Recently I was at an event where United States Secretary of Education Arne Duncan was the closing keynote speaker. In his fifteen minute keynote he said “student loan debt crisis” eight times! He didn’t make note of the student loan debt crisis because it’s just beginning, he made note of it because it’s slowing down the economy!
The student loan debt crisis does effect the economy, but on a deeper level it’s directly hurting Millennials. On the surface it’s keeping Millennials from buying homes, getting married, starting families, but if looked at more closely student loan debt is doing something much worse to this generation. It’s crushing their dreams to change the world!
Gone are the days when people want to go and work for a company for forty years and receive a gold watch. Baby Boomers were able to have high school degrees and make a great salary that landed them in the middle class. These Baby Boomers could work their forty years with the same company and be rewarded with an awesome pension.
Today, that’s no longer the case, especially after the 2008 Great Recession. Today a company will lay you off if sales dip five percent and pensions are disappearing at a rapid rate. Surprisingly to non Millennials, Millennials don’t care about any of this because they never plan to stay at any company for ten years let alone forty! Millennials crave a challenge and meaning to their lives even in the workplace.
The challenge that Millennials face when trying to live their life with meaning is the finances it takes to live that type of life. There are Millennials who want to start a non profit that helps at risk youth go to college. There are Millennials who want to start a business and give back to their community out of the proceeds. They don’t just want to be an entrepreneur, but they want to be a social entrepreneur so that they can change a wrong they see in the world.
Millennials have so many innovative ideas that can change the world, but can’t financially make any of those ideas reality. Money is essential when a Millennial is trying to start a business, start a non profit, move to a third world country in order to help others and if a Millennial is in debt all the money that could be used to change the world has to be used to pay other people back! So how do Millennials begin to get out of the debt rat race so that they can pursue their purpose?
First, figure out what your purpose is and what is the time frame that you want to start in that purpose. Is it in the short term (6-12 months), the intermediate (3-5 years), or the long-term (10-15 years) that you want to be working full-time on your dream? Whatever time frame you choose that is when you need to be debt free or at least close to it. For example if you pick intermediate then you need to be close to being debt free in five years so that you can start working on your dream without worrying about money. Now that you know when you want to start making your dream a reality the hard part begins.
If you have found that you have more month than money then it is time to find some money. You begin to find that money by writing down a REAL “spending plan” that has all of your expenses and income. I don’t call it a “budget” because people hear budget and immediately shut down, but if people have a plan to spend their money it works out better!
The goal of the spending plan is to figure out how much money is leaving your household each month and how much is coming in. This will be a tough activity for many to do because it makes everything real. This is where you find out how much money you are really spending and you may not like the result. Once the spending plan is complete it is time to cut some items out of your plan!
Next, you will need to look line by line on your spending plan and see what can be cut out or at least cut back. When I was paying off my $50,000 of debt in 2 1/2 years I first looked at the cell phone plan. I seen that I was not using all of my minutes and data so I changed plans and saved $50 a month. Next I examined my cable bill and seen that I had every channel Time Warner cable offered and didn’t watch half of them, so I switched to basic cable and saved $80 a month. I also found out I ate out to much and cutting that completely out saved me $100 a month! Cutting these three expenses saved me $230 and I used the extra money to pay towards debt! I cut many more and you will too if you want to become debt free and start living your dream!
Cutting items out is only the beginning. Depending on how much debt you have and how bad you want to make your dream a reality you will also sell items and take on an extra job just to bring in more money to pay towards debt. Millennials can easily be called the generation of rising student loan debt and the aftermath of that debt has caused many dreams to be deferred. If you are ready to get those dreams back on track you now have a starting point. The world is ready to be changed by you. Your time is NOW!
This article was originally published on Chelsea Krost.
Photo: Alys Tomlinson / Getty Images