Changing Your Family Tree

I love to hear stories of people dealing with student loans and deciding to pay them off quickly. And I really love it when they go so far as to start saving for their own children’s college… even grandchildren’s college.

Roger wrote this on a LinkedIn article I published about student loans and how they are marketed as something every student has to have:

“I absolutely have a problem with it! As a student, I was fortunate to have both scholarships and a part-time job to help. I graduated, married, with #2 child on the way and three job offers to begin my career, AND NO DEBT. However, all of my five children incurred some debt to complete their college and I incurred too much debt to help them have less. Ouch! Living under the debtor is SLAVE to the lender truth, our family waged the war to get out of that debt.

I now encourage my children to save for college for my grandchildren and I am now saving some for the grandchildren to hopefully change our family tree to have our grandchildren graduate debt free. Any method that makes it EASIER to borrow and EASIER to not get paid back quickly is a disservice to the next generation.

As a taxpayer, YUCK, I want the government out of my life and my children and grandchildren’s life. I DON’T want them depending on government for anything, especially being in DEBT to them. The erroneous belief that someone else should pay for it, IE forgive the debt after 20 years, is no way to build up financial independence of our Professionals and Entrepreneurs of the future!”

You’ve got to love his spirit and determination.

Here’s my response to Roger’s comment:

“I agree Roger. You made the case perfectly. Nobody considers the implications of the government encouraging all this debt, and under the new Pay As You Earn plan, encouraging super low monthly payments and staying in debt for 20+ years. Staying in debt and teaching young people to spend more of their income kills their ability to save for their own children.

The government is teaching young people the opposite of financial intelligence. They are teaching financial illiteracy. They are teaching government dependence in the name of education.

It’s already hard enough to save money. Encouraging a person to stay in debt for 20+ years makes it next to impossible. This is one of the best reasons to go “gazelle intense” as Dave Ramsey says and sacrifice after school so a person gets the loans out of their life.

“Education” and the word “debt” don’t really go together. If a person does mix them, they are wise to get rid of the debt quickly. That way their educations can be used to build a better life for themselves and their family. That way they can become strong financially.

I have a huge amount of respect for the approach you are taking Roger. You rock!”

Great story that I hope you will consider making a part of how you deal with, and payoff, your student loans. Family trees are changed one person at a time.

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Ken Paid a Price to Become Free From His Student Loans

I love reading stories about people who paid a price to become free from their student loans. Ken Ilgunas is a guy who went to great lengths to pay his student loans off quickly. I love it.

Here is a quote from the beginning of the article:

“By the time Ken Ilgunas was wrapping up his last year of undergraduate studies at the University of Buffalo in 2005, he had no idea what kind of debt hole he’d dug himself into.

He had majored in the least marketable fields of study possible — English and History — and had zero job prospects after getting turned down for no fewer than 25 paid internships.

“That was a wake-up call,” he told Business Insider. “I had this huge $32,000 student debt and at the time I was pushing carts at Home Depot, making $8 an hour. I was just getting kind of frantic.”

Wait until you see what he did next!

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Take a Look at the Big Picture

This post is for you if you own or manage a business (or plan to some day).

Over the years, I have learned that it’s wise a couple times each year to step back from your day-to-day role in your business and look at things in a more big-picture, strategic kind of way.

I wrote an article for the Business Bank of Texas recently where I set out 8 great ideas for you to consider as you take that bigger picture look at your business. Here are the 8 topics.

  1. Stop doing things that lose money.
  2. Learn what’s really going on with your cash flow each month.
  3. Pick an important business process to simplify.
  4. Create monthly cash flow projections for the next six months.
  5. Use your monthly financial reporting process in a more strategic way.
  6. Decide that accurate monthly financial statements are better than inaccurate ones.
  7. Create a written capital expenditures plan.
  8. Put yourself in the shoes of an investor or lender.

I know it’s difficult to think strategically and big-picture when you are down in the weeds of your day-to-day work. But it provides you a golden opportunity to rise above the daily challenges and open the door to some exciting new improvements that only need one thing to become reality… your decision to make it happen.

I go into more detail on each of the 8 topics here.

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Buying Your Next Car With Cash – Part 2

Is borrowing money to buy a car smart or is it something you do only when you “have no other choice”? Everyone looks at buying cars, and having a car note, a little different.

