My Take On: Rising Student Debt Levels



Perhaps with graduation season upon us it’s fitting that this bit of disheartening news was brought to my attention this past week. According to a survey done by Fidelity of 750 college graduates from the class of 2013, students on average are facing a post graduate debt level of $35,200. Granted this survey was a small sampling, the average debt load still struck me as astounding.

At the risk of sounding like an old man I’ll say that according to this study on student loan debt, around the time I graduated from college, a sampling size of my classmates were graduating with an average debt load of around $20,000. I myself graduated from college with a self-made debt hole of about $24,000. I anticipated that in between then and now in the face of our country’s recession that the average student’s debt load would have gone down during the last half decade. But alas it continues to grow with each graduating class.

I’ve covered this topic before in detail in previous posts but I’ll recap here in the face of Fidelity’s survey results. If I were graduating from high school this year and had nothing saved for college, I would enter the labor force and work my tail off to put myself through school without debt. Whether that would mean taking a minimum wage job, taking an entry level position through a staffing agency working simple tasks such as data entry, or working in a high turnover environment such as in an entry level sales role, I would put together a plan to cash flow my education. I would plan to earn as many credits as I could at a local community college and transfer everything I can up to the limit to an in-state low cost public college. It may take me 6-8 years to cash flow everything and finish the bachelor’s degree program, but I would come out with a degree, years of experience and no debt.

In the case of my future kids, my wife and I plan to max out annual contributions to an Educational Savings Account for each of our kids as they age from 0 to 18, investing in our diversified assortment of mutual funds along the way. At 18 we would encourage our high school graduate to work while they are in college, attend a local community college and apply to transfer to a less expensive in-state public university.

Debt is not an option when it comes to our family. And it breaks my heart to see surveys like this, and notice that as each year passes more and more of our students are making the choice to sign up for what statistically and through the power of compound interest, turns into a lifetime of debt.

Although the student loan debt monster can be slayed, why engage in the battle when you don’t have to? I can only imagine at how much further north my overall net worth numbers would be right now if I had come out of college debt free. It is possible to attend and graduate from college without debt. It takes a ton of work, planning and perseverance, but I firmly believe that it can be done whether you plan for your children when they are born or if you are just graduating from high school with nothing saved. It can be done.

And if you are staring down the barrel of student loan debt, please know that I believe in you and that payoff can be done. For me it took gazelle intensity and cutting my expenses down to the bare minimums. But I became debt free and paid off my $24,000 student loan and I know that you can do the same. I’m really nothing special. I’ve been right in the middle income bracket for most of my working career now. I just rolled up my sleeves, worked crazy overtime and wanted to be debt free more than impressing other people with material possessions and social outings. The payoff has been worth it and I sincerely hope blogs like this one encourage you to follow the same path up and over “Debt Mountain.”



My Book Review: "Start" by Jon Acuff

My perspective and emotions kind of ran the whole spectrum when I read Jon Acuff’s latest offering, “Start.” Admittedly the first two thirds of the book had me intrigued and hooked. Consequently it also caused me to reflect a great deal on how I got to where I am today in my career and evaluate where I want it to go, and probably more importantly, not go.

My wife gave an incredible piece of insight that eased the pressure I began to put on myself as I read the book. She shared that Acuff’s insights and attitudes towards work can be interpreted to breed a  workaholic. I thought about that for a minute.

What if I were to create and walk into my dream job? What if today the bridge between my day job and my dream job were merged and I began working in my passion. Say today I started work providing financial advising to middle income households? Then I state that I would be thrilled and passionate to wake up every day and get into work as early as I could to start changing as many financial lives as I could. I can see myself putting in long hours, early in, last one out, doing everything I could to analyze, dissect and nurture my clients. I would also be hustling on nights and weekends doing everything I could to network, because in that scenario I would be trying to reach as many people as I could, in hopes of helping them become weird just like me and do things like shun credit, use debt snowballs and get gazelle intense.

And when I pulled back from this view I analyzed where my time was being spent in the dream job scenario versus reality. In dream job scenario I live, breathe and dream providing financial advice to families, and in doing so I would neglect my own. In reality I am in like with a job that I don’t love. With 12+ work hour days occurring only a few times a year and weekends not the norm to come into the office, in this reality I have that much more time to live, breathe and dream about my family. Time to nurture my relationship with my wife, with myself in therapy and time to be an active participant in my faith community.

