Saturday, March 8, 2008

Warning: Rant Approaching

Howdy everyone. Sorry for the hiatus from blogging lately. Life happens. It's been tough lately just to keep up with reading the blogs I follow in my Google Reader, let alone actually contributing to the social blogosphere!

What gets me going today (aside from actually having an hour or so to be at the computer) is an article in my reader. The blog post that got me going was one that has been sitting unread for a while. I quickly read it once and then decided to "keep as new" so I would go back and actually comment on it.

The blog points to an article on CNN's Right on Your Money series that talks about student loans. It mentions way to "handle" your student loan debt. One of the methods is to extend your debt to up to 30 years, in order to pay it back.


Why in the world would you want to extend your student loan debt to 30 YEARS on purpose!? As Dave Ramsey would say, "You're keeping that thing around like it's a dang PET!" Seriously, are you kidding me?

The article says that you many need to extend it if you are in a hardship, or if you are in a career that doesn't pay very well. Ok, I understand a hardship. They happen and they are unfortunate, but because you don't make much money in your post-college career? They give you 10 years on a standard loan (as I understand it) to repay it. The article says the average graduate takes $21,000 in student loan debt with them across the stage to get their diploma. If you have 21K in debt to get a job that pays 30 grand, well that would be a BAD DEAL! But even on 30 grand you could pay that off in 10 years. Just 10% of your income would do that.

Oh....but wait. I didn't figure in some pretty important numbers into this equation. I mean, if you've just graduated and landed this awesome job, you're going to need a car. And heck, you've earned it by going through all of this schooling, so why not go get something nice. You can afford a couple hundred bucks a month, right? And you have to look good to your new co-workers.

And I forgot. You'll probably have to spend a bunch of money on clothes. You have to look good at the office. If you don't have a really nice handbag (ladies) or some great suits (guys), they probably won't think the same of you. That has to be factored in.

And lest I forget, we'll also throw in some money for eating out at lunch during the week, beers after work with co-workers, some new furniture for the possibility of having people over, and other things I might have forgotten.

Here's an idea: let's not try to attain or parents' lifestyle right out of college. Let's not try to make appearances to impress people who are either A:) well-established in the company and their careers, and have been where we are before or B:)are swimming in debt themselves trying to keep up with everyone else. Let's not be NORMAL. Normal is in debt. Normal has a spare room for Sally-Mae and Murphy to move in to. NORMAL is BROKE!

My wife and I got a pretty decent tax refund back. I withheld too much, and we got credits for having kids and my wife going to school. I would have LOVED to use that money on stuff. I could have easily purchased several new technology items, and she could have gotten some new kitchen gadgets (including a Kitchenaid mixer she has been wanting for a long time). We could have gone on vacation this summer and had fun with more stuff we bought. But that would defeat us in the end. We're trying to get out of debt. If I would have spent $1,000 on a new HD Camcorder, that would be $1,000 less to use to pay off the credit card. The credit card was carrying a balance of $1,100. That's a thousand bucks of STUFF that we already bought!

I know this is a crazy idea, because I wasn't thrilled about it myself. But we finally PAID for $1,100 worth of stuff we ALREADY OWN! We are finally free from the shackles of VISA!! After three or four years, we finally have paid off our credit card! It feels great! We even had extra to put on our mattress. Yes, we took out a loan on our BED. We borrowed against the thing we sleep on every night. Now we own over half of our bed. I'm nice, so I claim it's my wife's half :). I bet she sleeps better on her paid-for half :P

The point is (yes, I guess I'll finally get off the soapbox and make a point) that we have money BACKWARDS in our society. How many times have you bought something in cash (or debit card or check) that you didn't need while you carried debt? Don't we realize that one day we actually have to pay for those things we borrowed money to get? How many of you know someone who has died owing money? Do we really want to owe for the rest of our lives? Do we want to take this to the grave with us? I know we think that will never happen. "We'll pay it off" yeah, yeah, I'm sure. Then something happens. We want something new. Something breaks and needs replacing.

I will not go to the grave owing money. This nation NEEDS to get their finances under control, and quick. We can NOT continue living like this. It's starting with me and others who are finally sitting down and changing things. People who are FED UP with debt. People who want to change their family trees. People who will seriously change the world.


EC said...

Dave would so be loving you right now!! I agree - we are conditioned to borrow everything for god knows what reason when in reality we're just paying too much for it to begin with. 30 years for student loans?? Yeah, like someone needs to be 54 and ready to retire when they finally pay them off! Personally, I've been in default for mine for a very long time, but they are on my list of debt to be paid off on my dave ramsey plan :)

And tell your wife she has excellent taste - I want the Kitchenaid mixer myself - in bright red... ooh, i can just picture it now :) I could have bought that with my taxes too but alas, I paid Funny how we are way more excited when we do that!!

mike macon said...

Good rant. ;D