For me, the first time I wrote a check to buy a car was an incredibly cool feeling (although there is definitely some pain that goes with writing a big check like that). :-) It was a very important turning point for me on my path toward financial independence. I write about that moment in my post Buying Your Next Car with Cash.

That post created a number of different comments in several LinkedIn forums. (Click here to connect with me on LinkedIn).

Lisa asked this question:

“Aren’t car loans pretty cheap? I’d rather keep my liquidity.”

Her response is a very common one. It is basically saying that if I can get a low interest rate then why shouldn’t I keep my cash and use the “cheap” money.

Here is the response I provided to her question:

 “Great question Lisa. Here are my thoughts on that question.

  1. I agree with having liquidity. I like the Dave Ramsey approach of always having at least 3 to 6 months of cash on hand.
  2. If buying a car with cash would drive a person’s cash to zero, my assumption is they are probably spending too much on the car because they don’t have enough money.
  3. Buying the car with debt means you pay the purchase price plus interest. Buying with cash means you just pay the purchase price. The second option is the one that is the cheapest. And you don’t have any monthly payments.
  4. I’m a debt free kind of guy.
  5. Most people end up buying more car when they don’t have to feel the pain at the time of the purchase. You get the benefit (the nice car) and the pain (parting with the cash) happens over time and in small amounts. This is a big killer of a person’s net worth over time for many people.
  6. “Cheap” financing can usually be converted into some other form of benefit from the dealer.
  7. I don’t subscribe to the view that it is wise to borrow money and invest it as the path to creating wealth.
  8. In general, I think a commitment to saving money in order to buy things pays huge dividends for a person throughout their lifetime.
  9. I am also a pay the house off fast kind of guy.
  10. I believe in the Dave Ramsey view that personal finance is 80% “personal” and only 20% “finance”. Trying to play low rates is the 20% part of personal finance. Making smart decisions and saving for purchases is the 80%.

I recognize most people view things a little different than I do. That’s OK.

I like my personal balance sheet to be heavy on assets (especially income producing assets) and zero debt. Thank you for joining in the discussion.”

Maybe the next car you buy should be paid for with cash. Give it some serious thought.

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Buying Your Next Car with Cash

I bought my first car with cash back in 1999. I can’t tell you how proud I was to finally buy a car without borrowing the money to do it. (And I still have that car today. It just crossed the 240,000 mile mark!)

Here are two important questions to ask yourself.

Do you think it is possible to own a car without having a car note?

Have you set a goal to buy your next car with cash?

Your answers to those two questions can have a big impact on your financial future. Not so much because of the dollars involved. But more because of the impact it can have on your whole approach to money, debt and mature decision making.

Saving money and buying a car with that money is smart. It turns the table to saving money before the purchase rather than paying for it for years after the purchase. It breaks the cycle of always having a car note in your life.

It reinforces the principle that it is unwise to buy things you can’t afford. (And having to borrow money to buy a car is a sign that you really can’t afford that car.)

Resolving to buy your next car by writing a check for it will change your life! And you will be so proud of yourself for doing it.

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A High Five to a Smart Waiter

 

Question for you. Would it be wise to graduate from college then aggressively attack your student loans so they are paid off in 3 years or less? Does the sound of that excite you?

Or does it sound like complete pain and suffering (or even unwise)?

I met a waiter last week who put a big smile on my face when he said he was choosing to “get the student loans gone” approach. He was about to graduate and he had his plan all mapped out.

I didn’t get a chance to ask him how he came to his decision. Most young people have bought into the myth that dragging your student loans out over 10+ years is smart. For some reason, this guy was making a decision against the norm.

I gave him a high five on his decision and his plan (and a big smile). :-)

And I encourage you to consider the wisdom of getting your student loans paid off as quickly as possible. You will love the feeling!

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Student Loan Forgiveness Even if You Make $5,000,000

Do think a borrower could have a household income of $5,000,000, quit work to be a stay-at-home parent, receive a $500,000 inheritance, and still have all their student loans forgiven by the government?

It might sound strange and counterintuitive, but the answer is Yes.

The new Pay As You Earn plan from the federal government not only makes it possible, it makes it highly likely that this scenario will happen. This new approach to student loan repayment became effective December 21, 2012. And boy does it change the nature of student loans. As I’ll show you in this example, the new plan redefines student loans in a dramatic way.

Let me show you how Pay As You Earn works. This example shows how a person can borrow $50,000 on student loans from the federal government, have a household income over the 20 year repayment of over $5,000,000, and receive $89,000 of student loan forgiveness.

