So You're Young and in Debt, Now What?

There comes a point in everyone’s life where whatever money we have is just not enough.

Particularly when we hit post-secondary education, marriage, home-ownership, parenthood, grandparenthood, and the list goes on and on and on.

But being young, we’re at an advantage. Except of course when it comes time to pay the exponentially growing cost of tuition.  Believe me when I tell you that school debt is just the least of your worries.

In fact, school debit is considered “good debt”, according to money guru Gail Vaz-Oxlade. With such low annual interest, we’ve got other things to worry about. Like those evil credit cards that carried the cost of our textbooks, ridiculous hourly rates for parking, and maybe an outfit…or three.

Here’s a little anecdote. When I turned 18, my mother suggested I start building credit for myself. When I applied for a credit card, the bank asked me if I was going on to post-secondary education. When I informed them I was beginning university that September, they gave me $5000.00.

Do you see anything wrong with that story?

Nothing?

The problem is that I said, “the bank gave me $5000.00”, instead of “the bank lent me $5000.00”.

And that, precisely, is the problem with young people and debt. The reality is that too many young people view credit as part of their income; money that was given to them. We forget that while we might have all this money available to us today, we’re going to be paying that back tomorrow, and the day after, and the day after, and the day after that.

If you’re young and in debt, here are a few pointers on how to not let debt consume you.

Start saving as soon as possible.

Its important to get into the habit of putting money away, even if you are currently in the process of paying off debt. Some people’s logic is to pay off debt first, then start saving. This sounds like a great idea, but we are all prone to unexpected expenses, and without an emergency fund, we end up using credit for emergencies! That often lands us right back where we started.

If you can put away just $25 or $50 every paycheck you’d be surprised what you would have in just a few months. While saving for the first time can be very hard, you get accustomed to living on a few bucks less each time. Chances are, this money would have been spent on frivolous things like McDonalds or drinks at a party.

Tip: Have a set amount of money automatically deducted on your payday and put into a separate account so you won’t have to depend on your self-discipline.

      Come up with a realistic repayment plan.

Going online and doing some number crunching helps to map out what your repayment future will and should look like.  With a credit card cost calculator, you type in the total amount owed on each credit card, along with the annual interest rate, and the calculator will tell you how long it will take you to pay off using your minimum payment, and then it will tell you how long it will take to pay off using a different monthly payment.

If you have an idea of how long you want to give yourself to pay it off, you have the option of entering how many months you intend to pay your debt off in. It will give you a monthly figure, and if you can work that into your budget, you’ll be debt free in as short as you will allow yourself to be.

Tip: For a good credit card calculator, try: http://www.debtcanada.ca/budget-calculators/credit-card-payment-calculator

 Don’t worry.

Debt can be a pretty scary thing, but letting it intimidate you and stop you from living your life is pointless. Instead, be proactive about your debt. Challenge yourself to get it paid off in one year or two years, or however long you need.

If there’s anyone who knows the sacrifices that must be made in order to pay off debt, it’s me. Remember that $5000.00 that the bank gave me? I’m still paying it off 4 years later.

The first two years were the hardest because I was so down and out about being in debt that I ended up drowning myself in my own misery. But after doing a lot of research on money-saving, I felt a little more empowered to take a different approach to my debt.

Perhaps the highlight of my financial life so far was when it came time to renew my credit card earlier this month. I kindly declined the bank’s offer to reactivate my Visa for another four years.

It was a hard decision to make, especially when the voices in my head kept asking questions like, “But how are you going to pay for parking?” and “How are you going to buy stuff online?”

But I made it anyway.

Tip: Never miss a minimum payment on a credit card! No matter how much debt you have, if you can prove you are responsible enough to make your monthly minimum payment on time, your credit rating will not be jeopardized by the money you owe. All the bank wants to know is that they are still making money off of your minimum payments.

The stress that can come from not being in good financial standing can do a lot of wear and tear on our bodies, our minds, and our overall wellness. But being in good financial standing doesn’t mean not being in debt.

