Financial Future Part Two

By: Ashley Davidson
By: Ashley Davidson

"When you're an incoming freshman on average you're offered eight credit cards your first year on average. It just goes up from there."

Nowadays everywhere you look you are offered a credit card. As a credit counselor Mark Gilliam sees people struggle with the problems that accompany them on a daily basis.

"It's readily available so that has disastrous effects. Most people aren't trained. They're not taught by their parents. They're not taught in high school," Gilliam said.

A recent survey tested high school seniors about some basic financial facts. Fifty two percent of teens think that a credit card represents an "informal" agreement to pay for something at a later time. Also, half of the teens polled say the only time they talk to their parents about money is when they are asking for some to spend. With companies handing out applications on every campus in the country it's easy for young people to start down a dangerous spending pattern.

"Because you're not dishing out the 20, you're pulling out the plastic. And that sets unfortunately what can be a lifelong habit of when I need it I pull this our and I pay for it, instead of actually paying for it," Gilliam said.

"And it gradually accumulates and before you know it you're really in over your head," Toni Burnham said.

Toni Burnham and her husband, Cliff, got caught up in credit card debt when they were in college. Statistics show credit debt continues to increase for every year a student is in school. But Gilliam says if you adhere to some simple steps you could avoid owing thousands to collectors.

"You've got to save money for emergencies so when those emergencies come up you don't go back into debt," Gilliam said.

The second step is to make a budget for every month and stick to it.

"Then you have to put your debt down on paper. Actually look at it, face your demon, and then attack it with everything you've got," Gilliam said.

He equates getting out of debt to losing weight.

"You've just got to think it through and either exercise more or eat less or a combination of both. With Getting out of debt, you've got to reduce your spending or increase your income, preferably both."

That's what the Burnham's had to do. Cliff had to take a second job, sometimes working seven days a week.

"I think the lowest point we got to was when we couldn't really afford to make all the payments financially so you kind of had to choose which payments you were going to make each month," Cliff said.

It took them five years to pay off the debt. Gilliam says it's possible for everyone to do they just have to make changes to their habits.

"If you do save money and you do stay away from credit and you do budget, you will succeed financially. There's no way that you can't," Gilliam said.

Want some financial advice? Log onto financialplan.about.com for great financial tips.


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