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The Best Way to Get Rid of Debt as a Student

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What debt can do to your life.

During the first week of optometry school, in between classes we had a parade of administrators coming in and out giving various pieces of information.  We were briefed on how to read our class and clinical schedules, studying tips and the various clubs that were available.  A guy from the financial aid department also came in and talked about some housekeeping stuff when it came to our loans.  Before he began his talk, he put a slide up that said the following:

Live like no one else will today, so you can live like no one else can tomorrow.

I’m pretty sure only half the people in the class were even listening to the guy since we were all worried about the next test, but the half that saw the slide thought it was good but mostly kind of cheesy.  He didn’t really go into much detail about the saying, but maybe he should have.  Because that little slide gives you everything you need to know about debt: avoid it in the first place

Debt can Destroy

I’ve written about accumulating debt and the best way to pay off your student loans.  It can become a long and protracted battle that can take decades to win.  And there lots of casualties along the way.  People put off getting married, buying a house and starting businesses because of debt.  People also get divorced, lose their homes and have to shut down their businesses because of debt.  It can destroy dreams and prevent them from happening in the first place.

What that slide tells me is that avoiding debt means going against the grain of society’s expectations.  It is pretty normal for college students to go to bars, eat out a lot, spend spring break in the Caribbean and spend summer break in Europe.  These are common stereotypes and no one would bat an eye hearing a college student do these things.  But these stereotypes are also very expensive and can destroy dreams.

Going to a restaurant for dinner and drinks is a fun and normal thing to do, but if you pay for it with a credit card and are not able to pay the bill in full and on time, that dinner has just damaged your future.  If you got a little more student loan money than you needed, spending it on a vacation to the Bahamas will make the banks very, very happy since you will be paying them interest for a long time.  Just like investing early on in life will put time on your side and let you get some big returns, accumulating debt early in life will get time working against you.

Live like no one else will

We are constantly at the mercy of marketers, and marketers are very smart people.  They want us to give them our money and they want it now.  Being in debt is normal in today’s day and age, so it takes some willpower to be debt free.  An effective way to do this is to first see how much you’re spending and what you’re spending it on.  This can be as simple as recording it on the notes app of your phone or using a sophisticated website like Mint to automate it.  Look at all of your non essential spending and aim to cut it in half next month.  Take the other half and invest it or just park it in a savings account.  This can get money working for you instead of against you.

Once you start living how no one else chooses to as a student, you will be accustomed to saving money.  It will become like breathing.  Once you get out of school and start making the big bucks, you will have more money than you’ll know what to do with.

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Diamonds in the Rough Roundup 2/20/15

Greetings.  So even though I have been blogging for over a year now, I never really settled on a posting schedule.  For a while I tried to do 3 times a week, then 2, then back to 3.  With my responsibilities working as an eye doctor, at home as a dad and husband and doing freelance writing on the side, I’ve decided on posting once a week with a roundup post thrown in the mix.  It’s all about balance and I think this will give me the ability to write a quality post once a week while keeping sane!

Here are some insanely good articles I came across this week:

-Alternative Ways to Save for College by Budget Blonde:  I recently wrote about why i choose to invest in a 529 plan, but Cat has some other good suggestions. Some people advocate not saving anything for college but just to focus on retirement.  Everybody is different but I feel saving something for college gives the kids a nice head start.

-My name is Jeremy and This is How I Retired in My 30’s by Budgets Are Sexy:  An inspiring guest post from Jeremy who was able to “retire” with his wife while in their 30’s.  Shows how far a great savings rate can take you.

-Why You Should Save for Your Child’s Education…And Why You Shouldn’t by Wealth Gospel:  Nice post giving some pros and cons of contributing to your child’s college education.  I’m firmly on the pro side but there is no one right answer on this issue.

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