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2002-11-13 - 9:45 p.m.

More about debt

I've been thinking more about debt. My analysis is based on anecdotal evidence only, but if I look at my friends and acquaintances, it seems like young white middle-class women have a big problem with credit card debt. And by "big" I mean thousands of dollars for each woman. How does this happen?

I think it's a combination of things--silence about money in our families, societal expectations of female shopping (shop 'til you drop), pressure to keep up with our friends (and the lifestyles we see on TV and in the movies), general irresponsibility, and lack of knowledge/education about the way credit cards work, about expectations for salaries and expenses, and about money and debt in general.

When I was growing up (and even now), my family hardly ever talked about money. I knew vaguely that we didn't have a lot of money when I was little. We drank powdered milk and I didn't get the Guess jeans I wanted in elementary school. As I got older, we moved into a bigger house, had more money, and a lot of the obvious things disappeared. But in all that time, I didn't know anything about how much money my family had (or didn't have), how my parents were planning for retirement, what kind of investments they had, how much our house cost, and so on. I earned money babysitting and doing odd jobs, but usually spent it all immediately.

In high school, I worked as a cashier in a local grocery store. I got a checking account, paychecks every other week, paid taxes, and direct-deposited some of my paychecks into my savings account. It was my first experience with managing my own money and I was pretty successful at it. Except that I didn't have any bills. And I didn't have any credit cards. I was free to spend what I wanted and the money I saved was just a bonus.

College soon changed all that. I got a credit card. I also got a job and eventually an apartment and all of the accompanying expenses. I also started dating an older guy who had expensive tastes. Good restaurants, nice clothes, fancy electronics, powerful computers, snazzy cars, downtown apartment. The things he had appealed to me--much more so than the scrubby college freshman lifestyle (and scrubby college freshman boys) I was otherwise surrounded by. I also spent a lot of time with my aunt and uncle and decided their lifestyle was my ideal--old, beautifully restored home in a central city neighborhood, nice cars, vacations in foreign places, good food, gorgeous furniture.

What I didn't realize was what both of these lifestyles entailed. On the one hand, my older boyfriend used credit cards lavishly and eventually moved in with his parents to save money. On the other hand, my aunt and uncle worked long hours (incredibly long in my aunt's case), didn't have children, and both had high-salary, high-pressure professional careers. Plus, this lifestyle was something they achieved in their 40s and 50s. They spent their 20s living in a mobile home and various apartments, making homemade Christmas presents, and eating Ramen noodles.

I think a lot of young women fall into a similar situation. And how do we cope? We apply for one of the many, many pre-approved credit cards that appear in our mailboxes. We spend money we don't have. We fail to understand what 20% interest really means. And we spend ourselves into a lot of debt.

It's been a painful process for me (both emotionally and financially) to acknowledge my problem and get out of debt. The Scientist and I plan to raise our children to understand money, investments, and how credit works. We will be more open than my parents were about money and try to provide good examples so that our kids learn what it's all about before they're on their own, and so that they aren't shocked like I was by the reality of finances. Maybe it's a naïve goal, but I think it's possible to learn this stuff better than I did and not get into this kind of trouble.


I'm off on my business trip now. No more entries 'til I get back.

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