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5 Ways 20-Something's Can Avoid Debt

By Edited Nov 15, 2014 3 8



According to NerdWallet, the average American household owes over $7,000 in credit card debt alone -- if we look exclusively at indebted families, however, that number doubles to about $15,600 in credit card debt.  

These statistics, as unappealing as they sound, could indicate an issue with the cost of inflation versus average worker wages. If workers cannot afford the necessities with their paychecks, falling back on an easy line of credit is a common band-aid solution. But relying on credit to get through tough times will only make those tough times harder to get out of. To avoid falling into debt to begin with, 20-something's should make an effort to borrow as little as possible. These tips can help them do so. 

Choose the right college

College is still the best way to increase earning potential, but a lot of that depends on a person's ability to pay for college courses. If students choose a college that is too expensive, making sufficient student loan payments upon completion can make the transition into the workforce much more difficult. To avoid this, it's important to choose a college based on a budget. 

Start building good credit

To get the lowest interest and the most appealing terms on new loans, having a strong credit score is key. For those just starting out, this can seem like a difficult task, but is actually quite simple. Just take out a single line of credit (preferably one with a good rewards program) and begin making small purchases on it. If borrowers can pay off these balances monthly, they are on their way to a top-notch credit score. 

Negotiate a good salary

"victory shake"
Many young Americans don't the value of negotiation --  especially when it comes to their salary -- and may be earning less than they should simply because they don't ask for it. In order to earn the most in a career, recent graduates should try their hand at negotiating what they feel is a good wage. Though some employers may not bite the bate, more often than not, negotiating a good wage will project confidence and actually help in the plight to find steady, well-paying employment. 

Don't use credit for cash

If the money isn't there (and it won't be there by the next paycheck), then it shouldn't be purchased. This is especially true for small purchases like food or outings because they will lose their worth well before they are paid off. 

Live affordably

Though California might sound like a fun place to live, the cost of doing so is significantly higher than much of the nation. In an effort to avoid debt, it is probably best to avoid living in an area in which the cost of living exceeds a reasonable budget.

Though excessive debt can be remedied, it's best to avoid it as much as possible.

Whether you're a young adult just heading out into the big world or a concerned parent researching the best opportunities for your child, becoming financially literate is perhaps the biggest step towards becoming a self-sustaining adult. This means understanding the situations that lead to debt and taking care to avoid them now. Because your future shouldn't be spent paying off your past.



Nov 14, 2014 7:05pm
Student loans seem to be outpacing credit card debt these days. That said, there are places that refuse to pay workers their worth regardless if they have education credentials or not. This is an amazing article that sums up everything in simple sweet terms. Thanks for sharing.
Jan 3, 2015 11:48pm
Wise advice for families of all ages as well as young people.
Jan 3, 2015 11:49pm
Wise advice for families of all ages as well as for young people.
Jan 4, 2015 6:22am
Thank you, ladies. If only they would teach a course like this in high school.
Mar 14, 2015 7:31pm
The average college student has $60K worth of debt depending on how far they go in their education. Once they graduate they cannot find a job. And if there is a job opening they have to have 4-6 years of experience. So either they go to a totally different career, which often happens or they go back to college and accrue more debt. Or they jump out of their field altogether and go and work at Taco Bell.

Is college debt really worth it? When people who do not go to college are making the same in the same field but already have 4 years of experience.

Honestly, If I was a 20 something and wanted to avoid debt... I would do it by avoiding college. Start my own business or go into the field I want to be in as a peon in the industry. At least I am in.

I certainly understand that there are some fields that you have to go to college for, but across the board, one does not need to go to college to get a good job.
Mar 15, 2015 9:38am
This comment has been deleted.
Mar 15, 2015 9:38am
This comment has been deleted.
Mar 15, 2015 9:40am
Thank you for your comment and I totally sympathize with your stance. It is true that some degrees are better left on the table (interior design is a good example), but the fact is, a college degree is still (on average) the best way to increase one's over-all earning potential. According to this article published in the Federal Reserve Bank of New York, "...despite the challenges facing today’s college graduates, the value of a college degree has remained near its all-time high, while the time required to recoup the costs of the degree has remained near its all-time low."


