Living with credit, Protecting yourself

Worry about debt and don’t go broke in your 20s

Sienna Kossman

If you’re in your 20s, stress out about your debt and don’t go broke.

That may sound harsh, but I am responding to a recent Washington Post column titled, “Don’t stress about your debt. Go ahead and go broke in your 20s.”

The column was written by Kim Chi Ha, a woman in her early 30s who spent her 20s broke and using credit cards to support a lifestyle she couldn’t afford. Ha writes of using lines of credit lenders trusted her with to float plane tickets and bills. One time she nearly maxed out a credit card to pay a speeding ticket, but then flew to a Vegas bachelorette party shortly thereafter. She borrowed money to fund basic living expenses and numerous vacations. Sheesh!

After struggling to find work in her field of choice, Ha prioritized living high on the hog over debt repayment. She decided making fun memories was more important than time constraints and responsibilities. That choice resulted in nearly $14,000 of credit card debt after a couple years.

While Ha has since paid off her debt by working extra hours and jobs, she doesn’t regret a single debt-inducing credit card swipe and would do it all over again.

After reading the column, I was dumbfounded. While Ha is older and has more life experience than I, her column, which almost romanticized debt, concerned me. I can imagine some of my 20-something-friends reading her piece and saying, “Yeah! She’s right. YOLO. We’ll deal with the debt later.”

So, before anyone considers following in Ha’s footsteps, I think there are a few things to remember about the financial choices she made:

It’s hard NOT to stress over debt.
Based on her narrative, it seems Ha did not seriously stress over debt in her 20s. While that may have worked for her, ignoring a debt burden is a hard — and unhealthy — practice.

I’ve found even if you’re responsible and paying down as much debt as you can, it’s still hard to totally ignore the numbers hanging over your head. Once my car and student loans are paid off, a huge weight will be lifted off my shoulders, and my bank account. I doubt I’m the only one with such sentiments, and I think that’s pretty normal.

Pushing debt thoughts out of your mind and ignoring them with an, “I’ll take care of it later” mindset, as Ha did, will not only rack up high interest costs, but could also damage your physical health. Even if you’re not conscious of debt bothering you, if you’re suffering from insomnia or stomach aches, it could be from stress you aren’t addressing.

Being constantly broke is risky.
Ha’s spending habits made her late 20s especially tough. It was hard for her to afford even basic expenses such as coffee and gas. However, despite being broke, she still whipped out her card for traveling. A lot.

I’m no stranger to being super broke. While in college, I spent four-and-a-half years eating cheap dinners, having a rarely-full gas tank and working extra hours to try to feel just a little more financially stable. If I had lost a job, I’m not sure what I would have done, which was a scary position to be in. I can’t imagine voluntarily putting myself in such a precarious financial situation.

If you want something, such as a vacation, you can make it happen, just like Ha said, but don’t swipe a credit card without a repayment plan. Or find another way to pay for it — or wait until you’re not so strapped for cash.

Credit scores matter.
Ha makes no mention of how her massive card debt affected her credit scores, but they had to take a pretty serious hit if her lines of credit were maxed out.

Running up high card balances pushes your credit utilization ratio up, which significantly impacts your FICO credit score — especially if your credit gets maxed out. And if you’re young with a fairly short credit history and only a few accounts, keeping credit balances low may be one of best things you can do to build and maintain a decent credit score.

Your credit score may be the last thing on your mind in your early years, but it already matters to many others, such as potential employers, landlords and lenders. A consistently poor score could lead to missed opportunities, high interest rates and even pricier bills. And then you’ll need years of diligent behavior to build your score up. None of that sounds fun, does it?

More debt now, more work later.
While I sympathize with Ha’s resistance to a life that’s all work and no play, using credit to fund frivolity is an unwise alternative.

In fact, the more debt you build up now, the harder (and more) you’ll have to work later. If you’re spending carelessly in your 20s, by the time you reach your 30s when many of your friends are settling down, buying houses and starting a family, you’ll be working as much as you possibly can just to get your debt under control.

You have a “fear of missing out” now? Think about what you can miss out on later. Your 20s aren’t the only “prime” years of your life.

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