‘Want to boost your self-esteem? Then pile up on the debt.’ 

‘This is a surprising claim made by a new study which says young adults who saddle themselves with debt will feel empowered and feel better about themselves.

“Debt can be a good thing for young people – it can help them achieve goals that they couldn’t otherwise, like a college education,” said Ohio State University assistant sociology professor Rachel Dwyer.

Interestingly, her study found that 18 to 27-year-olds who had huge credit card and university loan debts had better self-esteem than their peers.

They also felt as if they were more in control of their lives, especially those in the lower economic classes.  Only the oldest of those studied, aged 28 to 34, began showing signs of stress about debt.

The study of 3079 young adults examined data on two types of debt – education loans and credit card debt.

“It didn’t matter the type of debt, it increased esteem and sense of mastery,’ Dwyer said.

She admitted that the results, which appear in the Social Science Research journal, offered some worrying signs about how young people view debt.

The effect was greatest among young adults from low-income or middle class families. In fact, students who came from families in the bottom 25 percent of income levels showed the strongest link between debt and self-esteem: The higher the debt, the greater the boost to self-esteem and feelings of mastery. Young adults from middle class families didn’t derive greater self-confidence from educational debt, but they did from credit card debt. In contrast, those from the most affluent families showed no correlation between debt levels and self-esteem.

Those in the bottom 25 percent in total family income get the largest boost from debt.

Those in the middle class saw no impact from holding educational debt, perhaps because it is so common among peers.  However, they did see boosts from holding credit card debt.

The most affluent were not affected by their debt burden.’

What’s your opinion on the issue of having debt?

Do you believe that people react differently to personal debt VS business debt?