 It’s actually quite the trade-off. And if my dream job popped in front of me tomorrow with enticing bait, it wouldn’t exactly be a slam dunk for me to abandon my current post. I enjoy having time available to seek and find fulfillment in my life. Do I wish I were in my dream job? Of course I do. But the trade-off of time certainly makes me think twice about turning the career dream into reality.

But back on point to the, “Start,” review (I tend to get sidetracked). For the first two thirds of the book Acuff does a great job of rewriting the ways that we see our career tracks. The assessment of the traditional model from years 20 through 60 were profound and his suggestions are definitely reasons enough to give this book a read. Jon’s exuberance definitely leaps off the pages, even so that at a few points he reminded me of the overly caffeinated cheerleaders at the school pep-rally.

The last third of the book goes fast as Jon provides some checklists and tips for after the last page is read. Unfortunately though he doesn’t do the smoothest job of transitioning and weaving between checklists and his normal writing style, as the two get blurred by the end of the book.

But regardless, I found “Start” to be a great read and certainly thought provoking.

My Mother's Day Stepping Stone

This past Mother’s Day was somewhat of a monumental one for me. After having worked with my therapist for several months leading up to it, I decided to do a quick trip over the weekend to Los Angeles to drop in and surprise my mother. Now there are a few things that made it monumental, of which included: I ventured to visit my parents by myself for the first time in nearly 8 years and I took the opportunity to share my heart and feelings with my mother and father.

I don’t know how else to describe it other than to tell you how the event went down. As I pulled into my parents’ driveway with the rental car obtained with my DEBIT card J I noticed that my father was hanging out in the garage and that my mother’s car was missing. He promptly told me that he had done his best to try to keep my mother home for her “surprise” but was defeated in the end. She had stepped out of the house for a few hours to CO-SIGN AN AUTO LOAN for a family member. AHHHHHHHHHH!! Is what screamed in my head then and still does at this moment just thinking about that.

But nevertheless I saw this as an opportunity to talk with my dad one on one, just as I had rehearsed with my therapist. I lead off just by catching up, seeing what’s going on in each other’s lives and asking him how he was coping with his neighbors’ recent passing. From there I transitioned into conversation that had the potential to be wildly volatile. I lovingly embraced my father and looked into his eyes and told him that I loved him and that I cared about him, and that although I was not mad at him, that I needed to hear him tell me that he loved me and that I needed an apology from him.

I proceeded to tell him the toll that his excessive drinking took on my life and my perception of the world. I shared that his stifling influence to hold my mother back from expressing her love for me physically, tormented me into my adult life, causing me to never seek out meaningful relationships. I also told him that I walked away from his house at 18 with an unbelievable negative amount of self-esteem, that I felt worthless to the world and to myself, and that it nearly cost me my life and my marriage through anger, hurt and addiction.

But I also told him that I understand that he did the best he could. That it was not easy moving as a child to another country and having to learn everything from scratch, from language to daily life. And that I could not imagine what it would feel like to have attended my brothers’ funerals as he did, with the feeling that they were taken too soon.

And I also told him that I have been taking responsibility for my own life as an adult. That I have been engaged in therapy and a recovery process. And that I am the happiest I have been in my entire life, but I still wanted a relationship with him that is better than what we have now. I did not excuse the trauma or say that it was okay. I just re-emphasized that to get to a better relationship that I needed to hear him say two things: That he loved me and that he was sorry.

Then something unexpected happened. As the tears ran down my face and my side of sharing the discussion was finished, I saw tears began to well up in my father’s eyes. Without hesitation he told me that he loved me. And he also nodded and shared that there was so much he felt he could have done better as a parent, and that he was genuinely sorry for the pain in my life that it had caused.

We embraced each other through probably one of the most meaningful hugs I have ever experienced in my life and I kissed my father on the forehead.

I thought I was prepared for the entire ordeal and analyzed every which way the conversation could have turned. But alas, my therapist did not prepare me for what would happen if everything went well. I felt loved, cared for and proud to call my dad my father. It was not on my expectation list to even have my father respond. I expected him to either throw me off his property or sit back in silence and tell me I was crazy through his body language. But instead he listened to me, something that never happened from 0 to 18, and his eyes and body language showed empathy and compassion, and it was happily indescribable.

