Prevent Another Financial Crisis – Start Managing Your Credit Before You Hit the Workplace

Many Americans start assuming debt way too early, as many graduating college students are saddled with over $20,000 in student loan debt alone. Add on consumer/credit card debt, and the average college student can be $25,000-35,000 in debt before he/she gets his/her first full-time job. This kind of debtor mindset is what helped to create the uneasy alliance that many Americans have with credit. Now, I would usually agree that the debt for one’s education is a worthwhile endeavor in many instances. However, even this notion should be explored and not simply accepted as fact.

I believe that prior to choosing a college, parents and students should design a long-term personal finance roadmap that not only addresses the academic and professional pros and cons of attending a particular institution, but also the potential long term financial ramifications of the debt they will be taking on as it relates to the soon to be student’s future financial well-being. Weigh all aspects evenly and then determine which institution best fits into that long-term roadmap. For many college graduates, a large student loan amount will be a burden that will negatively affect their financial standing well into adulthood, forcing some to rely on credit cards as the primary means of meeting monthly expenses. The problem with this way of life is that this practice has become far too commonplace in America, and is a major reason why we are in this financial crisis. Somewhere along the line, America’s mindset went from cash is king to credit is king. The notion of saving had vanished until only recently, as the new mantra became “charge it.”

So, I challenge you today to change your attitude, thinking, and behaviors toward credit. But we can also start with our young people before they get into the workforce, which is why we should target our efforts at America’s college students (our next generation of consumers).