Trying to keep my big MM mouth shut!

lifeonthehill · January 2014

I have two facebook friends who just got new cars! One who got approved for $33,000 for a loan and is now paying for 6 years on her $32,000 dollar car! The other got approved for $24,000 over six years and only spent $20,000. I see all these pictures of their "new babies" and I just feel nauseous. I know we are 22 now and adults but where are the parents who should be telling these kids how bad of a choice this is!
All these happy facebook comments people are posting on these pictures make me want to post "good luck paying that off. What is your interest rate? Do you know how much it will actually cost after interest? What about the fact that it wont be worth much in six years when you do finally pay it off? Could you afford it if you lost your job?" UGH! Trying to keep my trap shut.

emily1004 · January 2014

I know how you feel, but you just have to bite your tongue. I always roll my eyes when I hear about a friend buying a home without 20% down, or those that took out hundreds of thousands of dollars in student loans, then they go out and buy the latest iPhone or a new car. It is sad because some people will never learn and most of our friends are in their 30's.

lifeonthehill · January 2014

emily1004 said:

It is sad because some people will never learn and most of our friends are in their 30's.

Ugh. I swear these two have gotten less responsible with age. Not to mention they really havent even hit home owner age yet. Hopefull they will learn their lessons now.

mbecker03 · January 2014

We have friends who seem to get a new car every 6 months. It's frustrating to watch since I know they're just flushing money down the toilet and they don't really have any idea.

CuriousKiddosMama · January 2014

I know exactly how you feel. I have a friend who just bought a new car, and got all the bells and whistles because, 'well I was approved for the loan'. Seriously? Do you know what you will be paying for that?!?!? And then she chose the option to finance it over 6 years, because that made the payment closer to what she wanted to pay. Wow! Just wow! I don't know why some people just don't get it about car payments. I know it's better just to not say anything, so vent away on here!

hoffse · January 2014

Oh man I see this all the time in my profession. H and I had a looong convo about this last night, actually. It's surprisingly hard to find people our age in our jobs who are as cheap as we are. Luckily I have one coworker who is pretty MM, and he and I have become pretty good friends over that one thing.

H and I seriously get pressured to spend spend spend and people don't understand it when we choose not to. It's remarkably annoying.

But yeah. I can literally think of 8 people I ran around with in law school who bought BMWs as soon as they graduated with their signing bonuses. I wanted to be like, "Dude. That's for the bar exam. And living expenses over the summer since you won't be employed for another 3 months." In fact, with my signing bonus I managed to stretch it to cover those expenses. And I started my job with literally $11 in my bank account that was left from that bonus. I didn't have to borrow additional money to cover it. But no... signing bonus=BMW for a lot of people I know. And then the best part was all the facebook posts bemoaning their student loans when those went into repayment the following November. Oh yeah. Those.

You can totally vent here.

brij2006 · January 2014

Flame Free Confession (FFC): I was one of those. Made $30k right out of college, and bought a $20k car with a 6 year loan. I could afford the payment, and the interest rate was at 3% (which was good in 2008). On top of my $50k in student loans. At the same time H (he was BF then) bought our house with $0 down. And to think I was "good" with money. HAH!

All you can do is tell them congrats and move on. They aren't going to understand it until they want to know it.

lifeonthehill · January 2014

I am glad I can vent here! Haha.

I am so glad I found this board so early on in my life. We were pretty determined on the SL pay off because we were hoping to be comfortable trying for kids one year into marriage(no TTC in July). But I think H and I would have trailed off onto a bad path if I didn't find this board and Dave Ramsey. We have gotten to a point where we would rather not spend the extra $25 on something knowing we could save it instead and it is an incredible feeling.

hoffse · January 2014

alyssa32713 said:

I am glad I can vent here! Haha.

I am so glad I found this board so early on in my life. We were pretty determined on the SL pay off because we were hoping to be comfortable trying for kids one year into marriage(no TTC in July). But I think H and I would have trailed off onto a bad path if I didn't find this board and Dave Ramsey. We have gotten to a point where we would rather not spend the extra $25 on something knowing we could save it instead and it is an incredible feeling.