Let’s base our example on a “typical student” example at President Obama’s web site barackobama.com/education-calculator.

The graphic shows that the new Pay As You Earn plan makes it possible for your Child to go to college. It even “saves” her money along the way based on her monthly payment in year one. Of course, the plan requires payments over 20 years and promises forgiveness of any student loans that remain after that 20 year period.

So let’s fast forward her life and see how much debt might be forgiven. We’ll refer to her as Cindy. (I am using the fantastic calculator tool created by The New America Foundation to run the example. You can download the spreadsheet here.)

Cindy gets her undergraduate and graduate degrees and lands a job making $45,000 a year. Her student loans are $50,000. She qualifies for the Pay As You Earn program because she has a “partial financial hardship” (her monthly payment under Pay As You Earn is less than under the 10 year repayment plan).

She gets an apartment and starts her new life. She begins making her $235 monthly student loan payment and provides her tax return each year so her loan servicer can calculate what her monthly payment needs to be based on her income.

Over the first three years she gets a raise of 4% per year. Her monthly payment in year two goes up to $247. In year three the monthly payment goes up to $259.

Here are the numbers for the combined three year period after graduation:

Household income                          $140,472

Monthly payment                           $259

Total payments made                    $8,893

Student loan balance                     $51,419

Estimated debt forgiveness        $20,610

 

Love Comes Calling

Another thing happened during those first three years after graduation: Cindy started dating a great guy. They fell in love and at the end of her fifth year out of school they got married. He has a great income ($250,000 a year) so they decided to file their tax returns as married filing separately otherwise the Pay As You Earn plan would calculate her monthly payment using his income as well as hers (it would use their household income if they filed jointly). The rules of the plan allow this. They aren’t gaming the system. (Remember, this is the pay as “you” earn plan, not the pay as “your spouse” earns plan.)

Things continue to go well at her job and she continued to get the 4% pay increase each year. In year eight, they welcome their first child into the world. They have their second baby in year ten and Cindy and her husband make an exciting decision. Cindy has always wanted to be a stay-at-home mom. They decide now’s the time for her to quit working and stay home with their two toddlers.

Pay As You Earn will set her monthly payment to zero since she will not be earning any money. Their household income is more than enough for them to live well and raise their young family. The assumption is Cindy’s husband is able to increase his income at 4% a year (from the $250,000 he was making when they got married).

Here are the numbers for the combined ten year period after graduation:

Household income                          $1,830,306 (of which $476,226 is what Cindy made)

Monthly payment                           $0

Total payments made                    $29,499

Student loan balance                     $54,876

Estimated debt forgiveness        $89,251

Ten years into the student loan repayment and the loan balance has actually risen from when Cindy graduated. The total payments she has made of $29,449 have not paid all the interest that became due on the loans.

Over the next five years, Cindy continues to stay at home with the kids. It provides a quality of life that her family enjoys and values. Her husband continues to grow in his career and they solidify themselves in their community and their status in the middle class.

Here are the numbers for the combined fifteen year period after graduation:

Household income                          $3,477,753 (of which $476,226 is what Cindy made)

Monthly payment                           $0

Total payments made                    $29,499

Student loan balance                     $72,064

Estimated debt forgiveness        $89,251

Cindy’s monthly payment went to zero back in year 10 when she quit working. If you don’t “earn” the plan does not require you to “pay”. And since you can file married filing separately on your federal tax return, your household income is not considered. That’s how the plan works. She is not doing anything wrong as far as the Pay As You Earn plan is concerned.

Her student loan balance is going up every month because there are no payments being made. All the interest that will accrue on the loan will be part of the debt forgiveness.

Cindy and her husband have talked about whether it would be smart to just pay off the student loans. If they did, the original college cost of $50,000 would have cost them $101,563 (the $29,499 paid plus the balance owed of $72,064). And right now the Pay As You Earn plan will forgive the entire balance five years from now. They struggled with what to do. The balance has been going up for so long that it doesn’t make sense to pay it off now. And one of the purposes of the plan was to make forgiveness possible.  They decide to ride it out.

A $500,000 Inheritance

Cindy’s father passes away in year sixteen and leaves her an inheritance of $500,000. They put it in savings since they have already concluded that it doesn’t make financial sense to pay the debt off when it is about to be forgiven by the government. They have a net worth now of just under $2,000,000.

