If you want financial freedom, you need to get out of debt. And the easiest way to do so is to…drum roll, please…never get into debt in the first place.
But we have been told that certain kinds of debt are “good”. Last week we talked about car loans; this week the focus is on student loans.
Everyone says that student loans are an acceptable form of debt. You may have even heard that from your parents. You probably definitely heard it from your high school career counselor. Here’s why this myth is so pervasive:
- The lenders want to perpetuate the myth at all costs so that they can continue to make money.
- People generally perceive attending college as a good thing. Working your tail off to pay for it as you go is not.
Keep in mind that the mindset that taking out loans for college is necessary and good comes from a culture that encourages being in debt in order to look good on the outside and to feed your greed.
Student loans are not necessary. They are optional. Neither are student loans good. Listen, do you know who loans you this money to go to college? The federal government, that’s who! The most disorganized, financially irresponsible and greediest entity on the planet.
I ask you, do you want to be a slave to such an organization? I didn’t think so. Then obliterate the thought that student loans are good debt. You can’t even get rid of them by declaring bankruptcy.
Check out this scenario: a couple with four little kids has $140,000 in debt. One hundred thousand of it is in student loans. When they first got married, of course, they figured they would be able to pay off this debt eventually. But one by one, the babies arrived. The mother wants to be a stay-at-home mom, but her husband has just had his income cut in half.
This kind of thing happens all the time. And instead of being financially independent by thirty-five or forty, they are still struggling just to make ends meet and to make the minimum payments on the loans. They can’t even start a retirement fund! As a matter of fact, there are people in their sixties and seventies who are still paying off student loans!
Repeat after me: “There is no such thing as good debt.” Get rid of every kind as soon as possible.
