Student debt is a growing problem, which is why it’s important for college students to know the basics of money management. One of the best money lessons is from the country’s first commander-in-chief. Here is a portion of George Washington’s farewell address in 1796:
“As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible.”
Many students think that having credit gives them more leeway to spend. This false sense of wealth only leads people to purchase more than they can afford. They end up becoming delinquent in payments and damaging their credit history in the process. Don’t get into this cycle of debt.
Keep in mind that credit doesn’t equal the money that you have. It simply is the amount of payment you can defer. Always remember that you will be required to pay that amount back when your billing arrives. Defer too much payment and you’re in sure trouble.
Take George Washington’s statement to heart and use credit as sparingly as possible. Live frugally and only use credit during emergencies. Living on a cash basis will force you to plan your expenses much more strategically and help you minimize your debt. Life is much easier if you are not burdened by debt.
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