Month: April 2016

Demystifying University. It’s only a thing.

Higher education in America is expensive. It’s not even a little bit expensive, it can be incredibly expensive.

I felt it was time to take a moment to step away from Higher Education as what we’ve all come to know. Instead I propose we think of Higher Education in the abstract as a thing. Nothing more, nothing less.

Let’s look at this thing with economic eyes. What do we have.

The thing is good. Because it is good, people want to buy this thing. There is increased demand for it.

With increased demand comes an opportunity for the seller to charge more for this thing. Over time it becomes more and more expensive.

Before the demand for this thing went way up, people could buy it with cash. They would work and save up for it or their parents would pay for it. People didn’t borrow to pay for this thing because you didn’t need to borrow for it. But borrowing also wasn’t much of an option. People couldn’t borrow because they didn’t need to and people didn’t need to because they couldn’t really borrow.

People kept liking this thing and the price kept going up. As prices for other goods increased, it also cost more to provide this thing. Some people couldn’t afford this thing. In 1965, President Lyndon Johnson signed a bill into law saying “Hey! We need people to have access to this thing. Let’s start offering low interest loans to people who want to buy it.  It’s a good thing and they should have more money after buying it, so the Government guarantees that everyone will pay the Government back for this thing.”

With loans, more people could access the thing.  More people bought it and places kept selling it. No one really cared about how much it cost because buying this thing effectively came with a guarantee you’d have a better life. If you owned this thing, you’d make more money, have more success and damnit people would like you!

The trouble was the Government money to buy this thing was guaranteed to the sellers. With guaranteed payment, the sellers could charge whatever they wanted. They charged more and more and more and more and people kept buying it.

After 50 years, the price of this thing is out of control. And unlike the days of yesteryear, owning this thing no longer guarantees you the life it did 30 or 40 years ago. In fact, so many people own this thing, it doesn’t differentiate you at all from anyone else. It seems everyone owns this thing.

Sure, having this thing is still great for some. Maybe it turns out fine for many. But what about everyone else?

Do you think you should still buy this thing?

This thing is so expensive it could potentially ruin your life.

Once you buy it, you can’t return it.

If you can’t pay back what you borrowed to buy this thing, there’s not much you can do about it. It will follow you around until you die or become permanently disabled.

It’s time we buy this thing differently.

The cost of this thing needs to be important.

The color of this thing barely matters any more.

Yes, this thing is probably still great in the long run, but that doesn’t mean you should trade your future for it.

Be smart when you buy this thing.

  • Work more to save up to pay for it.
  • Talk with people about why you want this thing. They may give you money to help you buy it.
  • Buy half of the thing in your community, near home. Then you only have to pay for expensive parts when it matters.
  • Learn about yourself before you buy this thing. The last thing you want to do is buy the wrong one, because they won’t let you return it.

This thing is shiny and I know you want to buy it. But remember, there are no refunds. Think before you buy. It’s only a thing.

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March 2016 Net Worth

APRIL!!

I am so excited to report how fantastical March was.

First, I have officially been student loan free for 1 whole year! Happy Student Loan Free anniversary to me! Here are four things I’ve learned over the last year about living without student loans.

Second, I really want to go on vacation, specifically to Europe. Over March, I had two harsh reminders that my passport hasn’t been stamped in a while. I had an England Reunion early in the month and that always brings back travel feelings. Toward the end of the month, my baby sister spent 10 days in Italy. I offered to crash diet to fit into her suitcase and she didn’t even entertain the idea. HOW DARE SHE!?!? I need to plan something. Hubs and I are getting ancy. Do you have any travel destination ideas in flyover country?

Third, Hubs and I embarked on our journey into a new hobby: Hiking! March was a roller coaster of weather. Beautiful days, rainy days, snowy days:  things got muddy. Inspired by the mud, we decided it was finally time to level up to pro-level. We cashed in LL Bean gift cards and got fancy pants hiking shoes. Let the hiking begin!

[Flashback!]

March 2015:  Let me shout it again from the mountain top… I PAID OFF MY STUDENT LOANS! I also went to my first hockey game.

March 2014: My calendar is empty, with one beautiful exception. Apostle Island Ice Caves anyone?
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March 2016: The Markets are Back!

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Liabilities!

Something is suspiciously missing from here. Except its not suspicious! It’s been more than a year since I paid off my student loans.

Car Loan: $7,594 ($376)  Slow and steady progress with my 1% car loan.

Assets!

Retirement: $32,620(+3,472) A huge month! This is my first month where I could feel the wave of the markets. $1000 of this is pure market fluctuation in my IRA. Weeee! Also, I’m feeling incredibly responsible having more than $30k saved by the time I was 30! Saavvvvvvinnnngg!!

Taxable: $8,269 No change, but like the rest of the market, I’m sure its UP!

Auto Value: $12,369 (-150)  The depreciating asset keeps depreciating. 

House Fund: $26,140 (+2,054) Saving for the House keeps chugging along nicely. March was a roughly average saving month, but I passed 2 huge milestones! I officially have more than $25,000 saved AND I am officially in the final round of Round Two!

I have less than 100 days until Round Two is over. It is discouraging to face the largest loan last, but I will make the progress I make. I’m excited to see how far into the last loan I can get. Any predictions?

Round Two Progress: (What is Round Two? check here!)

  • Baby Saver: $2125 
  • Middle Saver: $7953 (Loan value: $5828) ✔
  • Thing 1: $16,453 (Loan value: $8500) 
  • Things 2: $24,953 (Loan value: $8500) 
  • Big Momma: $45,330 (Loan value: $20,377) >in progress<
    • $26,140 down, $19,190 to go!

HSA: $6,174 (+446)  More market growth! My chiropractor screwed up my billing from last October, so I received and paid a small bill to finish that off. I’m pretty pumped to see this over $6k, especially since I have been paying all my medical bills out of it. Growth is good. 

Car Fund: $501 (+50) I could buy tires! More likely, I’ll probably get the scheduled maintenance on my car. 

 

{Overall}

Net worth: $78,479. Up $6,248 from last month. 

A huge month!!! A lot of this due to the market ride and I am loving it. The best thing I can do at this point is keep throwing money in the market and let these swings get bigger and bigger and bigger.

It is pretty incredible to think that one year ago, my net worth was only $28,646. With the help of a lot of saving, and (finally) a little market magic, my net worth is up $50k in one year. I triple checked the numbers and I still can’t believe it. It’s been a great year financially. I’m excited to see what year 2 without student loans will bring.

How was your March?  Did you ride the glorious market wave this month?