Personal Finance in Your 20s & 30s For Dummies
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For a number of years now, it has been argued that young adults are under pressures that lead them to dig deeper into debt than prior generations. The reasons cited for this generational debt have typically included
  • High costs of college: Annual increases in the costs of a college education have far outstripped the increases in general prices of other products and services. The price of some private colleges now is nearly $70,000 per year!
  • Stagnating incomes and job prospects: Most industries and companies compete in an increasingly global economy. And, the Internet has undermined and disrupted numerous retailers and other industries, causing incomes in those businesses to stagnate.
  • High housing costs: The 1990s and most of the 2000s saw rising housing prices, which priced many entry-level buyers out of their local markets.
  • College campus credit-card promotions: The availability and promotion of credit cards is a big problem. Credit cards are tempting to use during college when your income is minimal or nonexistent. On many college and university campuses, banks are allowed, through payment of large fees to the educational institution, to promote their credit cards. This practice and credit cards offering rewards are getting more and more young adults hooked on credit cards at younger ages.
  • More temptations to spend money: Never before have so many temptations existed for spending money through so many outlets. In addition to the ubiquity of places to shop both nearby and online, people are bombarded with ads everywhere.
Most of these reasons for incurring generational debt are valid. However, take a look at both sides of the Internet revolution. While it's true that the Internet and associated online companies such as Amazon have disrupted many businesses and industries, consumers who know how to shop wisely have often benefitted in terms of having more goods and services conveniently available to them at lower prices. Also, many technology-related companies have grown and expanded and been able to pay their workers well.

You may encounter some or all of these debt traps during your 20s and 30s. Remember that you'll always face things in life that you can and can't control. If you're aware of these land mines and can discern the difference between what you can't control and what you can constructively do to contain your spending and debt, then you're on the right track. If certain venues or situations or people tempt you to overreach, then avoid them.

About This Article

This article is from the book:

About the book author:

Eric Tyson, MBA, is a renowned finance counselor, syndicated columnist, and author of numerous bestselling financial titles.

Tony Martin, B.Comm, is a nationally-recognized personal finance, speaker, commentator, columnist, management trainer, and communications consultant. He is the co-author of Personal Finance For Canadians For Dummies.

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