When my mother began to back into the driveway I swiftly sprinted to the inside of their house to retrieve the flowers I had purchased for her to surprise her. As she stepped into view I made myself visible and in a calm voice said, “Happy Mother’s Day,” she jumped back in disbelief and looked like she was an emotion or two away from having a heart attack! She began to cry as we hugged and told me that she was so happy to see me.

We used the time together to catch up on life, work (which my mother in her new position is thoroughly pumped up about) and just about everything in between. I genuinely wish that the time spent together was longer, but it was a great stepping stone to what I hope is the road to a stronger and healthier relationship with my parents.

My main goals were to just show them that I love them and care about them, and tell them that I wanted a more meaningful relationship, and that when they were ready I would be there with open arms. What I received felt like exact reciprocation. This was completely unexpected. And while I know things will never be perfect and individuals (especially THIS ONE) are flawed, I feel like my parents and myself are on a much stronger footing to re-engage being involved in one another’s lives again.

I don’t know what your situation is. Perhaps you have endured abuse on a lower or greater level than I did during your developmental years. But I would like to share that for a long time I felt a bleakness and overall feeling of despair when thinking about my family or origin. It drove me to a point where I came within inches of losing everything meaningful in my life because of it, through my own choices. I never even thought we would have the hope of being anything more than acquaintances and people that used to know each other. But the work that I have put into therapy and healing myself along with being vulnerable and honest with the people that I love has truly set me free from the toxic attitudes that I held toward myself for decades.

There’s still a lot of work to be done and a lot of phone calls and trips to be made. But on the flight back to Chicago, all I could think was that I am truly happy with exactly where I am in life, right at this moment. 

My Career Track Chronicle?

So I have been stuck in a bit of a rut lately. It is an odd rut, odd because just about every other aspect of my life, aside from a single aspect, has been firing on all cylinders lately. Following boatloads of work and intentional action my wife and I are thriving in our marriage. We are talking, sharing, relating, putting each other as a priority and are ready to take on whatever our next phase of life looks like together, as a team. Relationally I am still baby stepping my way towards healthy relationships with extended family and friends. And spiritually I feel like I have been thriving. I have been taking more intentional actions to be a part of my spiritual community, and frankly, my pastor’s sermons – for the most part this entire year – have been home runs every single Sunday.

But then there’s the career track. Perhaps it is because I just finished Jon Acuff’s new book “Start,” (review on the way soon), but I have been assessing how I got to where I am today. According to Jon, if I stay on my current track, I will rack up years of service with my current employer, moving up ranks in title and likely to change a few departments and divisions along the way. According to Acuff, that’s the average path. The awesome path is blazed with passion, mystery, intrigue and the well calculated risk.

So I’ve been asking myself how did I get to where I am, and where do I want to go. To be honest the safety of planting myself in the “safe organization” and plucking away at the next few decades, having only changed job titles and descriptions, does not really sound appealing to me. But I don’t know where I want to go either.

Branch out on my own and be a personal financial advisor to median income households? Try to monetize this blog? Become a freelance financial writer? Go back to college, earn a teaching degree and teach personal finance and coach basketball to high school students? I’ve weighed each of these paths and while I believe each are attainable and can be reached with enough effort and hustle, I still haven’t pursued them.

Why? I think the fear of change and let down are what paralyze me. Right now our household has a steady stream of income, no debt, health insurance, a savings plan to travel, buy a house and retire with dignity. Add on top of that the anxiety that if I go down the path on any one of the aforementioned ideas, that there’s a chance I could feel the same way about that career as I do today; rudderless and not doing what drives my passions.

Which makes me wonder how someone (mainly me) can be approaching 30 and not have nailed down what his passions are in life. And as I mentioned earlier in this post, I can’t get over that this one area of my life almost makes everything else that I’ve worked so hard for seem to fall by the waist hand.

