How Does Debt Change Your Life?

debt

2 Ways Debt Destroys Your Confidence.

If you’ve ever been saddled with debt, then you understand that it’s not just a financial issue – it’s an emotional one as well. And if you don’t keep your mindset in the right place and remember some perspective, it’s easy to feel like it’s taking over your life.

Student Loan Debt

1. Debt is a big fat liar.

Debt tells you that you don’t have enough. Enough money, enough self-discipline, enough reserves to fall back on.

When we reached the happy day without payments due on things we’d bought in the past, we rediscovered that we are a people of plenty. We have enough; we are enough. We can participate in charitable giving happily out of our “enough-ness.”

Our children, like many, squabble over who got more or which was bigger. We answer, “Have you ever found yourself going without? No. We are able to satisfy all your needs. Let’s share this snack/toy/activity thankfully.”

2. Debt can make you lazy.

When you already owe more money than you have, sometimes it’s easier to do the convenient thing than the prudent thing. “Just grab take-out for dinner. What’s a few more dollars?”

Now, I don’t want to give our money to other people for services I can provide myself. I cook more, and find that I’m prouder of myself for planning ahead and improving the nutritive value of our meals (i.e., waaaaay fewer French fries).
– via Money Saving Mom®

Students Suffer, Too

Debt worries aren’t limited to the full-fledge grown ups – students and recent graduates suffer from a life spent under debt as well. Sometimes even more so! It’s all too easy when you’re in school to lose track of how much you’re borrowing with all the other stressors taking your attention. But after graduation it’s a whole different story; your bills start piling up and you realize how much debt is waiting for you.

What happens if your student debt level gets out of control?

You Might Not Be Able To Afford Buying A Home

Student loan debt significantly impacts one’s ability to purchase a home. When Equifax asked millennial renters why they did not buy a home, 55.7% of respondents listed “student loan debt/not enough money saved” as the top reason they were not able to purchase a home. Even if you can afford the monthly payments, putting money toward your student loans might prohibit you from saving enough for the minimum down payment required by many lenders.

You Might Have to Live at Home

While some renters can’t afford to purchase homes, other millennials with student loan debt can’t afford to rent apartments. Across the board, 21.6 million young adults between the ages of 24 to 34 are living at home with their parents. This is a much larger number than in previous generations. Many of these young adults aren’t leaving the nest because they aren’t making enough money to pay back their student loans and also pay rent.

You Might Have a Lower Net Worth

Data from the Pew Research Center reveals disparities among college graduates with student loan debt vs. those without debt. The median net worth of a household headed by a college graduate under the age of 40 with student loan debt is $8,700. However, the median net worth of a household headed by a college graduate under the age of 40 with no student loan debt is $64,700 – which is seven times greater.

Your Student Loan Debt Doesn’t Go Away

Student loan debt is different from other types of debt. A consumer who can’t afford to make car payments can return the car to the dealership. Similarly, a homeowner can hand the keys back to the bank. However, by the time you are in the student loan payback process, there’s nothing left to “return.” The money has already been spent – whether you spent it on school or not. Also, student loans are very rarely discharged in bankruptcy court.
– via Investopedia

Have you noticed changes in your life or mentality since dealing with debt?

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