SAVING MY PENNIES - SPECIAL GUEST POST
Today's post is a guest post brought to you by Samuel Moore-Sobel freelance writer and author of the memoir Can You See My Scars?
Samuel's financial story
I know all too well the feeling of being in debt. A truly undesirable position in which to be. Finding yourself in such circumstances can weigh on your consciousness, even serving to distort your perspective. It can cloud out all other financial considerations, and can pre-determine the future in frightening ways. Carrying unnecessary debt is something most of us know should be avoided nearly at all costs, or eradicated as soon as possible.
Some interesting statistics on debt
Americans are known for having a propensity to live beyond their means. Recent research found that Millennials are most likely to be in debt, a reality 81.5% of adults falling into this generational category currently face. Older generations typically decry the spending habits of Millennials; however, baby boomers are not all that much better at avoiding debt. Nearly 80.9% of those belonging to the “The Greatest Generation” are in debt. These numbers include mortgages, of course, which based on current tax law can be considered an acceptable form of debt. Regardless, millions among us owe money to creditors, a reality packed with long-standing implications for the future.
Understanding debt and how it works
Just a few years ago, I would have easily fallen into one of the categories stated above. Family members frequently spoke of the dangers inherent in carrying debt during my childhood, offering words of financial advice to my young ears. The reasons for going into debt entirely eluding my young mind. As is often true of childhood, adult missteps seem so incredibly easy to avoid. Until adulthood is reached.
Life before college
Everything changed during my senior year of high school. Classmates were abuzz at the prospect of attending college. We were encouraged by teachers, mentors, and trusted advisers to visit universities regardless of the price tag. Tuition costs were meant to be ignored, in favor of finding an institution that would provide a fantastic “college experience.” Friends of my parents waxed and waned about their college days, expressing a deep longing to return to an earlier age. After hearing their never-ending stories, I could not wait to begin my ride upon the university train. For, few things in life seemed better than attending college. The college years I chose a school in Pennsylvania, located a few hours away from my home. I set out to embark upon a new life, eager to leave behind the memories of high school; and, by extension, my youth. Residing in the same locale for an extended period of time can sometimes produce a feeling of predictability, leading one to believe that a change in zip code may lead to an exciting change of pace. In order to finance my promising new adventure, I secured several thousand dollars in student loans. These loans offered as a result of filing my FAFSA application. The .gov contained within the URL offering an added sense of legitimacy to this alternative route. It all seemed so normal, even encouraged. A few thousand dollars were “subsidized,” while a few thousand dollars were classified as “unsubsidized.” Google searches failed to provide much more clarity, returning countless articles in favor of taking out student loans. Some of the stated benefits? Building up credit history, especially if the payments were made on time. Plus, the loans were not due until after graduation; and, even then, extensions could be granted. Upon consideration of the evidence presented, my initial hesitation towards the idea of obtaining student loans slowly began to evaporate. I spent my first few months at college ignoring the loans in my possession. I figured all would work out in the end; everyone else was doing it, right? Scholarships and additional assistance offered by extended family members ensured I could make it through my first year without taking out additional loans. With no money due, the consequences were far from my mind.
He began to realize the scary truths of student loan debt
My nonchalant attitude reversing the moment I began hearing stories of graduates possessing debt totaling in the thousands. Frightening tales detailing the realities of drowning in unpaid bills. I assumed I would easily secure a job post-graduation, just as most college students do, ignoring the difficulty in navigating the job market as a young adult. Shedding my naiveté only after watching friends enter the real world with no job in sight. Decent paying employment was harder to secure than I once believed. I saw countless classmates come to regret the decisions they made regarding the loans to which they once so readily agreed. The truths once readily accepted soon morphed into nothing more than an artificial façade, leaving us all far more fearful over the future than we once had been. As a result, the debt I was incurring began to gnaw at me more and more with each passing day. As winter transformed into spring, I received startling news. My tuition bill would be going up at the end of my freshman year. The mix of financial aid and scholarships offered in the previous year would not extend to the next. I struggled to understand the reason behind this sudden change, considering my high grade point average. What transgressions had I committed to warrant having my financial aid seemingly revoked? Only with the passage of time would I learn the truth of the matter surrounding those tumultuous days. Colleges have made a practice of employing a sort of “moving the goalpost” tactic. Institutions (especially those that are considered private) “engage in the increasingly common practice of luring freshman with generous aid and then cutting their support.” A bit of knowledge not often possessed by students and their families as they make decisions regarding higher education. This turn of events left me greatly distressed, causing me to feel even more alone as I waged this battle against my chosen college. I attempted to secure additional aid to no avail. I worried constantly about the future, unable to see a way out of the financial hole I had willingly placed myself in just nine months before. Waking up one morning with a heavy heart, a light bulb seemingly went off inside my head. What if were to transfer to another institution?
Smarter financial decisions were made
I did a bit of research, quickly gleaning that I could attend a higher ranked institution for my major (government) while offering classes for a fraction of the price. The college, located near my parent’s home, was one to which I could commute. The projected savings started to quickly add up. After a few days, the decision seemed like a no-brainer. It was time to go back home. Not long after my return, I began receiving letters regarding my student loans. Eager to rid myself from what felt like a heavy financial burden, I took a job selling used cars. Working long hours and enduring plenty of abuse from customers, I quickly grew discouraged. Until I thought about the thousands of dollars still owed. The sick feeling pervading my stomach kept me going through the hard times, the prospect of being free from debt propelling me forward while working a miserable job. Some argue it is wise to pay off debt gradually, making consistent payments each month instead of paying off lump sums. This may be a good course of action for those looking to implement healthier spending habits. Similar to crash dieting, slowly paying down debt might lead to better outcomes than doing so all at once. However, I chose to aggressively pay off my loans, becoming entirely debt-free within just three months. Admittedly, I was aided by living at home. Yet it still took effort to aggressively rid myself of student loans. It meant forgoing meals out, and limiting my spending to only the essentials. Once the loans were paid off, my savings account was empty. I continued working, eager to build up my reserves in the wake of achieving a debt-free life.
Financial lessons learned
I learned a valuable lesson from my experience with higher education. Debt is truly something to avoid. While it may be tempting to run up a tab on a credit card with high spending limits, the short-term gain does not offset the long-term pain. Each month, my credit card bill is paid in full. I have yet to initiate a car loan, and plan to avoid doing so in the future. The only form of debt I have ever taken on since paying off my student loans is a mortgage on my home. Matters concerning money are often learned through experience. Few high schools require their students to take courses focusing on basic concepts such as balancing a checkbook or making wise investments. More must be done to prepare students to navigate financial matters upon entering the real-world. Until then, experience is likely to be an important guide. As are the words offered by those who have come before us, as we attempt to avoid falling prey to the same pitfalls that have ensnared so many others along the way.
Samuel's advice to high school students
Samuel Moore-Sobel
For students and families beginning the process of considering colleges, beware of the price tag. No degree is worth mortgaging your financial future. For those experiencing the crushing weight of debt, take heart. Careful, disciplined planning can ensure that freedom is well within reach.
Samuel Moore-Sobel is the author of the memoir Can You See My Scars? His book is available for purchase on Amazon. To read more of his work, visit www.samuelmoore-sobel.com
