Money Management 101: Students Learn to Avoid Debt
Artwork by Mariana Vargas
By DAVID ARAGON
It is during senior year of high school where many life-changing decisions are made. Perhaps the most important decision a highschooler can make during their senior year, is whether or not they want to go to college, and if they choose to do so, whether they should pursue a public or a private education. College in the United States has been known to be extremely expensive. In fact, it is one of the main reasons as to why many Americans end up in debt.
According to TIME magazine, the average college graduate comes out with $37,000 in student loans, and two million students, graduate with over $100,000 in student loans. With that being said, teens are starting to feel all the more pressure to make wise decisions in order to avoid becoming part of such statistics.
Financial literacy is the ability to understand effective financial planning, proper debt management, and budgeting. Unfortunately, many adults don't invest their time into learning more about their personal finances. In fact, this can be seen by the amount of Americans that have accumulated debt over the years.
Statistics show that the average American credit card user has four credit cards, all of which have an average household debt of around $8,398. Being that adults have such a bad history with debt and finances, many argue that given these generational patterns, the youth may eventually end up in the same positions as their parents. Although this pattern in statistics is seen, not much is being done to change it by the highschool educational system. According to Forbes, only 17 states in the entire United States require highschool students to take at least half a year of personal finance class as a graduation requirement. Because of this, many teens have resorted to gaining financial literacy through the internet, more specifically, through the YouTube platform.
The rise of YouTube has brought an emergence of videos regarding financial independence, investing, debt, and passive income, all of which are crucial parts of financial literacy. Creators and such as Graham Stephan, Gary Vee, Dave Ramsey, and channels such as Debt Free Millennials, and The Financial Diet, have recently become some of the most viewed videos on the Internet. These channels offer a glimpse of how life can be without debt, how one can invest, and how one can establish a budget according to personal income and needs.
“I especially research college loans and watch content creators on YouTube such as Dave Ramsey, because I don't want to make a mistake when it comes to student loans said Alexiz Aguilar 21’. It lays out the potential risks I can face, if I decide to take out any type of loan for educational purposes. So far, I feel like these videos have become one of the best resources available”.
So, whether you are a junior in the process of choosing potential private and/or public schools to apply for, or a senior getting ready to accept a college offer, weigh out the pros and cons of that school in a financial standpoint, and think about the effect it can have on your financial future.
Ask yourself: How much does the school cost, and can I afford it? What is the average increase in tuition, and when are tuition increases next expected? If living in a dorm, how much is the expected cost of room and board? Will there be a need to apply for an on campus or off campus job to support daily living expenses? What is the average interest rate on a loan if I were to have to take one and approximately how many years will it take me to pay it off?
These are just a few questions one should ask themselves before accepting a college offer/acceptance, in order to have better access to financial independence in the future and not become part of a statistic in regards to debt.