I think that's the key right there. Getting to where saving you money gives you more pleasure than spending it means you will continue to live within your means. And you might end up with more money than you ever thought was possible.

Ducktale · January 2014

I am so glad there are people out there who buy new cars all the time, so that I can buy their perfectly fine cars after they've depreciated the hell out of them.

lifeonthehill · January 2014

Ducktale said:

I am so glad there are people out there who buy new cars all the time, so that I can buy their perfectly fine cars after they've depreciated the hell out of them.

Amen to this.

vlagrl29 · January 2014

I did have to finance a car for 6 years but it was 0% financing and was $15k, but I got my money's worth.

Xstatic3333 · January 2014

brij2006 said:
Flame Free Confession (FFC): I was one of those. Made $30k right out of college, and bought a $20k car with a 6 year loan. I could afford the payment, and the interest rate was at 3% (which was good in 2008). On top of my $50k in student loans. At the same time H (he was BF then) bought our house with $0 down. And to think I was "good" with money. HAH!
All you can do is tell them congrats and move on. They aren't going to understand it until they want to know it.

Me too. I never did the big car loan, but I financed my lifestyle on CCs age 22-24. Then the payments got too big, and I freaked out and straightened up.

What scared me a lot was the blatant abuse of student loans going on in my grad program. My school would generally offer everyone 25,000 a year in PLUS loans above what was needed for tuition. My program isn't like law school where you don't have time to work-you do, and working in the field is essential for your future job prospects. Well, a lot of people took the full amount every semester. One girl took out a school loan to pay for her wedding :-/ I know several people who ended up borrowing at least 100,000 even though starting salaries in my field are 30,000-50,000. There's even an option to finish in three semesters that myself and lots of other frugal types took, but not these top borrowers.

Very glad I found this board to keep me on track! A lot of you here are great examples, and the rest of us can improve together

hoffse · January 2014

Flame Free Confession (FFC): I was one of those. Made $30k right out of college, and bought a $20k car with a 6 year loan. I could afford the payment, and the interest rate was at 3% (which was good in 2008). On top of my $50k in student loans. At the same time H (he was BF then) bought our house with $0 down. And to think I was "good" with money. HAH!
All you can do is tell them congrats and move on. They aren't going to understand it until they want to know it.
Me too. I never did the big car loan, but I financed my lifestyle on CCs age 22-24. Then the payments got too big, and I freaked out and straightened up. What scared me a lot was the blatant abuse of student loans going on in my grad program. My school would generally offer everyone 25,000 a year in PLUS loans above what was needed for tuition. My program isn't like law school where you don't have time to work-you do, and working in the field is essential for your future job prospects. Well, a lot of people took the full amount every semester. One girl took out a school loan to pay for her wedding :-/ I know several people who ended up borrowing at least 100,000 even though starting salaries in my field are 30,000-50,000. There's even an option to finish in three semesters that myself and lots of other frugal types took, but not these top borrowers. Very glad I found this board to keep me on track! A lot of you here are great examples, and the rest of us can improve together

**Stuck in the Box

Yeah the debt situation has definitely gotten out of control with law schools too. One thing a lot of people don't realize (and I didn't untlI I was applying) is that plenty of law schools offer academic scholarships. They're well-funded programs, and they don't have the same costs like med schools do with equipment, etc. so they generally pass some of that money onto students. I applied to 20 schools because I had no idea where I wanted to go, and I think my grand total of scholarship offers was something like $3 million when all was said and done. I wish I could have taken all of it! But yeah I figured out pretty quick that if they didn't offer me a scholarship, they assumed I would be at the bottom of the class. And you do NOT want to be at the bottom of the class.

