Our college group at my church was traveling to invest in some children at a missions project during the summer, and I was driving one of the vans full of students. I had just finished reading Dave Ramsey’s, The Total Money Makeover, and I was befuddled at some of the stats I read. I polled those riding on the van and asked them how much of a stress factor was the area of finances in their lives. I was baffled. Some students already had student loans way into the tens of thousands of dollars. Accompanying that debt, many of them had accumulated thousands of dollars of credit card debt due to spending money on anything from Japanese food, Old Navy, and rent payments.
I investigated further. The average college graduate leaves college with approximately $20,000 in student loans and a staggering $4,000 in debt stemming from credit card purchases. Due to this immense debt, college students have a substantially less net worth than people their age fifteen to twenty years ago. More young adults are also postponing getting married and having children all because they are overwhelmed with their debt. When the Pew Research Center polled to determine the number one item causing stress in the lives of 18-25 year olds, they found that finances (debt, spending, etc.) was the number one answer for 30% of those polled topping relationships, family, education, career, and the uncertainty of their future. Over 80% of college students graduate with credit card debt even before they have been offered a job. Currently, 19% of Americans who file bankruptcy are college students.
I see the stress money brings on college students while they are still in school, but you are going to have to trust me when I say that you haven’t seen anything yet when it comes to financial pressure. When you leave college, the stress becomes much worse when all those bills that were in the distant future abruptly become a present reality. I want to save you from making some mistakes that literally could cost you the rest of your life. Even if you don’t see the need now, if you put into practice some of the following biblical principles into your finances, you will be able to give God glory through every spending decision you make.
The first major mistake that college students make concerning their finances is that they spend money that they simply don’t have. From taking out student loans for major purchases to running up credit card bills for minor purchases here and there, college students are targeted to spend money that is not present. Ask yourself a question: why are financial institutions so eager to get college students to commit to their organization if college students are so broke? Why don’t they seek out people with jobs and a good amount of money? In the long run, they make more money off of people like you who don’t have the financial resources to settle debt quickly.
Today’s tip: don’t spend money that you don’t have. If you are in debt, start working your way out. Pay down the debt you have. Pay more on it than the month’s minimum payment. Completely pay off the lowest one, then apply all that money to the next debt and keep going so you can be completely debt-free.