YouthZone: Managing debt and covetousness

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“Do not save what is left after spending, but spend what is left after saving.” That’s a popular quote by American investor and billionaire Warren Buffet, and it is one we need to embrace, according to 21-year-old Michelle Paige. She’s pursuing a bachelor’s degree in Management at the University of the West Indies Five Islands Campus, but remains mindful that unforeseen circumstances such as sickness, accidents, and natural disasters can bring us to our knees and plunge us into crisis.

So, what should we do amid glaring uncertainties? Well, Michelle, who’s also the Treasurer of the UWI Guild, suggested that even though many of us have our lives well-planned out, we must try our best and save what we can an “prepare for rainy days.” Although money cannot solve all our problems, it surely can help. And that’s why young people need to understand the value of budgeting.

For youth who lost control of their finances and believe that they are at the point of no return, it’s time you establish a budget. Michelle pointed out a few advantages of having a spending plan, which helps you shut down risky spending habits, set long-term financial goals, and get a peace of mind. Business reporter Carmen Reinicke, asserted that a budget is one of the first steps towards financial wellness because it acts as a guide for your money.”

Five basic elements of a budget that we should track are: income (money earned), expenses (bills), savings (reserve fund), debt payments (payback money owed), and assets (anything of monetary value). Now, let’s focus on debt. Michelle is of the view that debt is sometimes a product of poor financial management, which can have catastrophic consequences. So too can covetousness—the excessive desire and greed to chase and acquire material things and friends that can impoverish us and stunt our development.

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Michelle Paige

“So young people, it is okay to forgo that party that you can’t afford to go to. It is okay to pass on those new top name-brand shoes you want so badly,” Michelle stated. We need to teach our children and youth that contentment is not always synonymous with material gain.

We all want things that we don’t have – a house of our own, a car to drive, a retirement plan to rely on in old age,” said blogger Kevin Mercadante. “Is it wrong to want them? Probably not … but covetousness goes beyond simply wanting better for ourselves and doing what’s necessary to get there.” He added, “Covetousness can turn the pursuit of even noble goals into an obsession, and idol. People end up deep in debt, or chasing a lifestyle they can’t afford.”

But there is hope even amid crisis. With a proper debt-reduction strategy and a progressive mindset, we can make meaningful changes. Whenever we borrow money or credit items, author Stephen Lea noted that not only does a debt exists, we are also “under a legal or moral obligation to pay money to another, now or in the future.” 

Unfortunately, some of us have to be reminded repeatedly about our obligations since debt seems to coincide with amnesia and unconscionable behaviour.

We must make a concerted effort to plan and pay back what we owe. We can use the debt snowball method to pay off debt in order of smallest to largest or the avalanche method that targets debt with the highest interest rate.

Michelle asserted that youth empowerment hinges on “understanding the key concepts of choice and the value of money.” She underscored that “financial management is paramount to one’s peace-of-mind, as it incorporates planning for the present and future, organising financial resources that are available, then making wise and informed financial decisions”.

So, when we receive our box hand, unexpected monies, or blessings, as some of us prefer to call them, we should remember our lenders rather than succumb to our own selfish and covetous desires. We may also want to get rid of the credit card that fuels impulse buying and incurs bad debt. Now it’s important to note that good debt exists. It improves our lives by helping us achieve long-term goals and increasing our earning potential such as a low-interest student loan for higher education.

The Covid-19 pandemic magnified the importance of establishing a budget, but we don’t have to wait for the next pandemic. As we discourage covetous behaviour in our children, writer Donna Paris remined us when we “familiarise kids with family finances early on, they’re more likely to feel positive and confident about tackling their own budgeting challenges”. 

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