Or Lincolns… or Washingtons. Let’s be honest, I’ll take what I can get.
Make it Rain
Brunch, cabs, happy hours, shoes, cabs, cabs, cabs, food… Living in NYC isn’t cheap — especially if you want to have a certain kind of lifestyle. Despite making a decent amount of money for someone my age, financing my life isn’t as simple as you may think.
For the past couple of years, there has been a big hoopla in the media about the rising costs of higher education. I distinctively remember walking by the Occupy Wall Street protesters one day (end of 2011/beginning of 2012) when a specific complaint caught my attention. A small group of people were complaining about student loans. One guy in particular had over $50k in debt. He had a job and was slowly paying off his debt but was complaining about the fact that he now owes more than what he borrowed. At the time he was living with his parents and they were also helping him pay down his balance.
I’m going to go on a little rant here, so please, bear with me. I come from a very modest family. My parents are small business owners (they are the only employees). Any time my parents aren’t at work means they they aren’t making money. For my parents, bank holidays weren’t fun three day weekends but days they get to rest or prep for their business. Such is plight of a small business owner–you’re never really “off” from work because there are always things to do or worry about.
When it was time to go to college, I knew that I would have to finance my own education. I applied to a number of schools and got accepted and received varying degrees of financial aid from each of them.
– Public universities gave me full rides plus more
– Private colleges offered me from 75% to as little as 25% in financial aid
The difference would have to be made up by student loans. When choosing a university, I considered many different factors, including the expected amount of debt I would graduate with and the likelihood of finding a job. I was rather pragmatic in my approach and chose to double major in a “hard skill” major (math, science, finance, etc.) with a more interesting “soft skills” major (communications, journalism, anthropology, etc.). The reason for this was to ensure that I could maximize my marketability in the job market post graduation.
I worked my ass off in college. I worked roughly 20 hours a week at various (paid) internships while attending school full time in order to gain work experience and stand out from my peers. It was a long and difficult journey but my diligence paid off and I was able to secure a full time job in finance by November of my senior year. By the time I graduated, I amassed enough debt to buy roughly 8 cars or a nice house in the suburbs. The aggregate sum was and still is a bit intimidating–but I knew what I was getting into when I chose to attend the school that gave me the least financial aid.
Even at the young age of 18, I knew that the concept simple and compound interest. This is a concept we all learn (or should have learned) in middle school. Logically, why would a financial institution loan you thousands of dollars without expecting anything in return? Let’s be honest, nothing in life is free. I do believe that the cost of higher education in the United States has become ridiculous. It is incredibly inflated and definitely needs some sort of reform.
HOWEVER, I do not believe that the banks, the government, or “the 1%” is responsible for your student loan debt. I chose to to incur debt for my education and I take responsibility for it. I knew that if I didn’t find a job, I would still be on the hook for my loans. I knew that I was taking a huge gamble. For this reason, I made sure that I did everything I could to ensure that I would be employed post graduation. I had two majors, a minor, worked 20 hours a week and still managed to hang out with my friends and do well enough in school to find a job. I knowingly did not major in something with low practicality, scarcity of jobs or a very low starting salary because I was choosing to go to an expensive school, so the stakes would be higher. Now had I chosen to go to a state school (with a full ride), I could have been more risky about choosing my major since I wouldn’t have the financial burden once I graduate. I literally could have afforded to take that risk–but I didn’t.
When I saw the Occupy Wall Streeters, I was so irritated. The guy was complaining, not only about the cost of education, but the fact that he would have to pay for his student loans for the next 20 years. He and the other protesters were demanding debt forgiveness. For me, this made absolutely no sense. While I commiserate with the general suckiness of having debt, the protesters complaints were mainly unfounded in my opinion. Now I don’t know any of their specific stories, but I can tell you this. No one forced them to go to an expensive college and no one forced them to pick a specific (or less marketable) major. The difference between the protesters and me was that I chose to work while going to school. I chose my specific majors for specific purposes and I chose to incur student loan debt. I had more student loan debt than the people protesting and had absolutely no monetary help from my parents. I think if anyone should be complaining, it should be me–but I’m not.
After graduating, I’ve been very responsible about my loans and have already paid back half of what I owed. I’ve done this by paying more than the minimum amount per month and by paying off the higher interest rate loans first. Every single tax return I’ve gotten has gone straight to my loans. Despite this, I still go on nice vacations, take cabs, and have fun on the weekends. This is all attributable to good budgeting and intentional decision making.
Look out for Budgeting (Part II) for specific ways I manage my finances.