We are living in a century where millennial are enveloped inworsening economic situation and are continuously engaged in changing theirpriorities to live an economically convenient life. Today, when youngindividuals are first starting their lives, either as students or employees,debt looks like the best solution to them to boost their income. However, ithas proved only a temporary fix that later sets in to drag them into a debttrap. This 21st generation is totally apart from the past generations as theyare struggling under the weight of heavy loans.
In other words, youth falling into debt trap is a commonphenomenon. Most surprising aspect isthat they hardly take a moment to think about the reasons of falling into thetrap. Even as they are trapped in debt, they never try to scrutinize the reasonbehind their debt crisis. They even turn a blind eye to the fact that debt canlead them to a disastrous future, can consume their assets, hurt theirrelationships and even bring them acute mental stress.
Many youths find themselves in debt because they delay intaking care of their lives with a lower income and thus they begin to takeroute of bank loans. Living within their means is not mostly observed.
One of the major reasons young people are in debt is poormoney management. In most situations, poor budgeting and planning lead to debt.Otherwise, with the right budget, one can easily track expenditure to make sureexpenses are always less than income. Here the norm is to write down allexpenses for a whole month to see exactly where income goes. This simpleexercise will go a long way to avoid debt.
Today millennial also fall into debt because they don’t giveattention to save a few bucks. Saving money for future is never a bad idea. Noone has ever regretted saving money for emergencies.
Overspending is another norm among millennial. In this eraof credit cards, most of the young ones are tempted to spend money they do nothave. Before laying hand on a credit card, it’s imperative to think about theways and means of repaying that money, which is nothing but purely a loan. Theinterest on money used through such cards is backbone breaking.
Over a period of time, availability of easy loan foreducation has lured youth to pursue higher studies. Taking a loan for pursuinghigher education is not bad at all, but the way it’s obtained makes it bad.Going to universities or college without a clear plan of how to pay for it haspushed most of the student borrowers into a debt trap.
Precisely, borrowing irresponsibly only land them introuble. For example, It’s very dangerous to take a loan to repay another. Heredebt trap is inevitable. Taking a loan to meet certain requirements is not abad thing. But one needs to plan it properly, so that one doesn’t get into a debttrap. Sudden events like sudden reduction in income, loss of job, a medicalemergency, etc. are necessarily to be factored while planning for a loan.
When we look at the scenario at the moment in J&K State,we find our millennial inclined to borrow more and more. The number ofborrowers has increased over the past few decades and even the amount of loanstoo has shot up. Our young ones have developed a habit of taking differentkinds of bank loans to finance their lifestyle. They are fast becoming habitualof ruthlessly swiping their credit cards. These loans may enhance theirlifestyle, but the darker side is that the more they borrow, the more they falldeep into a debt trap.
Here I am not conflating debt traps with easy access to loanschemes. Actually, such debt traps owe their origin to poor financial planningand haphazard money management practices. It happens when one takes a loanbeyond his means – borrowing more than what one can repay. It’s also a rampantpractice among the young ones that they want quick and easy access to loans.It’s here that they forget to give attention to the right loan product suitablefor their need. For example, taking route of cash loan for the purpose ofeducation or housing is not a wise step. Housing and education loans arecheaper than cash loan.
In succinct, don’t spend money that you will earn tomorrow.It will lead only to financial disaster and can leave huge adverse impact onyour social life too.
(The views are of the author and not that of the institutionhe works for)