Friday, December 26, 2008

Living Beyond Your Means

It is easy to whip out the credit card and charge your purchases. But, is is smart? Not if you are carrying a balance from month-to-month. Many of the bad spending habits start in college. I beg you, if you are a college student, to get a budget going and stick to it. Why? For these reasons:
  • If you get into credit card debt in college you most likely won't get out of it anytime soon.
  • The habits you start now can carry into the rest of your life - good or bad.
  • Stewardship of your money is very important. The money isn't your own, it belongs to God.
  • Living beyond your means is a bad way to go through life. Debt handing over your head can be stressful and keep you from being able to purchase a home or save money later.
  • If college students aren't a cash cow for credit card companies, then why would they give you free stuff to sign up? Why are they constantly sending you junk mail? Why are you their #1 target audience?
So, just say no to credit cards.
If you can't pay for it in cash - say no.
If you can't afford it, you don't "need" it - even if you really want it.
Otherwise, you will join these statistics:
  • The average credit card debt owed by college students is about $2,700.
  • About 10 percent owed more than $7,000!
  • Students held an average of three separate credit cards
  • 78 percent of students had at least one credit card
  • 32 percent of students had four or more credit cards
  • 95 percent of graduate students carried credit cards
Think of it like this. If I told you I would pay for your $500 computer and you just have to pay me about $10-$20 a month - with small interest rate of 15% - it will take you 74 months and you will have paid me $258.03 in interest.
Good for me - bad for you. That is just the beginning. Credit card debt is stupid.

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