I definitely had 2 part-time jobs that basically paid me to study while in law school. I wasn't above sitting behind the desk at the library like so many of my peers. My H also has a part-time job. He sits at the research desk, and in two years has had a grand total of 4 students ask him a research question. They don't pay much, but they definitely defrayed our living expenses. And let's not forget - if you are able to get work at a law firm during your summers, you are typically paid around $1,000-$1,500 per WEEK to do very little except socialize. Many of these summer jobs also result in full-time employment offers after graduation. That's how both H and myself got our jobs.

So law school does NOT have to kill you with debt. And yet there were sooooo many people who paid full price for law school, insisted they had no time to work during the school year, and then couldn't find summer jobs because they went to the best school they could get into and ended up at the bottom of the class. Law schools really convince students that everybody will get a job and make boatloads of money so the debt just doesn't matter. And students themselves don't do the due diligence to find out if it's true. The result of this: lawyers have the highest student loan default rate of any profession. Charming, right?

lifeonthehill · January 2014

Xstatic3333 said:

One girl took out a school loan to pay for her wedding :-/

Why would someone do that! Ugh. My friend took $10,000 more one semester and she lived and ate on campus. She said she needed fun money for the semester. $10,000 worth of fun money?! That is 2x more fun money than we use in a year!
I don't think all students are fully aware of the consequences of loans. They just sign the line and carry on. I was lucky to be able to take a "Life Management" class in high school that helped me realize the details. Even my "College Planning" class just told you to do your FAFSA, apply for scholarships and take loans to cover the rest.

mana8503 · January 2014

I got my first job out of college and got a new car (old one was dying, FAST). It was only $15K - and I was living at home. It still freaked me out! I was like OMG and 30K of SL. Now I hear friends/CW talking about 150K of SLs, and new cars and houses... I would have a heart attack if I owed that much.

alyssa32713 said:

Xstatic3333 said:

One girl took out a school loan to pay for her wedding :-/

Why would someone do that! Ugh. My friend took $10,000 more one semester and she lived and ate on campus. She said she needed fun money for the semester. $10,000 worth of fun money?! That is 2x more fun money than we use in a year!
I don't think all students are fully aware of the consequences of loans. They just sign the line and carry on. I was lucky to be able to take a "Life Management" class in high school that helped me realize the details. Even my "College Planning" class just told you to do your FAFSA, apply for scholarships and take loans to cover the rest.

They will be the ones that whiney and cry on FB about SL forgiveness.

cbee817 · January 2014

I know it's tough to get past what everyone else is doing, but it's their decisions.. just be confident in your choices and give advice to your friends if they ask.

I would be more worried about them calling their cars "babies".. that's really weird!

Jennycolada · January 2014

I bought my first car when I was 20. I put $3000 down (thanks for the $2000 mom!) for my $17,000 brand new Honda Civic. This was in 2005 and I still have the car (it's been paid off fully since 2012).

Student loans are notoriously cheap, and if you have other loans (car, credit card), financially it makes more since to focus your funds to those higher-interest loans. Not that I think having multiple open loans is a good idea, but sometimes it's hard to get around it.

Xstatic3333 · January 2014

mana8503 said:
I got my first job out of college and got a new car (old one was dying, FAST). It was only $15K - and I was living at home. It still freaked me out! I was like OMG and 30K of SL. Now I hear friends/CW talking about 150K of SLs, and new cars and houses... I would have a heart attack if I owed that much.

alyssa32713 said:

Xstatic3333 said:

One girl took out a school loan to pay for her wedding :-/

Why would someone do that! Ugh. My friend took $10,000 more one semester and she lived and ate on campus. She said she needed fun money for the semester. $10,000 worth of fun money?! That is 2x more fun money than we use in a year!
I don't think all students are fully aware of the consequences of loans. They just sign the line and carry on. I was lucky to be able to take a "Life Management" class in high school that helped me realize the details. Even my "College Planning" class just told you to do your FAFSA, apply for scholarships and take loans to cover the rest.

They will be the ones that whiney and cry on FB about SL forgiveness.

