When I look back at my time in optometry school (it’s already been almost 5 years??!!), it seems like it went by in a blur. Those 4 years seem to kind of blend together in a whirlwind of studying, lab practicals, and board exams. Sometimes I am still utterly grateful I got through all of that. But thinking back to my mindset when I was actually in school, it seemed like it was taking forever! Four years of this stuff? It felt like an eternity at first. Many of my fellow students felt this way also.
What does this reminiscing have to do with drowning in debt? A lot actually. When the end was finally approaching, many people were understandably very relieved, and started thinking about their life after school. We could finally call ourselves eye doctors, and that should come with all the trappings am I right? Should I get a Lexus or a Benz to drive to work? I can’t wait to move into that swanky apartment downtown and get the best furniture available! The problem with a lot of these “trappings” is that most people will have to incur a lot of debt to get them. Did I also mention that many optometry students graduate with upwards of $200,000 in student loan debt?
A lot of freshly graduated students quickly get themselves into the unholy tri-fecta of debt: car loans, mortgages and credit card debt. Each one of these is a sucker punch right to the gut. Add this to the already burgeoning student loan debt, and you’re likely to be knocked right out. Just because you can “afford” the monthly payment, it does not mean that you should get that shiny new BMW right out of the gate.
Hopefully, right out of school is the point when you will be making the LEAST amount of money in your career. Advancing in your company or growing a successful business will increase your income with time. So there is definitely no need to rush out and get the new car and house right away. Banks will most likely be here until the end of time whenever we want to borrow money. If you are in significant student loan or credit card debt right out of school, it would be best to eliminate that first or at least whittle it down to a manageable level until you take on any new debt.
Waiting just a few years to take on new debt will put two things in your favor. One, your income SHOULD be increasing, so your debt to income ratio should be looking better and better. You might even be able to save up some of your income to make a good down payment on that house. townhouse you’ve been eyeing. Two, if your income is increasing, you should also be increasing your debt payments. This will get rid of your debt much faster than just making minimum payments, which the banks would absolutely love for you to do.
Another reason to consider just saying no to new debt right out of school is that buying a car or a house is a really big decision and a really big investment. It’s not a decision to be taken lightly and requires your due diligence all the way through. Your education was also a big investment which I’m sure you thought about thoroughly. It usually takes a few years for people to decide what they want to pursue after undergrad. So you should also take your time to really evaluate your needs and make the best choice possible when making yet another big investment. Buyer’s remorse is very real, and it can suck.
For those people who are reading this while still in grad school, it may feel like it’s taking forever now, but it will be like a blur when it’s all over. Take your time to decide when taking on new debt, since many new grads will be paying back lots of student loan debt at the same time. There is nothing wrong with driving your old Corolla a few more years while you hack away at your current debt.
It’s not easy to fight the lure of lifestyle inflation. When I graduated and got my first “professional” job I thought I would buy a Lexus too! Luckily, I realized this wouldn’t be a smart move and I just didn’t want to spend that much on a new car. I think trying to stick to the lifestyle that you had while you were in school is a good idea in the first couple of years after school while you work to pay off debt.
Totally agree. While you shouldn’t have to live as a student forever if you don’t want to, it just makes sense to the first few years anyway. Thanks for the comment Kay.
I’m now 6 years out of school and have never purchased or leased a car nor can I imagine taking on a mortgage. Maybe I’m slow 😉
Haha. No, I would say you’re just plain smart.
I agree with you. Once you reach a certain point with debt, you say to yourself no more adding new debt. ITs counter productive to the goal of freedom.
Adding more debt on top of current debt is never a smart move. But unfortunately people can succumb to societal pressures to get the latest car or house. Thanks a lot for the comment.