They continue to live their life and Cindy home schools the children. They hit the 20 year mark in the Pay As You Earn program.

Here are the numbers for the 20 years in the Pay As You Earn plan:

Household income                          $5,482,123 (of which $476,226 is what Cindy made)

Monthly payment                           $0

Total payments made                    $29,499

Student loan balance                     $0

Actual debt forgiveness                 $89,251

 

Is the New Pay As You Earn Plan Wise or Foolish?

People will have lots of reactions to this example.

Some will be shocked to learn the government will be forgiving student loans to rich people. Some will accuse people like Cindy and her husband of taking advantage of the system. Some will be pissed off that the government is putting the burden of student loans on taxpayers rather than the people who borrowed the money. Others will be excited to get into the Pay As You Earn plan.

The fascinating thing about this example is despite the appearance of helping those who do not need financial assistance; the government actually achieved the two primary objectives that led to the creation of this plan in the first place.

The first objective of the plan was to make it easier for a person to spend more of their income in the economy. This program was born during the time bailouts and stimulus money was being poured into the economy in a desperate attempt to boost economic growth and reduce unemployment. That’s why the monthly payment is set at 10% of discretionary income. It frees up cash for a person to spend more of their money to boost the economy.

The second objective was to make sure that money is not a barrier to your child going to college. The graphic on President Obama’s web site during his re-election campaign shows clearly that the government wants a parent and their child to say yes to college.

The repayment plan was created to serve those two objectives. Cindy and her husband were not gaming the system. They were just following the rules setup by the government to achieve its two objectives. She went to college and she paid a portion of her income to the government for 20 years. That’s exactly what the new plan calls for.

Pay As You Earn – The Name Says It All

The name of the plan does a great job describing how it works. It also provides a hint at where student loans are headed in the future. I’ll talk more about that in just a minute.

Let’s look at the key parts of the plan that make the forgiveness possible for Cindy.

  • You “pay” on your student loans “as you earn” money. You don’t pay based on how much money you borrowed (the way every other form of debt works). So if you don’t earn, you don’t pay. That’s why Cindy was able to quit work. Her monthly payments under the program went to zero. She could stay current on the debt even without working because the plan called for zero payments based on her zero income.

 

  • The plan is set up to look at the money “you” earn. Once you marry, the plan allows you to file as married filing separately. That way the government will only consider your income, not your spouse’s. It’s not the “pay as your spouse earns” plan. That’s why the $5,000,000 or so of income earned by Cindy’s husband after they married was not considered in setting her monthly payment.

 

  • The debt balance grew during the entire 20 year repayment period. That’s because her monthly payment while she was working was less than the interest that accrued on her debt balance. This is the part of Pay As You Earn that many people don’t see or understand. The super low monthly payment was using the Buzz Lightyear approach to loan amortization “to infinity… and beyond”. The unpaid interest each month causes the total debt to rise each month. As the balance grows, the borrower becomes more and more dependent on the promise of forgiveness. They are basically digging themselves a deeper and deeper hole based on the government “saving them money” with the super low monthly payment. It also steers a person away from paying off the debt early because their plan all along was to accept the gift of forgiveness the government promised.

It’s this last point that provides a glimpse into the future of student loans.

Think about this for a minute. If it doesn’t matter how much you borrow, your monthly payment is based solely on your income and not on your debt, and any remaining balance after 20 years is forgiven – why even call the loans debt? Why even call them loans? Why keep track of a “student loan” balance at all? It only serves to complicate the whole process when you think about it.

If the $50,000 the government paid for Cindy to go to college was never called a loan, nothing would be any different financially. There would just be no need to track the debt or label anything as “debt forgiveness”. It’s an unnecessary administrative burden based on how the plan works.

And it’s that point that makes it possible to look into the college attendance crystal ball. The next step after Pay As You Earn is an interesting one to consider.

I’ll share my view on the future of student loans in upcoming posts.

 

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Is a small student loan payment wise or foolish?

The new Pay As You Earn program will lower monthly student loan payments big time. And the government is selling that concept as a way to make student loans more affordable.

I talked about the new Pay As You Earn in my post The new Pay As You Earn student loan repayment program – A blessing or a curse? Part 1.

PAYE is a big change being introduced by the government to lower monthly payments for new student loan borrowers. It also promises forgiveness of the debt after 20 years if the low monthly payments do not fully pay off the loan.

Here’s the important question to ask yourself. “Is a low monthly payment on a student loan smart?

