2067 Young People in Debt

This morning I read a book review of Tamara Draut's "Strapped." Draut says that today's young adult children of the baby boomer generation can't get ahead financially because of astronomical student debts, depressed wages, rising health care costs and soaring property values. The solutions offered by some young adults are silly and counterproductive--"the government should do something."
If I've heard it once, I've heard it a hundred times, "things aren't like they were in your day." I agree. We had it much harder, thank goodness. We started married life with an 8 year old car and eventually went on foot and bicycle when the car died. But our parents, who had been teens during the Depression, thought we had it easy--and frankly, so did I.

I believe there are a few basics that still apply, so I'll just jump right in on Ms. Draut's coat tails. So if your mama was a baby boomer and went into debt or worked two jobs to give you everything you asked for rather than what you actually needed, you may just have to go back to grandma's methods if you want to turn this around in your generation.

1. Postpone your wants and take care of your needs.

2. Tithe your gross income to your church or synagogue.

3. If you have two incomes, save one and live on the other for month to month expenses. Use the "other" account for new tires, a leaky roof or a health emergency, but if you're using it to buy groceries and movie tickets, you'll never get ahead.

4. Borrow money only for a home mortgage or car loan.

5. Pay off all credit cards in 30 days to avoid charges and interest.

6. Never put groceries on your credit card. If it won't last until the bill comes, don't put it on the card.

7. Buy less house than the bank says you can manage. Instead, go for the best, safest and most convenient neighborhood you can afford. Same for renting if you are still in that stage.

8. Children get very little from fancy vacations that they can't get from something closer to home. It's your time they want. Take them to a state park, family farm or the local amusement park and save the tours or cruises for "couple time."

9. NEVER let the children see or hear you obsessing over brand names, styles and models, whether it's clothes, cars or appliances. Don't take them to the mall as an event.

10. Meals will cost you either time or money. If you can contribute your own labor you'll save a lot of money, fat and sodium. Save eating out for "date night."

Here's two tips about the English language: SALE is a four letter word that means SPEND, and CREDIT is a six letter word for DEBT.

Ms. Draut's testimony in 2004 for Demos (a liberal think tank) before the Subcommittee on Financial Institutions and Consumer Credit.

Strapped
personal debt