I think a lot of the SL issues just come from a lack of understanding how they work. One of my grad school friends was talking about her loans one day and I asked if they were public or private. She didn't know and didn't know there was a difference. My guess is that if you're not sure about that sort of detail you're definitely not thinking about monthly payments and compounding interest. Lots of people don't know about IBR plans, either. They're definitely not the best choice if you can afford the standard plan, but if you can't it's a great way to keep your loan in good standing and save your credit. There's no need for federal student loans to end up a credit destroyer.

Hoffse, I had definitely been given the impression by friends that full time law school was incompatible with paid employment! Who knew. Glad you and H were able find jobs that worked!

mana8503 · January 2014

Xstatic3333 said:
I think a lot of the SL issues just come from a lack of understanding how they work. One of my grad school friends was talking about her loans one day and I asked if they were public or private. She didn't know and didn't know there was a difference. My guess is that if you're not sure ab

I agree, but not because it's a lack of understanding private vs public. It's the ones that take out more than they need for weddings, vacation, partying and then they are like "Oh I have to pay that back?!"

I know (use loosely, she was on my local board on TK) someone that moved across country to follow a boy to college, then law school, in 250+K in SL debt crying on FB because of the SL burden, and not being able to keep it in deferment any more.

Her defense -

"I didn't know I'd have to pay it back when I took it out"

"I just signed to get more money out, Spring Break was AWESOME"

"I thought I'd be a big shot lawyer by now, and they would pay it for me"

"I was young and dumb and now the gov't should fix it for me"

etc

Xstatic3333 · January 2014

mana8503 said:

Xstatic3333 said:

I think a lot of the SL issues just come from a lack of understanding how they work. One of my grad school friends was talking about her loans one day and I asked if they were public or private. She didn't know and didn't know there was a difference. My guess is that if you're not sure ab

I agree, but not because it's a lack of understanding private vs public. It's the ones that take out more than they need for weddings, vacation, partying and then they are like "Oh I have to pay that back?!"

I know (use loosely, she was on my local board on TK) someone that moved across country to follow a boy to college, then law school, in 250+K in SL debt crying on FB because of the SL burden, and not being able to keep it in deferment any more.

Her defense -

"I didn't know I'd have to pay it back when I took it out"

"I just signed to get more money out, Spring Break was AWESOME"

"I thought I'd be a big shot lawyer by now, and they would pay it for me"

"I was young and dumb and now the gov't should fix it for me"

etc

Ugh. That's life-crushing debt. Despite the excuses I almost feel bad for her. Personal finance class should be mandatory in HS IMO.

mana8503 · January 2014

Xstatic3333 said:

Xstatic3333 said:
I think a lot of the SL issues just come from a lack of understanding how they work. One of my grad school friends was talking about her loans one day and I asked if they were public or private. She didn't know and didn't know there was a difference. My guess is that if you're not sure ab

I agree, but not because it's a lack of understanding private vs public. It's the ones that take out more than they need for weddings, vacation, partying and then they are like "Oh I have to pay that back?!"
I know (use loosely, she was on my local board on TK) someone that moved across country to follow a boy to college, then law school, in 250+K in SL debt crying on FB because of the SL burden, and not being able to keep it in deferment any more.
Her defense -
"I didn't know I'd have to pay it back when I took it out"
"I just signed to get more money out, Spring Break was AWESOME"
"I thought I'd be a big shot lawyer by now, and they would pay it for me"
"I was young and dumb and now the gov't should fix it for me"
etc

Ugh. That's life-crushing debt. Despite the excuses I almost feel bad for her. Personal finance class should be mandatory in HS IMO.

I hope I don't come across as heartless in her situation. There was more, like 2 other lawyers in the group trying to help her, give her job leads, but she would poo-poo them all because they were beneath her... she had "experience" and could do "real" lawyer stuff, not just writing up things.

