A lot of people in their twenties are in debt.  


This is probably due to student loans more than anything else, which is understandable, since college degrees are getting quite expensive to obtain. I've mentioned it before, but my parents paid for my college education and I couldn't be more thankful for that. (thanks, Mom and Dad! love you!)


I didn't realize how lucky I was to start my adult life with no debt.


The thing that scares the living daylights out of me is that many people in their twenties (or thirties...) don't even seem to care that they're $10k, $20k, $30k (OR MORE) in debt! They still go out and party every weekend, buy overpriced drinks at the bar, they pay for cabs, fancy clothes, and they go to restaurants for every meal.




One of my favorite quotes on this subject comes from the great Mr. Money Mustache:  New Flash:  Your Debt is an Emergency!! He discusses this phenomenon where people complain about their crippling debt but continue to buy fancy bottles of wine and video game systems. This is exactly what I've been noticing with people I know who are in debt. Sometimes I just want to yell, "YOUR DEBT IS AN EMERGENCY!" but somehow I don't think that would be well received... ;)


Why don't people care about their debt??


Maybe it's because people don't see their peers paying down debt.

I think I know quite a few people with student loan debt, but I could never prove it because I've never heard them talk about it. You better bet that if I was thousands of dollars in debt, I would always be saying "oh, sorry, can't go out tonight because I want to save some money!" but I never hear anyone say that!

So here's my thought:  I bet people in their 20s or 30s with debt don't hear their peers talking about it, so they assume that no one else has debt. They might be embarrassed about it, and therefore try to hide their debt and match their friends' expensive social lives, which pushes them farther into debt.

When Mike was paying off his loans (side note: have I ever mentioned that he paid off over $30k in student loans by age 22? Yeah, he should be writing this blog, not me!) he encountered multiple friends who legitimately tried to stop him from paying his loans! He would turn down invitations for lunch or dinner plans, explaining that he was trying to save money to pay off his loans.  His friends would say things like, "Why are you paying those off already? You've got years to do that!".

Uhhh... what?! I cannot even believe people (who were older than him, mind you) were telling him to STOP PAYING HIS LOANS! If that is the general consensus about student loans, no wonder so many people are in debt for so long!



Maybe it's because people don't realize how much interest is accruing.

Another factor might be general lack of knowledge about loans.  If you set up autopay on your loans and never log in to check the balance, you might not realize that a majority of your payment is just going towards interest- and that you have barely even reached the principal!

Mike said his turning point was when he logged in to his account and realized that ~$1,000 IN INTEREST had accrued since the last time he logged on.  He instantly realized what an emergency his debt was, so he threw all his money towards paying down the loan as quickly as possible.

But what if people never do that? What if people just go through life paying the bare minimum, and they never realize how much they're going to end up paying in interest? If we treat loans as part of every day life, we'll never stop to realize how much we are actually paying.



Maybe it's because 20 year olds are so focused on the present that they don't care that they're screwing over their 30 year old selves.

One of the big assumptions about 20-somethings is how self-centered we are. As a whole, I think that could be kinda true. We're really focused on the here-and-now and not so much on our future life. (and that's not a fault of our generation in particular, I think that's just how most 20-something's brains work!)

When I was graduating college at 22, I'm pretty sure I couldn't even imagine life as a 30 year old. If I had student loans at that age, I probably would have paid the minimum monthly payment and said something like, "I can pay the rest when I'm older."



Maybe it's because people just don't have the money.

Then there's the easy answer- what if people can't scrape together the money to pay down their loans? There are many people who just don't have the extra funds to be able to put more money towards their loans.

If you fall into that category, never fear. I'm a strong believer that with a little dedication, you can change your spending habits in order to free up more money to put towards debt repayment. Building a budget is a great place to start!



What do you think? Why isn't debt repayment a big focus for twenty-somethings?