Dear Katherine

There’s a girl whose blog I read on an irregular basis. The reason I read her blog is because she’s an APO brother (I used to be an APO chapter advisor, and I’m a life member as well), and I ran across her website a few years back when I was doing some sort of search on APO, so I just sort of look in from time to time to see how a brother is doing.
(Yes, in APO, which has been coed since the 1970’s, the ladies call themselves “brothers”. They think it’s cute.)
Anyway she has lately bemoaned the fact that she’s paying a buttload of money every month for student loans, particularly in interest. And without actually writing to her (I don’t have her address, and you have to register on her site to send her email, apparently), I just have to comment, because I can’t keep it bottled up inside anymore.
Honey…you say “I wish I could get out of debt.” Yet at the same time, in the past couple of years or so since you graduated, got your job, and started grad school, I clearly remember that you have
– bought a brand-new SUV
– moved twice into expensive apartments (well, you don’t live in a cheap city, but you could get a roommate)
– bought one or two new computers (seems like you bought a desktop then a laptop)
– bought exercise equipment and a gym membership that you don’t use
– gone out to eat a lot
– gone to Vegas at least once
– bought some really nice furniture
– have mentioned that you want a DDR or flat screen TV in the next year
– bitched about the price of gas but haven’t stopped driving
– driven like a bat out of hell and then bitched because you got hit with expensive tickets because the cops are out to get drivers instead of keeping houses from being burglarized, etc.
Now, I have no idea what you make at your job (although I imagine it isn’t really jack since you just got out of school and are probably working at some butt-numbing low-level desk slavery), but all of this suggests to me that your debt is primarily due to your conspicuous consumption. If you really want to get out of debt, and most of the debt is student loans, then you really have to consider the following:
– stop buying things just because you want them
– stop doing things (like taking trips) just because you want to
– make do with used instead of new whenever possible, and just make do without if used isn’t available
– eat at home, and eat simple foods that don’t take a lot of expensive ingredients
– sell that SUV and buy a compact car that uses less gas — or don’t own a car at all, you live in a city with excellent mass transit
– sell the exercise equipment and try mall walking, or other exercises that don’t require expensive equipment (and don’t renew at the gym unless you make a committment to go, and then stick to that committment)
– strongly consider getting a roommate to help with the rent
The bottom line is that you’ve realized that you have a debt problem, so now you have to take realistic steps to solve that problem. Part of that includes becoming more grown-up than you are at the moment and accepting that you put yourself into this situation.
And while I’m talking to you, I’m not aiming this specifically at you, either. I’m sure there are a lot of new grads out there who need the same sort of blunt-spoken advice. I was there myself back in ’94, when I finally left the university after a 10-year sojourn and got a real job in a different city where prices were a lot higher than I was used to. At the time the car I drove was paid off (I had bought it new when I started grad school, but it was a Ford Escort, not a fancy SUV), and I drove it for a total of eight years. I’ve had one new car since then, and that car is over 4 years old (2002 Dodge Intrepid), but I was making a lot more than you are when I bought it (plus I have a wife who contributes income, and our household income is staggeringly close to $100K/year).
The nice things come with time. As you grow in your job and become more valuable (and make more money), you can afford more luxury. But it is a fool’s game to think that you can drive the fancy car and live high on the hog right after getting out of school, because entry-level salaries aren’t designed to let you live that way. It sounds like a lot of money, because you’re not used to making a lot of money. I’m here to tell you that it isn’t, because I’ve been there and done that.
If you see this, I hope you consider carefully what I’m saying. It is no fun to be in debt (I’m paying two mortgages at the moment myself). Your job right now, should you choose to accept it, is to conserve all the cash you can while paying down that college loan. If that means you buy the store brand instead of the national brand, so be it. Every little bit helps. If you really work at it, the college loans can be paid off and then you can kick up your heels.
Not before. As you’ve already seen but are apparently unwilling to accept.
Best,
Nathan
PS: The Koranic verse you quoted recently as part of the email forward you posted does not exist. Surah 9:11 actually says “But if they repent and keep up prayer and pay the poor-rate, they are your brethren in faith; and we make the communications clear for a people who know.” and has nothing to do with eagles and vengeance and cleansing the lands of Allah. Which would be sort of out of keeping with the rest of the Koran anyway.