Let’s look at a quick example from my email inbox this morning.

I got an email from my credit card provider that reminded me my payment is due next week. It said my balance was $6,050.33. It also said my payment due was only $61.00. Should I pay the full amount due or pay the low monthly payment on the balance?

The answer is I should (and I will) pay the entire balance next week. I’ll pay it off in full. (That’s what I do every month.) Thanks but no thanks on the offer to pay $61.00. That would just keep me in debt and cost me more money over time – not less.

(As a side note, I use the card a good bit for business related travel which is why the balance this month is high. Although I did buy some furniture last month too – ouch!)

The Government Says Lower Monthly Payments Save You Money

If you go to barackobama.com/education-calculator you will find a page that advertises the new Pay As You Earn program. The page was put up during the 2012 presidential election campaign (and was still up as I wrote this).

As I have mentioned before, I am not picking on President Obama or Democrats or Republicans. They all say very similar things when it comes to student loans in general. My focus is on the facts and the reality of student loans, not on what any political party has to say about them.

The page has a pretty slick online calculator so you can plug in your expected income, your expected student debt after college, your family size and it shows you your “savings” under the new PAYE plan.

I plugged in an example to see what it showed.

On the left side of the calculator I plugged in a $30,000 annual income. I plugged in $25,000 of student debt (a little below the average). And I plugged in a family size of one.

On the right it tells me the good news. My monthly “Payment under Obama” is only $110 per month rather than the $288 under the standard 10-year repayment plan. My “Annual Savings” is $2,128.

So the government is saying that lower monthly payments are smart. They saved me money.

Using that logic, in my credit card bill due this month, if I only pay the $61 minimum payment I would save $5,989.33.

Low Monthly Payments Keep You in Debt

Common sense says that the lower the monthly payment you make on an outstanding debt the longer you stay in debt. And the more interest you pay over time. That’s not saving money, that’s pissing money away.

Be careful when a lender tries to entice you into staying in debt by making low monthly payments.

And the government is the lender when it comes to student loans (over 90% of all student loans now are made by the federal government).

This isn’t about Democrats or Republicans.

It’s about making wise decisions with your money.

 

WOW, resort style living on campus: Poolside cabanas, tanning beds, yoga studies and more

Holy cow! College living now includes luxury amenities like studying in the sauna by the pool, Zen gardens, resort-style pools with private cabanas, putting greens, custom designed furniture, yoga studios, private shuttle service to classes (and on the weekend to the night life hot spots), tanning beds and more.

The cost of college tuition is skyrocketing in America. And it looks from this article at the Wall Street Journal, Resort Living Comes to Campus, so is the cost of living while attending college. (The image above is from The Wall Street Journal article.)

“Both students and administrators say housing has become a big factor in college selection, increasingly trumping degree programs or beloved sports teams. Mark Sampson says his daughter took “about two looks at the campus” of University of Florida in Gainesville and declared it too old. She picked University of Central Florida and hopes to move into University House this fall.

… On campus, “you never got your privacy,” says Nicole Ibinarriaga, a 20-year-old junior whose parents pay her $690 monthly rent, which includes parking, at the University House, where she lives in a three bedroom, three-bathroom unit with two other women. “Now, I can take a five-hour shower and not worry about it, or take a bubble bath.”

The article is fantastic. You should check it out as part of your plan for getting ready for your children’s college education.

It highlights some interesting developments in the higher education world. More and more kids are going to college. The government is providing students (and parents) funding in the form of huge student loans. Schools are chasing students by building nicer facilities. Private companies are jumping in with facilities to cater to all the money being thrown at college education these days.

And it shows the insanity is not likely to end anytime soon.

“At the Lodges of East Lansing near Michigan State University, the pool is heated year-round, and there’s an ice-skating rink just for students. During the week, a private shuttle bus takes students to class. On the weekends, they’re driven to and from night-life hot spots.

At the Cottages of College Station near the Texas A&M University campus in College Station, Texas, the two-story clubhouse’s wood-shingle exterior resembles a tony Hamptons mansion. “Most of these kids are going to have a step down in lifestyle when they have to enter the working-world environment after they graduate,” says John E. Vawter, principal of Capstone Collegiate Communities, which developed the Lodges and the Cottages.”

Student loans already make it super-easy for a student to live well above their means while they go to school. That’s one reason a student is so surprised how hard it is to start paying their student loans back quickly when they get out of school. This new twist in making a student’s life more enjoyable will only add to the difficulty.

