There are many topics that I didn’t learn in high school that I wish I had. Some groundbreaking and life changing, others small and mundane. A big one that I wish I was aware of in my younger years is DTI. DTI, better known as debt-to-income ratio, is a topic rarely talked about by young people (in my opinion) but that can have a major impact on the trajectory of your life and financial health. 

It seems that at every juncture in a young person’s life, there is some kind of ploy  to cripple their monetary health early on and impede a young person’s ability to climb up the financial ladder. From early adolescence, most kids are exposed to a myriad of content encouraging big spending on expensive material items that in the long run, arguably serve no purpose. Designer clothes, shoes, and other items are constantly thrown in a child’s face from media, to music, to their friends and social circle. Guess who’s usually paying for it. That’s right, you are mom and dad. This is fine for families that can afford it, however I can’t help but to wonder about the subtle message this sends to our children about materialism in our society. 

The next juncture is another controversial one, college. I won’t speak my opinion on this complex topic, but I will share my experience approaching post-high school life, and the pressures I faced from teachers, advisors, family, and friends about higher education. At that time, everybody and their mother told me I must go to a 4 year school, live in dorms, and earn a degree in order to amount to anything. Boy, I’m glad I didn’t listen. I will say, this could be sound advice for those knowing the direction of their life they want to head in, even if that changes down the line. Most of the 18 year olds in my circle did not. The social pressure forced them to invest upwards of 6 figures into a dream, really, is what I would call it. A dream of complete autonomy from their parents, a dream of new friends and memories to make, and a dream of a life of success upon receipt of a little piece of paper: a diploma. Again, this is great when you’ve got a degree that guarantees you employment that will get you a favorable return on that 6 figure investment. Many people in my circle did not, and instead ended up 6 figures in the hole with jobs that do not require any higher education and “friends” they haven’t talked to in years.

I’ve finally got my dream job, time to celebrate!: Like many things in life, the above example eventually works itself out and many young people do end up with a job that fulfills them either monetarily, emotionally, or spiritually. The first is the most dangerous, because if you’re starting to see money coming in and you’ve never seen that before, it can be extremely tempting to blow it. The most common trend I’ve seen? Shiny new car. New job. New car. New me. Oh and also, new payments due. Don’t get me wrong, I’m not saying people should just walk everywhere and never buy a vehicle, but there are ways to go about it, and there is nothing wrong with saving money on pre-owned vehicles or continuing to drive that old beater. It could actually save you tons until you’re in a better position to make large purchases. 

Now let’s take all of these things: Materialistic and indiscriminate spending, college loan debt, and a car note. Oh and maybe if you’re lucky enough to find the love of your life, a nice expensive wedding and ring. Next phase in adulting: Buying a home. Oh wait, what? I can’t afford it because my DTI is out of control? How could that be? Probably because at no point did we stop and examine the consequences of incurring massive debt and the crippling effects it has on future investments. 

It can be hard enough trying to purchase a new home in 2024, with record low inventory, elevated interest rates, and sellers sitting on old low interest rates, there are already many factors working against today’s young home buyers. Before they can even get to those challenges, buyers are typically expected to have a pre-approval letter from a bank, and yes, because of the many expenses I mentioned earlier, many are now not qualified for pre-approval. I don’t know about you, but it doesn’t sit well with me that older generations are holding on to wealth while my generation struggles to keep up.  I want to see my brothers and sisters from my generation build wealth, success, and lifelong fulfillment. We have a lot working against us, so we must stay disciplined and work a little harder than the rest to responsibly manage our finances and build generational wealth.