June 28th, 2009
A recent trend that I have found very disturbing amongst my friends is heading to grad school in hopes of escaping this terrible economy. I am a big advocate of more education, but in most of their cases it is not even necessarily something that interests them, it is only to stay in school a little longer to escape dealing with the real world. I find the logic in that decision to be faulty at best, damaging at worst.
Taking on 5-figures worth of educational loan debt on the off chance that the economy will right itself by the time of graduation from grad school seems like a pretty poor bet. I know some friends that had been dreaming of law school or medical school throughout their entire college careers, and I do no begrudge them their choices to attend grad school in the slightest, because they are working towards goals they have long held dear. It is the friends that are attending school for subjects they do not necessarily even enjoy that I see as foolhardy. That is why I chose to move abroad and pursue my writing instead of law school, because I knew I was not passionate about it and did not want to acquire educational debt that would follow me around for the rest of my adult life.
To reiterate, I do not think that grad school is a bad decision! I just think that a lot more thought should be put into the decision-making process when looking at attending grad school. There are no longer guarantees that you will get hired when you graduate, and banking on that when acquiring such huge amounts of debt is something that should give people pause.
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June 17th, 2009
I often have friends ask me how I make ends meet while working as a freelance writer, especially living in a foreign country. The answer is tracking every single penny that I spend, and categorizing everything to find ways that I can eliminate extraneous spending in my monthly budget. For some this may sound like the peak of drudgery, but for me I view it almost like a chess game; I want to see my savings account increase at the end of each month, not decrease.
The key is not to view logging your transactions as drudgery. By doing a little bit of legwork by keeping track of your spending, you give yourself a powerful amount of information about what you are truly putting your money towards. If you do not know exactly how you are spending your money, how can you possibly figure out where you are overspending? I still remember when I first found out I was spending almost $75 a month on videogames; it was quite the wake-up call! The trade-off of a little bit of time for your entire monthly financial picture is in my mind more than worth it.
You can also view it as a trade-off between your time and emotional distress. When I see friends stressing out over how they are going to make ends meet from month to month, I try to nudge them in the direction of tracking their expenses, every time. Emotional distress is a hell of a lot more damaging then whipping out a small notebook each time you make a purchase! Only time will tell if people begin to adopt this strategy of budgeting, but if the news and blogs that I read are any indication, I think most people are ready for a change in how they handle their money.
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May 20th, 2009
As a recent college graduate (May of 2008), I am one of the casualties of this horrific economy that we are currently mired in. I graduated with few job prospects, but have since made work for myself as a freelance writer living in Buenos Aires, Argentina. And you know what? I could not be happier with the economic situation that arose, because I think it has given a huge wake-up call to everyone my age.
I worked very hard during college to ensure that I would graduate with no school loan debt, and I also made responsible use of credit cards to build my credit rating while at school. The financial mismanagement and general lack of financial literacy I saw while at my university was astounding! Giant plasma screens put on credit with no thought to how long it might take to pay the balance down, drinking binges in lieu of building an emergency fund, the list goes on and on. This down economy will certainly teach my generation about the value of frugality and differentiating between wants and needs, that is for certain.
I know I may come off as harsh for saying it, but I want to see people my age take responsibility for their own financial misdeeds. Yes, credit card companies may use some shady practices to nickel and dime consumers, but at what point does it become their own fault for putting everything on credit with no regard to paying down a balance? At what point do people take responsibility for buying a house with a mortgage that they could never dream of affording? I think that hitting the financial reset button, as this mortgage crisis effectively has, will lead to better financial literacy and spending practices in the long run. A tough lesson, but a necessary one.
(Guest Written By My Friend John!)
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