Last Wednesday, I decided to conduct a series of polls on Twitter dedicated to debt in the hopes that it would spark an honest and open conversation about its causes and effects. Therefore, to kick off the discussion, I posed the question “Are you in debt due to high interest rates, which are making monthly payments harder to pay off, or is the principal amount too high?” The choices to ponder and ultimately choose were: Interest rates are high; Principal amount is high; I’ll pay my debt someday; I don’t have debt. As I sat back and awaited my audience’s response, I decided to continue the dialogue with a series of follow up questions, which would be compiled into a thread.
The first follow-up question was “For those of you with debt, the largest percentage is due in part to which of the following?” The responses were: Back bill payments; Credit cards; Student loans; Overdraft fees. In a matter of 10 minutes of both questions being posted, the responses were eye-opening. Votes for question one heavily swayed to “interest rates” as votes for question two overwhelmingly swayed to “student loans”. As the votes poured in, I began drafting. The last three poll questions centered on if people felt as if they had a handle on their debt, what options were being explored to eliminate debt, and the estimated years for a final payoff, and the winning responses were: No; Asking for assistance/I don’t need help; 10 - 20 years. While the overall goal of the poll had been successfully achieved, I was plagued with this thought: Although immensely different in how we navigate the world socially, economically we were tied --debt is universal. Based on the poll, it was apparent, yet not surprising, that an enormous majority of individuals had incurred debt. Moreover, the reasons as to why these individuals had amassed large sums of debt were because of high interest rates (as a whole) and interest rates tied to student loans. The large sum of debt attributed to student loans was not shocking because for the first time in United States history, student loan debt has surpassed credit card debt. As a result, the timetable for eliminating debt has increased. When analyzing the responses further, I surmised that individuals did not have a firm grasp on eliminating debt due to one or more contributing factors surrounding employment. These factors include, but are not limited to, part-time employment, unemployment, low wages, and below average income, which as a result has made it increasingly difficult for loans to be repaid on time. Likewise, I further surmised that individuals lacked the necessary access to loan repayment resources, therefore whether they were aware or blissfully unaware of the resources at their disposal, debt would continue to exist and continue to wreak havoc on their lives. Upon final reflection, I can confidently write that last Wednesday’s dialogue was fulfilling as the door for continued education was opened further. Therefore, in an ongoing effort to bolster financial literacy and knowledge, I believe that in order to create an action plan for eliminating debt, learning what interest rates are and how they affect monetary policy (both at the federal and state level) and personal finance is necessary.
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WhitneyEducation enthusiast whose mission it is to see Financial Literacy receive well-deserved shine. Archives
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