When we hear the word debt, it makes us all groan. With the costs of living and higher education skyrocketing, many more young people are faced with crippling amounts of debt before they even graduate school. Good Trouble stars Cierra Ramirez and Maia Mitchell teamed up with ATTN: for a video that talks about the harsh reality of millennial debt and how society needs to change so young people are better prepared for all the financial responsibilities that will come their way:
Here are some of the most important points in the video:
- Our Culture Teaches Young People to Spend in Order to Survive
As previously stated, the costs of living and higher education are skyrocketing. We are stuck in a cycle that tells us we have to spend money to make money, even if we don’t have the money to spend. So how are many of us able to afford going to a four-year college, graduate school and a place to live? “That’s where lenders step in!” Mitchell says. To put it simply—loans, loans and more loans. “We’re taught to believe that credit cards and loans are a natural part of adulthood. But without responsible financial planning, they can cause just as much harm as good.” Loans put us in debt before we even have the chance to start earning a salary and have a career. This is a cycle that has to be broken.
- Financial Literacy Is Key
“Two-thirds of American adults can’t pass a basic financial literacy test,” says Ramirez. This is an alarming statistic that shows the American education system is failing us. Even before I graduated high school I’ve heard the concerns of other students saying they knew what the Pythagorean Theorem was, but had no idea about a car note. “Do you know what I do every year? My taxes. Do you know what I don’t do every year? Chemistry!” SAME, Maia. Schools need to do a better job educating the youth on how to be a financially responsible and literate adult. Without the right tools, we cannot succeed as an economy and as a generation—especially if everyone is crippled with debt.
- Be Comfortable with Talking About Money
Money problems and financial difficulties have long been something that we do not like to discuss. But it’s important that we are open and honest with ourselves, and each other, about our current situation and financial goals. “[It’s] one of the proven ways to make it better,” Ramirez says.
- Cash Budgeting is a Great Strategy
Not sure how to go about improving your financial situation? Learning to budget your income is vital in being financially successful. So what is cash budgeting, exactly? “That’s where you figure out how much money you can actually afford to spend after you handle your major expenses, like rent and utilities,” Ramirez explains. “Then, you set the rest aside in cash for spending or saving.” This is a great first step to learn more about your spending habits, your fixed and variable expenses, and where exactly your paycheck goes. It’s also a matter of being secure, and knowing you put enough aside to be able to pay all your bills.
The video is a very relevant reminder to all that being financially literate and responsible is crucial in becoming an adult. There are many methods and strategies available to getting on the right track. “No matter what you choose, you can’t learn to budget for your future, until you understand your financial present.”