But what surprises me most is that these feelings and this revelation to myself has occurred AFTER getting my financial act together. When I was in the early stages of the baby steps there were easily defined goals and dreams: Baby Emergency Fund - check, pay off debt - check, fully fund emergency fund and start saving for retirement – check, get the right insurances – check. And now that I have the lofty goal of running the marathon and saving to pay cash for a house, it is now, after 4 years of being personally debt free and almost a year of being in a debt free marriage, that I am pulling back to assess where I want to be in my career.

So where do I go from here? I plan to take a good hard look and assessment at balancing where I derive value from in the day to day. I love being a husband and am learning to be a better Christian, friend and family member to others. I want my relationship with God and with my wife to be the driving force of my day to day happiness, rather than the frustration of not knowing where I want my career to go. I feel that it’s ok to be concerned with my career track, but I don’t want it dictating my mood day in and day out.

What I will try is starting at the end. I plan to picture myself in my golden years, sitting on a rocker, and think about the kind of life I would want to look back on and be proud to have lived. What’s important, what’s not, and everything in between. Maybe that would be a good starting ground to gain some perspective. And I’m looking forward to sharing the results with you here. So stay tuned, I know I am! J

My Mattress Hunting Expedition

So apparently I’m in the market for a new bedroom mattress. Over the last few weeks my wife has pointed out to me that our current model is no longer up to speed. Persistent neck aches, possible pinched nerves, what feels like non-stop mattress flipping and a sinkhole located in the middle of the mattress have undoubtedly brought me to this daunting scenario.

I find the entire ordeal of mattress shopping to be tiring and cumbersome: from the initial sticker shock that I was not prepared for to shopping for something that makes me feel like an adult, I definitely have a few apprehensions just thinking about this task.

From 0 to 18 my parents furnished my bedroom as I went from crib to a kind of sort of “larger”  twin mattress. In college some apartments were furnished with a mattress and in others I learned to make a good use of sweatshirts that were not needed to be worn in a tropical climate, but made for great mattress substitutes. Thankfully after college when I lived in New York my shared apartment was furnished as well.

Which brings me to Chicago. For the last 6 years my wife and I have made due with a queen sized mattress from the teenage bedroom of her parents’ home. 6 years is probably a bit longer than a mattress should last, but given that it’s been known my wife longer than I have, I’ll admit that there more than likely may be an issue or two with the mattress’ durability at this point.

So yesterday after church we checked out one of many mattress stores in our neighborhood. My eyes went straight to price tags, and my wife’s body bounced from floor model to floor model, testing the waters of just about every mattress in the store. When she coaxed me to lay next to her and test them out as well, I quickly learned that mattresses really don’t mean anything to me.

Yes, some are soft and some are sturdy, but truth be told when I go to sleep I typically curl up into a ball, get comfortable on my pillow and really don’t give two licks about the kind of mattress I’m on when I fall asleep. Air, water, soft, a futon, it doesn’t matter to me. As long as the lights are out and I’m not freezing cold, I can fall asleep anywhere. But as Dave Ramsey points out in FPU, sometimes as a husband, even though I don’t intellectually “get “ the concept of buying a quality mattress, I just have to physically “get” the quality mattress. My wife’s comfort and peace of mind does mean the world to me, I just didn’t expect her to call me on it.

So the sticker shock definitely threw me. In the particular store we walked into most of the makes and models that my wife liked were upwards of $800 and included free delivery and removal of the current mattress. I seriously walked in expecting to spend no more than a few hundred bucks. So we did what any other good Ramsey follower would do, we went home and my wife lovingly began to price shop and get a pulse reading of what a mattress of her liking cost on average.

We came to the conclusion, for the make and quality that she prefers, that we should expect to spend no more than $600. I think when we walk into the store and flash $100 dollar bills at the sales manager that we can snag the free delivery and removal as well, but I will keep you posted on how that goes.

In the meantime we are still doing our fair share of homework to make an informed buying decision on this considerable purchase so that we do not overpay. We’ll also plan to price shop and buy locally from a vendor in our neighborhood to help lock in a free delivery.

For this month we will press pause on sending a large amount of our monthly disposable income for saving for our house and set aside in cash our mattress ceiling price. After doing our homework and knowing where our price ceiling is, we plan to walk in and make a cash offer to see what kind of deals will open up to us. On a side note, a warranty is not a benefit to me. If I need a warranty, then that means the vendor is selling me a trash product that is likely to break down. But if the item purchased truly is a lemon, I have my emergency fund to cover the cost and can self-insure, I don’t need to pay an extra fee to a vendor for the privilege.

So stay tuned to see how my mattress buying expedition turns out later this month.

My Tough Love for my Fellow Middle Classians

Perhaps I’ve been getting my NERD on more than usual following Money Smart Week, but my attention has been turned yet again to another survey. In this one, completed by the Allstate-National Journal Heartland Monitor Poll, the pulse of the middle class was taken and by and large it did not paint a rosy picture. Here are a few highlights:

• 54% defined middle class as those who could keep up with bills, not get TOO buried in debt and not lose their jobs
• 40% said it is only realistic for the “upper class” to pay for a child’s college education, retire comfortably and survive a health care emergency
• 64% believe Congress is making things worse for the middle class
• 55% said major financial institutions are making things worse for the middle class

Now normally I would respond in a loving fashion with a healthy dose of optimism, and say something like, “If more people would follow Dave Ramsey’s total money makeover plan, they will find the light at the end of the tunnel.” But today I’m feeling a bit more rambunctious than usual.

Particularly what irks me is that the majority of those surveyed feel that it is out of their control whether they succeed financially. More than half feel that the government and financial institutions are out to get them! In other words, as I will happily translate, those surveyed stood and declared, “The people I voted for and the debt I signed up for are keeping me from where I want to be financially.”

Bull…you know it and I know it. To me the idea that something outside of ourselves can hamstring us financially, conversely means that those same outside forces are responsible for making me thrive financially. My employer did not welcome me with a bouquet of flowers and a one million dollar a year income just because I breathed air. I provide a service for work that they need to be done and they pay me what they deem to be market value for that work being done. If I didn’t think the value was fair or that I could get paid more for the same line of work elsewhere, then I would proceed to find something elsewhere.

And as for the government wreaking havoc on the middle class and single handedly stifling our financial prosperity: it’s just not true. I’m just as big a critic of the US government as the next blogger, but short of them taxing my earned and investment income at 90%, it’s simply false to even think that they have control over any aspect of my financial prosperity.

To the middle class naysayers I’ll assert this: I’ve been living and existing in the exact same economy as you have. I worked my tail off and made sacrifices to get to where I am today. I got on a budget, lived on less than I made, stopped borrowing money and paid off all of my debt. I’ve also invested for growth in the stock market and have been receiving better than expected returns. The government, corporations and “the upper class” had absolutely nothing to do with the decisions that I made, make and will make in the future.

What I found even worse were some of the personal commentaries extracted from the study:

A graduate student shared, “The middle class has become a treading water position…Opportunities have been stifled in the past 20 or 30 years.” A suburban dad noted, “I feel sorry for my kids – they’re just getting out of college – because they have nothing to look forward to. They’re not going to have the ability in the near future to buy a home. There are thousands of people who are going to be stuck with their student loans.” The last gem was from a trucker, whom added, “Everything is going up, but wages are staying the same. By the time I retire, I hope I have Social Security, because other than that I’ve got nothing.”

Point 1 – We have to make our own opportunities. Although I do not envision myself to be a business owner, I plan, through our financial decisions to live on less than we make, never have debt and pay cash for our house, to one day work a part-time job and live primarily off investment income. This way I can spend more of my time with my family, friends and volunteering for organizations and causes that touch my heart. I have my roadmap and I’m making small intentional choices to get there.

Point 2 – Suburban dad, it was your (and your dumb kids) choice to take out loans for college. You could have had them go to a community college, transfer to an in-state 4 year university and work their way through college paying their own way. Sure, it might take 6 years to cash flow it, but your kid would come out with a degree, no debt and work experience. Sounds like a better option than student loan debt that gets carried around for decades. And unless you can put at LEAST 20% down on a home, you shouldn’t buy one.

Point 3 – Dude, if you see the oncoming train of despair coming right at you and you make 0 changes to avoid that oncoming train, then man, I think you get what you deserve. Say this trucker is 50 and started working at 20. If he had put away $100 a month during his entire working lifetime, and let’s just say he made 8% on his investments (in my opinion, a very modest goal), then this dude would have $150,000 in a retirement account. And at 59 ½ he would have over $300,000 thanks to the power of compound interest. That $300,000 self-funded retirement picture looks a lot rosier than relying on Social (In)Security to eat.

Truth be told as I come down off this soapbox, I have to admit that I do not know these people’s stories. I don’t know what their car payments, job layoffs, loan balances or their budgets look like. Do they have large income shovels or small income shovels? Statistically I can get an idea through surveys like this, but I will never know the individual, unless I know the individual. So all I know for certain is what is happening under my roof. And under our roof we have made a lot of the tough choices through the last 4 years to live on less than we make, invest wisely and put the right pieces in place to not only thrive, but withstand storms through tough economic times. Through God’s word in how to handle money we have thankfully prospered and are looking forward to living and giving in ways we used to only dream about. But we pulled ourselves up to get there. A tax break didn’t do it, a government program didn’t help me find term life insurance, and my employer doesn’t force me to live on or off a budget. We bootstrapped and put the financial prosperity wheels in motion. It may be slow, it may be ugly to financial snobs, but step by step, quarter after quarter we are getting to where we want to be. 

My Evolving Priorities

Admittedly at first glance it may appear that we no longer know how to have fun. In fact when I was even thinking it over internally I began to question it myself. This whole notion though kind of jump started at my prompting. My wife and I have been talking about having kids and raising a family a lot over the last year, and there’s a very good chance (at LEAST over 60% by my unscientific count) that this will be our last spring and summer as D.I.N.Ks. (double income, no kids).

So I asked my wife because I was kind of short on ideas, “What can we do to really embrace our last warm season with just you and I?” And she looked back at me with the same blank gaze that I gave myself in the mirror when I posted the question to myself just ten minutes earlier.

It’s not that we don’t go out. Just this last week we took on the following just between the two of us: 3 Smart Money presentations, a free independent movie screening, I had gone to individual counseling, beginning production on a new business venture (and with low cost, more to come later), a weekly small group gathering AND meeting up for an FPU class.

So we’re not short on extracurricular activities. In fact we were both exhausted by the middle of last week from our frantic schedule. But when I pulled back and essentially asked myself and my wife, “What do we want to do for fun that we won’t be able to do with kids for one last time?” The answers were pretty slim.

My knee jerk reaction was to spend Spring and Summer nights venturing all over our city’s great neighborhoods, catching great live music acts at our favorite venues and bar hopping until last call. But then I recalled that since Easter I’ve had two beers and they were both at a wedding we went to in Arkansas. Since we’ve switched to juicing morning meals and evening snacks daily, I’ve had less of an inclination to eat unhealthy foods, and have been even more reluctant to drink alcohol.

So we could bar hop and go hog wild on water, but just the idea of staying out late until the sun comes up and being completely unproductive the next day just sounds draining to me. For anyone that knew me in college, you are probably thinking that I have been a victim of body snatchers and the aliens are already making their way across this planet. But I assure you there has been no such abduction; I guess I’m just starting to grow up.

In my pre-Ramsey days, my checking account and credit card balances were not the only things that I failed to pay attention to. The truth is that I made a ton of really bad health decisions from what I ate and what I drank. Fast food was pretty normal for me a few times a week and at every party and outing I was the life of the party and fit right in with the rest of the inebriated crowd.

But this is very clearly not the person that I am today. These days I find myself more concerned with getting enough sleep before work the next morning and not being out too late on a Saturday night so I am refreshed for church and lunch with my wife on Sundays. And you will never catch me eating fast food, I know it comes across as pretentious and when I was in high school and college that I used to make fun of people (viciously mind you) that sounded like this, but it’s genuinely true: I truly enjoy taking care of my body and feeling good.

McDonald’s, Budweiser, being out until the sun comes up, going home with ringing in my ears from a band’s speakers being too loud, it all just does not sound appetizing to me anymore. Which even as I write this is something that I kind of can’t believe that I am writing.

So what do we plan to do for what might be our final Spring and Summer season as D.I.N.Ks? Aside from a few planned trips, I for one am looking forward to being out on the lakefront with my wife and strolling through our neighborhood on warm evenings with gelato in hand.  I’m sure some live acts, street festivals and our favorite music venues will see a few turns, but I think for this summer we are going to be more intentional to try our hardest to slow life down and just embrace and enjoy the company of one another.