Totally agree about Personal finance class! I wish I had one, everything I know is self taught, or from you guys! I hope to pass some life lessons on to our future kids.

smbenevides1989 · January 2014

I'm so happy I found this board a while back, but I still wish I found it before I was married. I (FFC) was one of those bafoons that bought a nice brand new car. Trust me, I regret that decision since I bought the car, but I'm paying for it. I'm still trying to figure out if I can trade it in and downgrade...

Anywho, if it wasn't for this board, I wouldn't be in the money situation that I am now. I am almost CC debt free, with some money in the bank, and a better credit score than I have had in the past years. DH will be buying a car once our tax returns come in and I have already told him we're not making the same mistake I did when I bought the car. He already told me he wants me to do the bartering and scan the deals. I'm almost certain that I will not let the dealer sharks eat me up this time.

Regarding SL debt. I only took out $4000 a semester (2 semesters total) when I went to school. I had to drop out due to family related issues, and I tried to pay off my interest while they were deferred. Things happened and I stopped paying the interest until I had to start paying for it again in July. Worst decision I did. But all my experiences definitely taught me a lot about money and how I need to stop using CC and other types of loans to feed my fix. Cash all the way now.

Xstatic3333 · January 2014

@mana8503 you definitely don't come across as heartless! Heck, a future lawyer of all people should have known to read the fine print on her promissory note!

@smbenevides it's awesome how much you've paid off! I wish I found this board sooner, too. It's really helped to get my H and I on the same page about our budgeting and goals, but that should have happened pre-wedding! You just can't talk about this stuff with IRL friends, so it's a huge outlet.

cbee817 · January 2014

smbenevides1989: saw your new ticker- congrats! So exciting! When is your due date?

brij2006 · January 2014

@xstatic3333 I agree that this board is a huge outlet! I've always been money savvy and a budgeter, but never realized that what I was doing wasn't the best choices. We bought our home as a foreclosure, our payment is something like 13% of our income. But why didn't we put 20% down? Oh, because we wanted it NOW. I also didn't need that 20k car. I actually had a 12k car at the time that only had 4k owed on it, and low miles. But I "deserved" a new car with my new degree and job. Hah!

I've also realized that there's a lot of us on here and IRL that have made some bad financial decisions and have regrets about them. All I tell my IRL friends when it comes to money is that they are the only ones who can make this a better situation for the future. So what if they went on that great vacation that went on a CC or bought that brand new car. It happened, it's done, now do something to correct it and make sure you never do it again.

I also agree with all of the others that there needs to be a finance class in High School. Dave Ramsey has launched a book called "Foundations" that's for High Schoolers and College students. If only they would teach it in schools.

smbenevides1989 · January 2014

cbee817 said:

smbenevides1989: saw your new ticker- congrats! So exciting! When is your due date?

Thanks! I'm due September 16! But it will be confirmed January 27 at my u/s.

lifeonthehill · January 2014

brij2006 said:

But I "deserved" a new car with my new degree and job. Hah!

Oh jeez. This was my biggest line! I feel like this is the same as someone trying to lose weight saying "I can eat a dozen cupcakes tonight because I went to the gym earlier." I am still having a hard time getting over this feeling.

IAmSherlocked · January 2014

It's so hard to keep your mouth shut sometimes, isn't it? I'm fairly certain that some people just never out-grow that phase of needing to keep up appearances and thinking that they "deserve" to have certain things (I'll admit to this line of thinking in the past).

My father is an excellent example of this. To all outward appearances he looks like he's living the good life--cushy job, nice cars, huge house, but in reality he is way in over his head in debt. It's sad and it scares me to think that they're near retirement and have next to nothing saved. I'm planning on going back to school in the fall, and my dad has been trying to convince me that I "need" to get a BMW or similar car in order to be taken seriously, and that I also need to spend thousands of dollars on an entire new wardrobe--He and I obviously have very different views on this, haha.

In the end all you can do is shake your head and try not to dwell on it.

Trying to keep my big MM mouth shut!

Re: Trying to keep my big MM mouth shut!

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