM

we only had the balance the checkbook lessons if you took accounting but many didn't. Our highschool now REQUIRES a personal finance class as a graduation requirement. I think thats good but haven't seen what they teach in the class yet so I don't know. They also offer two other financial management classes which I told my ds that he was taking.