It means doing something about it. 

5 Happy Habits

Fortunately, 90% of my life is spent in a state of absolute happiness. Unfortunately, when other people ask me what my trick is, I don’t really know how to explain it.

I’ve comprised a list of my top 5 "happy habits". They might take a while to become habits, but they do have an immediate effect. For me, at least.

Start mornings right.

I take an extra five minutes in the morning to tell the universe how my day is going to go. Because I am the boss. I say things like “I am happy”, “I am loved”, “I am divine”, and especially, “Today will be a good day.”

To think that someone sits in their bed and says these things out loud first thing in the morning is totally absurd. But it always seems to be the most asinine things that have real results. Try this the next time you wake up and see how much positivity you can muster up in just the first few minutes of your day, furthermore, the lasting effect it has on the rest of your day!

Rock out in your car.

I believe in being that person at the red light going crazy because whatever song is on is the best song in the world. Specialize your playlists, choose your music wisely, and don’t be afraid to walk to the beat sometimes.

Personally, I don’t listen to sad songs. I like to leave those for funerals and the first 5 minutes after a break up until you realize life goes on. I’m very cautious of what slow songs I listen to, and for the most part, a lot of (if not all) of the music I listen to is upbeat, fast with meaningful or inspirational lyrics, or just puts me in a good mood.

If you're wondering who I've got in my playlist, it's a fine mix of Sara Bareilles, Corinne Bailey Rae, Kelly Clarkson, Katy Perry, Nelly Furtado, and a few men. Occasionally.

Keep to-do lists.

I started keeping a to do list when I was in high school because I found myself making “mental notes” in my head of things that needed to get done that never quite got finished.

I read about a study that scientifically proved the feeling of satisfaction and accomplishment that comes from the act of scratching something off a list. So I made an arts and crafts project of it and got a decorative notepad. On it, I would write down the smallest tasks like vacuum my car, or send an email. Sometimes the tasks were much larger, like booking a flight ticket or looking at new cars. Big or small, without the proper motivation, it’s hard to get them done.

Verbally communicate with yourself. Like, out loud.

Self-communication is one of the most rewarding habits. First it teaches you how to be comfortable with yourself. The more you talk, the more you have to say, and before you know it you’ll be talking about things you didn’t even know were on your mind, but sure feel good to let out.

Secondly, it teaches you to listen to yourself, and truly understand what it is your inner self is trying to say. Get in the habit of turning down your music (when you’re not rocking out in your car), and turning up your voice.

Be appreciative.

I always wonder how I can be so happy without even really having lived yet. I’m only 21, I’m still in university, and I’ve only travelled once. While some adults might think that the reason I am so happy is because I haven’t experienced the “real world” yet, I beg to differ.

I’ve learned the value of what I already do have in my life, so much that when I’m actually out there in the real world with things that bring me true happiness (my career, my children, home ownership) come in to my life it will just be an added bonus.

I believe that my experience in the “real world” will just be an elevated feeling of what I already feel. Sure, the reality of debt and job loss and stresses of home ownership and a sickening load of other haunting ideas are out there, but until I get there, my attitude remains unchanged, and will probably remain unchanged even if I find myself in the face of those realities. 

To be honest, I just have this crazy gut feeling that my future will play out just as my day does when I wake up in the morning and tell it how to go. 

Because I find happiness in the smallest, most minuscule things. Sometimes it doesn’t even have to do with me. Seeing other people happy, remembering something that makes you laugh so hard your tummy starts to hurt, a day where your make-up or hair turned out just as you had hoped, maybe even better, or sharing a moment with a stranger you might never see again.

There is a line in a Sheryl Crow song that sums this up perfectly. “It’s not having what you want; it’s wanting what you’ve got.”

Ultimately, we make of our lives and ourselves what we are able to. Our ability depends on the power we believe we have, and our belief in that power depends on our ability to see beyond just being human. And if being human is really all that we are, then you look around at the world we've created and tell me that isn't enough.