Debt Management
What is debt? To me when I think of debt I imagine a giant mouse taking enormous bites out of my cheese wheel (yes I have a strange brain, deal with it). While it is kind of a funny image, it makes sense. The cheese wheel, the money we work for, feeds us, clothes us, allows us to live. The giant mouse is all of the institutions, governments, banks, schools, car companies, credit card companies, landlords, insurance companies, hospitals, friends, grocery stores, gas stations, electric companies, phone companies, internet providers, retail stores, online companies, etc… that we pay our hard earned money to. The more cheese we give away the stronger they all become.
Debt is an important part of life, it allows us to live beyond our means by trading off portions of our monthly income to pay for things we normally can’t buy on the spot. Racking up too much debt is very easy but extremely costly.
Growing up my parents always drilled into my head, “Never spend what you can’t afford.” This was a “do as I say, not as I do” scenario. Before I was born my parents racked up thousands of dollars of debt and it set them back many years financially. It took them at least 3 years to save up to buy a house.
Managing debt is one of the toughest things we will ever have to do and ironically at school we are never taught how to manage it, yet expected to understand it. At Cranston High School East, Community College of Rhode Island, and University of Rhode Island, I was forced to take math, english, history, science, blah, blah, blah. Since money is such a large part of our lives, it would make sense to teach it.
The only time I ever took a class that taught about personal finances was my senior year in high school when I had a choice at what class I wanted to take and decided to take the only available personal finance class. To this day, that class has been one of the most useful classes I have taken, even though it took a few years to fully realize it. While it mostly just taught basic things like how to balance a checkbook (thank you parents)and write a check. The class forced internal conversations to start. I found myself looking at clothes, video games, food, and gas differently.
Like a typical teenager I ignored all of the things I learned, because clearly “I knew better,” and proceeded to spend 95% or more on, stupid things. Most of the time if you asked me how I spent my previous $50, I wouldn’t be able to tell you.
It took me about a year to figure out I was doing it all wrong (glad it didn’t take longer) when I was accepted into URI and no longer had a job. While I didn’t directly screw myself over like my parents did…...I kind of did.
It was the year 2009-2010 right after the big recession started when stocks were really cheap and I keep thinking to myself now, “If I had only invested 25-30% in the stock market, I could have had the best of both worlds.”
TLDR:
Don’t let the giant mouse (people we owe money to) eat too much of the cheese wheel (our hard earned money). Don’t just live in the present, protect your financial future.
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