No wonder kids come out of school with a feeling of being disadvantaged. They have tons of student debt they are dragging around when they enter the work force. And they have to actually crank their lifestyle down after school to adapt to the reality of the working world. That’s a very different world than the one they were “promised” when they headed off to school and signed up for all those student loans.

“This off-campus building boom is forcing schools to up their game, though slashed budgets have left minimal funds to erect new residence halls. With just a few hundred beds on campus, the University of Central Florida was long known as a commuter college. When John Hitt became president in 1992, he vowed to change that. Since then, the bed count has increased to about 11,300, with about 700 more under construction. All these beds will be one per room, though some students will have to share bathrooms.

“They don’t have to be the super-sexiest facilities you’ve ever seen, but there’s a competitive market out there,” he said. “The schools that have the more modern arrangements, I think that makes a difference.”

College tuition since 1978 has risen twice as fast as the cost of everything else in our economy. It’s much faster than even medical care, which we all know gets more and more expensive every year.

Colleges have to compete for students now more than ever. And since they have few incentives not to add to their cost structure, they build more and nicer facilities to try to win the battle for students.

Maybe it’s just the accountant and CPA in me, but I can’t see the logic of building ultra-nice, almost elegant school facilities when the rising cost of a college education is such a visible problem.

It’s hard not to conclude the obvious – schools don’t really care that much about controlling the cost of college. Maybe part of the problem is the government is making more money available, in the form of student and Parent PLUS loans, to more and more students and parents so the higher costs become a moot point. And real estate developers are jumping in the game. They want some of that money too.

This is one reason Parent PLUS loans are becoming more popular to schools. They can make up the gap created as the schools continue to increase their costs each year well above the normal cost of living increases in the overall economy.

Here is a list from the Wall Street Journal article of the amenities at several of the college towns they wrote about.

WOW!

Michigan State University Among the amenities at the Lodges of East Lansing:

  • Indoor/outdoor fireplaces
  • Coffee house
  • Cybercafe
  • Dog park
  • Ice-skating rink
  • Outdoor grills
  • Gym, pool and sauna
  • Tanning bed
  • Private shuttle

University of Central Florida At University House, amenities include:

  • Tanning rooms
  • Putting green
  • Barbecue grills
  • Pool with cabanas and club house
  • Gaming room with multiple flatscreen TVs
  • Internet bar with PC and Mac stations

Texas A&M At the Cottages of College Station, amenities include:

  • Tennis and sand-volleyball courts
  • Pet-washing station
  • Tanning beds
  • Horseshoe and cornhole pit
  • Walking and fitness trail
  • Poolside jumbo screen
  • Fitness center with yoga studio

Arizona State University When it opens next year, the District on Apache will have:

  • Outdoor movie screen
  • 300-foot-long lazy river
  • Steam room
  • Golf simulator
  • Outdoor kitchen

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Student debt and the dangers of herd mentality

The herd mentality is alive and well in the world of student debt. And it’s driving poor decision making when it comes to getting a college education for your children.

Here is a quote from an article recently titled College Students Gird for the ‘Student Loan Debt Bomb’ in Their Futures.

“Of course, you can always postpone the day of reckoning by staying in school, which delays the payment dates for the loans.

That is what Anna Callaghan, 22, who has $20,000 in undergraduate debt from Santa Clara University, is doing. Now entering a master’s degree program at NYU, the new East Village resident expects to amass another $50,000 in her three-semester program in international relations and journalism. “You’d think it would scare you to death, but it doesn’t,” said Callaghan. “Everyone has loans. The fact that everyone has them makes them seem more normal.” Her parents, she said, “take it a lot more seriously than I do.”

The loans won’t seem quite real, said Callaghan, until she graduates, gets a job and is made to realize “how much of my salary is going toward them.”

Holy cow!! That’s how whacky this whole student loan fiasco has become.

My point in sharing this quote with you is not to pick on this young woman.

I just want you as a parent to see what you are up against when it comes to how your children might think about student loans.

That’s why it is so important to teach your children (as they are growing up) about money and debt.

You don’t want your children to think about money and student debt in such a careless and harmful way.

It could cripple them financially for life.

You have a wonderful opportunity to help them start their young life off on a strong footing. Please jump on that opportunity very early in their life. You will be giving them a gift that will last a lifetime. :)