Granted, these numbers are based on an average STUDENT LOAN DEBT of around $29,000 -- less than half of your student debt guesstimate. Perhaps that makes the idea of college a bit less daunting?

Anyway, thanks for your comment and I appreciate you joining the conversation. :)

Mar 16, 2015 8:10am
You are right that the average of college students at $30k, but as they go on in their education the numbers can go up to 125K You can read that at


I would say that the average credit card debt is right around $8k

With that being said....there is an education that colleges or high schools should require about how to handle finances better.....

The problem ultimately comes to if they go to college and get $30K or $60K or $78K depending on how far they go. There is a bigger problem....it is not necessarily the college debt initially that bothers me...it is the lack of handling finances that these people accumulate after college.... leaving buying a home out of the picture...you are throwing the college debt in, with all of the other debt that they accumulate...credit cards, car, or who knows what else.

Total U.S. consumer debt is at $11.4 trillion. That includes mortgages, auto loans, credit cards and student loans. This is what is sinking the American dream..what is the American dream...being debt free....almost anyone can own a home...but how many people can own a home without having loads a debt.

I think the real problem is education about finances before college....not wait for these people to figure it out after they already avg. $30 from undergrad and up to $125K from post grad.

Just some extra food for thought
Mar 16, 2015 8:44am
I completely agree with your standpoint. I know a college degree can get extremely expensive, and interest rates are going up right along with tuition, leaving thousands of Americans in extreme debt after graduation. I would assume that the higher your education (and typical debt), the higher your ultimate earning potential (though I'm reminded of an encounter I had with a local bus driver who had lost his job as an engineer and was considered "overqualified" for most of the other jobs he has applied for -- until he came upon the bus driver gig, that is).

I also feel like the pull to get a degree is largely what conditions so many people to just accept that "debt is a part of life" (A quote taken directly from my husband). With this mentality, it's no wonder people tend to buy houses more expensive than they need, that big screen television and weekly (sometimes nightly) evenings out -- they can charge it and receive the instant gratification they were taught they deserve as hard-working Americans.

The fact is, living in excess of one's means is common, and I believe that expecting a college degree (and thus debt) right out of high school largely contributes to this. Not to say that the value of a degree is not there (statistics indicate otherwise), but it certainly doesn't need to be one's ticket to success if their career of choice doesn't require it.

I had written another version of this for a client in which I describe the most (and least) valuable degrees to help readers decide for themselves whether or not college was right for them. (I'm sorry i can't provide the link). The point is, I agree that touting college as the key to success is misleading, but generally speaking that (super expensive) piece of paper does make it easier to find reasonable employment (and can help someone get their foot in the door or a particular industry).

Having said that, I also agree that a basic finance class should be included in both high school and college general education classes. Without it, we are doomed to spiral farther in debt as a country. Instead of teaching kids the "buy now, pay later" mentality (which, I know works in favor of big banks so this may never happen, but one can dream), we should be teaching our youth how to budget and plan ahead.

We also have to get away from the idea that success is measured by material goods (as if true success is measured by which person has the coolest stuff, lives in the best house/neighborhood, goes on the best vacations or has a degree from the most prestigious schools). This competitive mentality also leads to an over-indulgent country. Once again, this supports the benefit of mandatory education on the matter.

So, once again, I completely agree with you. i know college is expensive (as are interest rates). Ideally, a college education would be affordable for everyone without forcing graduates to commit to another 10 years of hard labor just to pay the debt off. But, until that happens, the best we can do is educate who we can while we can. This blog is one way I've tried to do so. Your contribution to it only makes it better :)

Again, thank you so much for being part of the conversation.


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