Young and in Debt: When being in the hole is worth it

Posted on Jul 24th, 2017 | Uncategorized

Studies about the Millennial Generation bring up a number of generalizations. They expect praise. They’re attached to their smart phones. They have college degrees, but they also have student loans, no meaningful job, and no major life purchases to speak of.

I’m 28 years old, and yes, I have an iPhone and parents who rewarded good grades with checks. But I’m also a college graduate with no student loans and a good job. I own a home and a car, I have a 401(k), and I’m getting married this year.

There’s just one caveat to breaking the Millennial mold: I’m nearly $100,000 in debt.

36 percent of Millennials still live with their parents, according to a Pew study.

"Millennials have seen their parents struggle firsthand," the article reported. "As a result, they’re nervous they could find themselves in a similar position."

I see the attitude among my friends: Amy is a microbiologist. Jeff is an editor. Kristen has two degrees. They all live at home. They are weary of debt. They don’t want to rent. They don’t want to be tied to a house. They’re scared of the commitment.

And there’s something to be said for that because saving money is flexible. They go out to dinner and on weekend trips. They splurge without hesitation. If something breaks in the house, at least it’s not their house to fix.

For twentysomething homeowners, every purchase is scrutinized, and saving is tough. Appliances die, utility costs spike, the to­do list is long.

So is it worth it?

Every person’s life presents different opportunities, regardless of the common economics or job markets. So my motto is simple: Plan ahead, and don’t let good opportunities pass you by.

I have a $70,000 mortgage to pay off. But, by watching the market and working with a good realtor, I also bought my house at nearly half what it sold for a decade ago.

So now I have this house to pay for. Ouch. Could I use extra money in my paycheck? Absolutely. But by starting to save for retirement now and taking advantage of an employer match, I’ll have a comfortable retirement.

Oh, and remember that mortgage? It will be paid off before I hit 60. My elderly years are going to be awesome.

You can live comfortably with debt if you know how to manage it.

  • See a home for the investment – not the mortgage payment.
  • Know exactly where your money goes, even if it’s always to bills. For my fellow smartphone­loving Millennials, I recommend the money management app Mint.
  • Save tax returns and bonus checks for rainy days.
  • Hunt for deals and haggle for discounts.
  • Practice the art of saying "no" to yourself and to others.

Repeat after me: Not all debt is bad debt. And besides, Mom’s meatloaf isn’t good enough to warrant waking up at age 30 in your childhood bedroom.