Debt That You Can Avoid Just like college is a life altering financial decision that will put you into debt, there are other life altering decisions you will be making in the future that may contribute to this amount of debt that are important, such as a purchasing a house. These are a couple examples where debt is to be expected, and with careful planning and consolidating, it is a debt that you can get out of, and should payments be made accordingly, will actually improve your credit rating. However, there are certain decisions that can be avoided that will put you into debt immediately and will make it even harder for you to get out of it. The dreaded CCs As soon as you are old enough to consume alcohol, your first instinct is to get a credit card. Most parents will tell their children not to get a credit card to avoid them getting into debt, but that problem is, in order to establish good credit, which will allow you to purchase a home in the future, you NEED to have a credit card. There is a huge difference, however, between getting a credit card from your bank so you can build credit, and getting a credit card so you can buy things with money you do not have. And establishing a difference between the two is a very difficult thing for many young people to do. The best thing to do is to get a credit card from your bank that only has a balance of a thousand dollars, and do NOT use it to buy something unless you have the money for it. This is a rule that should never be broken, no matter what, because otherwise it will become a “slipperly slope.” If you really want to buy that outfit but you don’t have the money so you think you can worry about it later, pretty soon you will be purchasing a laptop that you don’t have the money for, and before you know it your credit card debt is up to $10,000 at the age of 22. Having this debt in addition to the college loans you already have will only put more pressure on yourself and make it that much harder to get out of debt.  Stay away from credit cards that have a balance of $10-20,000 because it will make it that much more tempting for yourself to spend money that you don’t have. If you are unfortunate enough to be in credit card debt, however, you pay more than the minimum payment every month. Credit card companies give a very low minimum payment so it can take longer for you to pay off your debt and in the end they can get more money with interest rates, so it is best to pay sometimes two to three times the amount that they give for the minimum. Living expenses When you enter adulthood, the idea of having a roommate can be very unattractive to a lot of people. You are no longer in college, have started your first real full time job, and you want to feel like an adult. You are ready to have your own place and don’t want to have to answer or deal with curtailing your idiosyncrasies for another person. However, as great as this sounds, it can be extremely pricey, and taking out loans or charging your living expenses, just so you can have your own place is not the smart decision.  Rather than putting yourself into the hole, it would be better to have a few roommates so that you can still have your own space, but not have to pay nearly as much. Not adding to your debt with this will be very helpful for you down the road. Before you want to swipe that credit card for those rounds of drinks for your friends, or for that pricey dinner at that five star restaurant down the street from your apartment, or for that designer suit or designer handbag, you should also think twice. It is important for you to have things and do things that make you happy, but in the scheme of things, in the end it will not help you in the future. Everything is in moderation, of course, but again, spending money that you do not have for anything or anyone will only make matters worse for yourself in the future when you are ready to settle down and make a big investment such as a home. If you are in serious need of a vehicle, it is much safer for you to take out a loan for a used car, or to fully buy one at once, rather than to lease a new car. It has been shown that leasing a car will keep you in debt for longer and not make your debt any better and will not help you in the long run. Illegal Recreation It does not take a rocket scientist to know that putting yourself into debt because of illegal substances is something that will only destroy your life, including your credit. If it is something that you cannot control, then it is a life decision you have to make to get help, and if it is something that you find is draining your bank account then it is again a life decision that you have to make. Having bad credit will only make you more unhappy, stressed out, and unable to fulfill the dreams that you have for the future. It is your job to do everything you can to stop it right now.