Money is a tricky S.O.B.
The ebb and flow of money produces a tide strong enough to sweep some to spectacular heights, and simultaneously drown out the less-than-lucky players. Although some promote a less materialistic world view by attempting to downplay the significance of money, it is a determinant of countless variables in life — where we can live, how many children we can sustain, the places we visit.
It should come as no surprise that the mismanagement of assets usually spells disaster for even the most well-established corporations.
But when it consumes the household, debt is a chronic disease that can waste away the viability of personal hopes and aspirations.
Despite the dirty word it is, debt isn’t a foreign concept to a number of Americans, as the median household debt is around $67,000, according to the Board of Governors of the Federal Reserve System.
Not all debt is bad. The old adage that money is made from money spent still rings true for borrowed funds. However, this obviously does not hold water for all expenditures.
Perhaps the most significant sources of financial insolvency can be traced back to two major decisions in every individual’s life — whether or not one chooses to attend college, and when one begins to pursue the “American Dream.”
It’s easy to understand the intrinsic positives and negatives of pursuing an undergraduate degree. The 14.4 percent unemployment rate of 25- to 34-year-olds with high school diplomas denotes an obvious advantage for those who seek higher education. Contrarily, the Project for Student Debt estimated a college senior of the 2010 graduating class owed an average of $25,250 in student loans — an evident negative for low-producing degrees.
On the other hand, the outcomes of racing for the American Dream vary in nature and may result in utter failure for those not ready to enter the marathon and those not aware of changes in the rules.
Unfortunately, many young Americans participate in the earliest segment of the race prematurely with the purchase of a vehicle. This single act sends out palpable shock waves, making or breaking future endeavors. Sound purchases prove to be valuable investments, shuttling America’s future working force to part-time jobs. But the over-eagerness of owning a car may cause some to sink thousands of dollars into a “lemon” that will eventually be scrap-metal with no resale value.
The next leg of the race usually separates scores from the pack — property ownership. Totaling at $10 trillion in 2010, home mortgages constitute the heftiest portion of both household and nonprofit organization liability. Even more essential to the American Dream than owing a car, home ownership without financial security is a sin U.S. citizens are fond of committing.
When the marathon comes to an end, success throughout the race can be measured by one single variable — if and when one retires.
There is nothing wrong with the idea of the American Dream, as it is a wonderful prospect when one considers alternative lifestyles.
The problem lies within several game-changing rules. The Atlantic reports that wages have dropped 28 percent in proportion to price indices since 1969 for young working class men.
Coupled with today’s weaker job market, this makes young people with debt extremely sensitive to the economy’s fluctuations.
For these reasons, the tradition of acquiring even moderate amounts of debt during youth, either through college or the purchase of a home, is antiquated and cannot be followed by those without adequate means.
Renting is often overlooked as a viable alternative to home ownership, and working part-time during school might be inevitable to avoid exuberant loans.
More than ever, frugality has become a virtue for those hoping to remain financially solvent later in life.
As hard as it is to accept, some may find it necessary to temporarily live a relatively unembellished life in order to keep the hope of the American Dream alive.
Otherwise, life might become less about living and more about surviving.
 
Chris Freyder is a 21-year-old biological sciences senior from New Orleans. Follow him on Twitter @TDR_Cfreyder.
 
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Contact Chris Freyder at [email protected]