Christian Financial Advice and Biblical Stewardship

How to Mess Up Your Financial Life

  • Matt Bell
  • 2011 4 Jul
How to Mess Up Your Financial Life

I thought I knew a thing or two about making financial mistakes.  After all, I’m the guy who once received a $60,000 inheritance and turned it into $20,000 of credit card debt. And it only took me two years!

I messed up with money the old fashioned way. I didn’t pay attention to my income and expenses and blindly went about living beyond my means.

But I just discovered a new way to foul up your finances: Feel good about your debt.

Debt as a Confidence Booster?

According to the headline on a recent article, Young Adults Feel Empowered By Debt.

Huh?  I had to read the headline twice to make sure I had read it correctly.

Sure enough, the article was about a new study showing that the more debt 18- to 27-year-olds carried, the more self-esteem they had and the more they felt in control of their lives.

Since the researchers didn’t ask explanatory questions, they could only speculate about what exactly the respondents found so empowering about their debt. One said, “Debt can be a good thing for young people – it can help them achieve goals that they couldn’t otherwise, like a college education.”

But it wasn’t just student loans that gave people the warm fuzzies; they felt good about credit card debt as well. “Both kinds of debt had positive effects for young people,” the lead researcher noted. “It didn’t matter the type of debt, it increased their self-esteem and sense of mastery.”

According to the article, “The researchers also explained that these young adults might be enjoying their debt because it has allowed them to buy things they wanted without having to wait.”

When Warm Fuzzies Lead to Fuzzy Logic

When I read the article, I couldn’t help but think of a video I saw of a series of person-on-the street interviews in which people were asked about their debts. One woman said she had, “Maybe $6,000” of debt, which she described as “not a lot.”

Not a lot? I’m sure she didn’t realize it, but if by some miracle she stopped going any further into debt and made the minimum monthly payments on her “not a lot” level of debt, using some fairly common assumptions, it would take her over 40 years to pay off that debt!

Far from “empowering,” debt is entangling.  It prevents people from achieving their goals, steers them to jobs they’d rather not take, and messes with their most important relationships. Research shows that couples with consumer debt are more likely to fight about money and other things more often than couples without such debt.

Defriending Debt

So many young people are starting their careers behind, weighed down by a load of student loans and credit card debt, that it feels normal.  As a result of their debts, many end up choosing a career other than the one they studied for, marrying later than they’d like to and then fighting with their spouse because of their bills. Which makes me wonder, why would anyone want to be normal?

Whenever I teach workshops for college students or engaged couples, my message is to be different. Be odd. Do what your friends are unwilling to do. Live well beneath your means in your early years so you can get out of debt as soon as possible and live free for the rest of your years.

Carry a balance on your credit cards? Never. Finance a vehicle? Don’t do it. The only acceptable debt is mortgage debt, but even there, the key is to keep your mortgage debt at an unusually reasonable level.

Do those things and you will experience something very few people ever experience: true financial empowerment.

Matt Bell is the author of three personal finance books published by NavPress, including the brand new "Money & Marriage: A Complete Guide for Engaged and Newly Married Couples."  He teaches a wide variety of workshops, including MoneySmart Marriage, at churches, conferences, universities, and other venues throughout the country.  To learn more about his work and subscribe to his blog, go to: