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Posts Tagged ‘student loans’

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photo courtesy of realtor.com

I’ve been thinking a lot about retirement lately. Probably too much, in fact, considering that I have at least 35-38 years of work ahead of me.

But honestly, I wish I had started thinking about it sooner. When you’re young and considering whether or not to start thinking about retirement, time is big money. I’ve recently abandoned my plan to pay down my student loans as aggressively as possible to be done with it within the next five years or so. As lovely as that dream was, I’ve gotten a little smarter since then. Instead, I could moderate my student loan payments, and begin socking away 20% or so of my income into a retirement account. This will cost me at least a few thousand dollars in interest, since my student loans will take longer to get paid down. But the great thing is that the difference between saving right now for retirement, and waiting a few years to start investing…will be tens of thousands if not hundreds of thousands of dollars.

(In theory, anyway.)

So, as I tuck away my pennies into my brand new IRA, I started thinking to myself, “This is for my condo in Florida!”

Then I though, “Wait a minute, I don’t want a condo in Florida! That sounds terrible!”

Why does everyone move to Florida when they retire? Presumably it’s for the warmth, though I don’t know that 90-degree days will be any easier to tolerate when I’m 70 than they are now. Longer days in the winter appeals to my Seasonal Affective Disorder, though according to weather.com, a January day in Miami is only an hour longer than one here in good old Indiana. I do like the idea of living near the water, but in Florida there are so many millions of people living near the water that you can’t even get close to it without having several million dollars to spare.

So I’ve decided that when I retire I might just throw all  convention out the window and move north instead. If nothing else, just to be contrary in my old age.

Of course, I haven’t discussed this yet with the one person who will be sharing my retirement home with me, but I have a feeling he wouldn’t mind saving a lot of money so that we can instead have a waterfront cabin on one of the Great Lakes. Or maybe a nice little cottage on the coast of Maine. Or an Oregon bungalow. The one thing we do have is plenty of time to discuss it. Trees, books, cats, a view of some water, and a little land to grow my green things on–this is all I really anticipate needing 40 years from now. That, and access to a good doctor.

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Every so often I consider an unfortunately major topic in my life: student loans. And every time I happen upon these reflections, it has a profound and not particularly enjoyable earth-shattering effect on my life and my psyche. I have long since left behind any regrets that may have crossed my mind with regards to my looming debt: leaving behind a full-ride to an honors college after my freshman year, choosing a major that has very little practical application in the job market, returning to school to pursue a new course of study and subsequently abandoning it, buying a Macbook Pro with my loaned money in the meantime…these aren’t the things that I regret pursuing, but I do regret not knowing better than to assure myself repeatedly that I would worry about the cost of it all later.

Because later is now, and looking over the figures nearly gives me a heart attack every time.

I know I’m not the only one in this boat. Student loan debt is soaring, and even has surpassed credit card debt in America. College attendance is practically expected of young people today. Not only that, but a bachelor’s degree no longer holds the same sway that it has in years past. Degrees are becoming commonplace, universities are hiking fees and tuition in fierce competition with one another, and the idea of learning a skill that is not backed up by three years of theoretical study in a higher learning institution is absurd. The more educated we become as a species, the more we need to study, and keep studying, in order to advance to the next highest level of discovery. You can’t even become a librarian without having a Master’s degree in Library Sciences. But what’s a librarian to do when her salary can’t cover the cost of six years’ worth of learning the intricacies of the Dewey Decimal System?

But banks and the government don’t seem to mind. Dishing out money left and right to anyone who will accept it for educational purposes is a good thing, right? Kind of like giving money to whoever wanted to buy their own home seemed like a good idea for a while. I’m no expert on finance or economics, but I can’t help but wonder what’s going to happen when hundreds of thousands of college graduates can’t afford to pay back their student loans because the economy can’t sustain the cost of their education. I recently met an acquaintance who openly admitted to her deliberate failure to pay back student loans. In her words, “What are they going to do, take away my education?”

As far as I can see, trying to take away a person’s education is about as effective as foreclosing on a house that nobody can afford to buy any longer. Now I’m not trying to say that student loans are the new housing bubble, but, well, I guess that is exactly what I’m trying to say. In my own supremely inexpert opinion, of course.

Thankfully, I’m not really the type to mull over these big-picture problems any more than it suits my passing amusement. I’m much more concerned about my own immediate challenge, and how I intend to meet it.

A few days ago I realized that, at the rate I was casually tucking money away into my Sallie Mae account, I was going to be approaching 50 before I could finally boast of being free from the shackles of my college education. I briefly considered returning to school to rack up three times as much debt, in order to obtain a career that would be high paying enough to pay off the entire load before I reached 45. The payoff didn’t seem worth the effort, so I’ve drawn up a new plan of action: good old budgeting, belt-tightening, and sticking to it to the glorious, debt-free end.

After a night of number crunching with the help of handy calculators (you may want to check them out if you are curious about your own impending payback), I have decided upon a plan which I affectionately refer to as 100 Months. 100 of anything doesn’t sound impossible, and I’ve convinced myself that I can settle for being debt free 100 months from now. It’s the ideal balance between acceptable length of time, and a challenging but (hopefully) not impossible payment goal for each month. And the best part of it is, I get to use my blog as a nifty tool to motivate myself and celebrate each month’s victory. If all goes as planned, I will get to look forward to posting my 99 Months blog by the end of October, 98 Months in November, and so on until the deed is done or the economy collapses again and all student loans are miraculously forgiven.

I think it’s going to be as fun as it can be.

🙂

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