Being in Debt Makes Some People Feel BETTER

Instead of feeling stressed by the money they owe, many young adults actually feel empowered by their credit card and education debts (Whitley was lucky–a lot of his education was free!) You can’t buy happiness: This is a phrase you hear all the time (especially when you’re buying a lottery ticket), but data from 63 countries shows that it’s true: Freedom and personal autonomy are more important to people’s well-being than money. Researchers found that the more credit card and college loan debt held by young adults aged 18 to 27, the higher their self-esteem and the more they felt like they were in control of their lives. The effect was strongest among those in the lowest economic class. Only the oldest of those studied–those aged 28 to 34–began showing signs of stress about the money they owed, probably because they were thinking about getting married and starting a family.

Speaking of credit cards, their fees have risen sky-high, and nobody–not the government, either political party or the banks–seems willing to do anything about it. Retailers–which pay a percentage of each transaction to the credit card company–think they’re too high as well. So what are shoppers doing? They’re starting to use cash again, which should make stores very happy. In some states it’s illegal to charge more for credit card sales, but it’s almost always OK to give a discount for cash, so if you don’t want to use your card, it can’t hurt to ask for this. Since the retailer will be paying at least 4% of the cost to the credit card company, he might find it builds good customer relations to give YOU that amount instead, when you purchase something with cash.

Sociologist Rachel Dwyer says, "Young people seem to view debt mostly in just positive terms rather than as a potential burden. Debt can be a good thing for young people–it can help them achieve goals that they couldn’t otherwise, like a college education. "We thought educational debt might be seen as a positive because it is an investment in their future, while credit card debt could be viewed more negatively. Surprisingly, though, we found that both kinds of debt had positive effects for young people. It didn’t matter the type of debt, it increased their self-esteem and sense of mastery."

"Debt can be a positive resource for young adults, but it comes with some significant dangers. We found that the positive effects may wear off over time, but they still have to pay the bills. The question is whether they will be able to. There needs to be additional research to answer this question."

(And we’re not sure if WE’LL be able to–we’ll be gone tomorrow if we don’t get more support from our readers!) Research has shown that higher income, greater individualism, human rights and social equality are all associated with higher well-being. The effect of money on happiness has been shown to plateau –that is, once people reach the point of being able to meet their basic needs, more money leads to marginal gains at best or even less well-being as people worry about “keeping up with the Joneses.”

But the road to well-being is bumpy at times. In more traditional and collectivistic societies, increases in individualism can be associated with anxiety and lower well-being. In more individualistic European countries, in contrast, greater individualism leads to more well-being.