Thursday, January 13, 2011

Erasing the Gen Y Debt Burden

Unfortunately, much of my recent posts have been regarding things that millennials are "doing wrong" when it comes to saving and investing. I've noticed that most Gen Y's who have poor saving and investing habits are in such a predicament because their parents may not be great savers. The old saying "the apple doesn't fall too far from the tree" is quite true when it comes to successful saving and investing habits. After all, young people are quite impressionable and even leading up into our college years when we crave independence, many of us still look to our parents for signs of successful money management.

With that said, if you have manageable credit card debt - and 38% of Gen Y does - start paying it off! The time to do it is now, while you're still young. The worst thing in the world you can do when it comes to paying off your debts is to wait.

Even better, pay off your debts in full, if you can. While that may seem unrealistic and come at the sacrifice of immediate savings and investing goals, remember that you have plenty of time to work towards your investing goals and you will be much better off having gotten the debt burden off of your back.

After all, interest costs will ultimately grow exponentially if credit card debts go unpaid or if you continue to just pay the minimum payment each month and then any future earnings you have will likely go towards paying off your creditors. This is a sad situation that many millennials face but it shouldn't dishearten you from an investing perspective. Once the debt burden is erased, begin to focus on investing your money and you will feel so much better knowing the specter of a credit card company is no longer in your rear-view mirror.

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