Once again the statistics show the gap that exists in the financial education of children and young people: more than a third of young people between 15 and 29 years old are in debt. However, the problem has a solution. If you are a young person who is burdened with debt or you are a parent of a young person in debt, you can start reversing your situation today!
Debt has become like the black plague of modern times, since it slowly eats away at families' economy and does not allow them to prosper materially. What is surprising is how this disease also affects more than a third of the younger population.
According to a survey carried out in Chile by the National Youth Institute (INJU), 1,237,191 young people between 15 and 29 years old have some level of debt in our country, which corresponds to 33.18%.
To this alarming number must be added the fact that 72% of young people in debt use financial instruments, among which multi-store credit cards, which are known for their higher interest rates, account for almost 70% of use.
The document presented by the INJU quotes:
Despite their youthful condition and the meager sources of income, financial institutions have defined young people as clients, managing to market their products to almost half of the young population (48.4%) (source: 5th National Youth Survey).
The first reaction caused by these unpublished figures is astonishment at financial institutions, which apparently have no limits to offer their products and are targeting university students to have, in the near future, a percentage of clients called "young professionals."
However, blaming financial institutions for the delinquency state of our youth is like trying to blame weeds for a poorly done planting.
Youth indebtedness goes far beyond the lack of ethics of financial institutions. The underlying problem is the poor financial education of these young people.
Furthermore, it is not a problem inherent to the young sector of the population. The vast majority of adults also show alarming levels of debt, regardless of their level of education.
The reasons for such indebtedness are diverse, and its justification goes beyond the purpose of this article. However, I would like to refer to one of the most common reasons typical of today's consumer society: the desire to possess goods and services that cost more than your income level and that has prevailed over self-discipline and the application of wise basic principles. money management.
It is sad to see how thousands of young people begin their adult lives with the burden of debt in their lives. Especially when everything can be done so differently by implementing basic money management principles that should be taught as part of the basic preparation for the life of each young person.
How can we change this worrying situation of youth indebtedness?
The solution to the problem is simple: postpone pleasure.
However, it is not that easy to do. From said to fact there is a long way. It requires discipline and financial education, in addition to the willingness to swim against the current that encourages us to spend our money excessively to own more and more consumer goods.
But it can be done.
If you are young and lack the education necessary to manage, save and invest your money successfully, it is time to start changing your situation today!
Did you know that you can use the same borrowing mechanism with those sky-high interest rates, which cause so many headaches, to your advantage? The secret is learning to use the incredible power of compound interest, which according to Albert Einstein, is one of the greatest inventions of mankind.
As a young person, you have a tremendous factor going for you: time. If you discipline yourself and your spending constraints and decide to reverse the debt curse, you can invest your money and take advantage of the tremendous potential of compound interest to your advantage.
If you are 20 years old and want to retire as a millionaire, all you have to do is save $ 20 a week or $ 80 a month. With an 11% annual interest rate, you will have 1 million at age 65.
On the other hand, if you are 40 years old, you have to raise $ 8,700 per year and, if you are 50, 29,000 per year to obtain the same result.
Sees it? Your debt situation can be reversed. Take advantage of being young. Don't ruin your future by placing a tremendous burden on yourself and your future family. Make an effort today to educate yourself on the proper handling of money, invest it wisely, and you will sleep soundly for the rest of your life.
