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Youth Culture Window

Living in the Red
Many Young People Buying into Debt
An article from David R. Smith at

Martina said, “My student loan is $79,000. I have credit card balances that total almost $4,000, and a $320 car payment.”

Martina’s a married professional, right? Nope, she’s a college junior who still doesn’t have her four year degree.

Starting Off Behind the 8-Ball
I remember literally wincing when she said that to me. In all honesty, I found the staggering numbers of my friend’s personal debt hard to believe. I quickly ran the figures in my head, trying to determine when she would pay off her debt given the average salary of people in her chosen field (of ministry).

Small salary, minus principal times interest, carry the one, equals...the day after Armageddon!

Her situation prompted me to research young people’s finances. Granted, her predicament is extreme and not representative of her peers, but there are millions of young people her age who are thousands and thousands of dollars in debt.

For instance, CNN reports that the average college student graduates with about $21,000 in debt these days. Nellie Mae, one of America’s largest providers of student loans, estimates that the average undergraduate student has $2,200 in unpaid credit card debt. (That figure swells to $5,800 for graduate level students.)

That payment on the laptop from BestBuy…plus the car payment…plus textbooks…plus the credit card statement from the Spring Break trip to Cancun is adding up and many young people can no longer pay the “balance due.” Credit card companies have a term for spenders who do not (or cannot) pay off the balance each month: revolvers. This “buy now, pay (more) later” attitude is taking its toll on lots of young people who are financing their future.

I gotta ask, “Where did these kids learn their spending habits?”

The Money Woes of Mom and Dad
We don’t have to look very far to find the example college students and young people are following when it comes to debt; in most cases, it’s their parents (although, our government isn’t exactly a role model either). When parents model an unhealthy sense of entitlement that leads to debt, more often than not, children get permission to mimic those financial tactics.

Consider this. The average American family’s credit card debt has risen from $2,966 in 1990 to $9,840 in 2007. This is strictly credit card debt and doesn’t take into account a car payment, home mortgage, etc. This level of debt is accrued because 43% of American families spend more than they earn each year.

It sounds as though many Americans rely on debt to afford their lifestyles. In fact, when asked about the necessity of debt, 91% of Americans believe that debt can be controlled by disciplined saving and spending, but 72% also believe that debt is a part of modern life and difficult to avoid.

Is It Possible to Live Debt Free?
At this point someone may quote the verse, we “can do all things through Christ Jesus.” That’s what the Apostle Paul said in Philippians 4:13 – one of the most famous verses in the whole Bible. Ever wonder what he said in Philippians 4:12?

“I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want.” This attitude doesn’t describe very many Americans today, Christian or not. Those who can’t afford to “live in plenty” have the option of financing that lifestyle…until the bottom falls out. Then, even more of the Bible’s words ring true.

“The rich rule over the poor, and the borrower is servant to the lender.” (Proverbs 22:7)

Andrea Alba has learned that lesson well. Like so many other 19 year olds, she has dug herself into a financial hole that three jobs can’t lift her out of. “I just want to pay everything off,” she says. “I wish I didn't have to struggle so much.”

Making Cents of the Madness
Regular readers of our Youth Culture Window may be asking themselves, “Why is this article focused on twentysomethings when it’s supposed to be focused on teenagers?” Here’s why: those future “revolvers” who are swamped in debt are currently sitting in our middle school small groups “debt free.” If we want to keep it that way, now is the time to teach and train them on how to avoid debt. Here are a few ideas.

  1. Teach the risks associated with debt. Granted, in our current economy, lenders aren’t exactly lining up to pass out plastic. However, when the economy turns around (eventually), we will all start receiving credit card applications in the mail again. Now is the time to help our teenagers understand the potential risks of “signing on the dotted line.” Besides the usual high interest rates, there is also the potential of fees and penalties that lending agencies pass along to unsuspecting consumers. Any interruption or decrease in income makes these liabilities all the riskier. (Since specializes in providing high quality resources for free, here is one on greed, and another on materialism to help you teach your teens such an important lesson.)

  2. Show them what living without debt could look like. Any parent can have this conversation with their child, whether in debt or not. If parents are in debt, they can talk about the things they could be doing, were they not making monthly payments. “We could buy….” “We wouldn’t have to ….” Parents who are not in debt get to have the same conversation, but from a different angle. “Because we are not in debt, we are able to…tithe, play, own, etc.” No parent wants his or her child to wind up in debt, especially if they are in debt themselves. Take your situation, no matter what it is, and turn it into a private lesson for your children.

  3. Model responsible spending habits. Not everyone agrees on the issue of debt. Some people see debt as a tool offering families financial leverage; others see it as a tool of the devil, trapping families in bondage. Regardless of our beliefs, we must teach our children the “why” behind our spending. Doing so will help our children break ranks with the 43% of adults who routinely spend more than they make. A discussion on “responsible spending” should definitely include talking about the difference between using cash or plastic…even when you can afford the purchase. There are well-documented studies that claim we spend more when we reach for plastic instead of cash.

Let’s be thorough and honest in conversations with our teenagers. “Finances” touch on so many areas of life; we must place a high priority on these discussions. Who knows? We may help our kids learn to live in the black, instead of the red.

David R. Smith David R. Smith is a 15-year youth ministry veteran who helps youth workers and parents through his writing, training, and speaking. David specializes in sharing the gospel, and equipping others do the same. He co-authored his first book this year, Ministry By Teenagers. David provides free resources to anyone who works with teenagers on his website, David resides with his wife and son in Tampa, Florida.

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