Parents: Get off of the hamster wheel of DEBT!

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Woman_HamsterWheel

 I accumulated $53k of debt while in college. I borrowed $49.2k of student loans; 25.8k private loans and $23.4k federal loans. In addition to the student loan debt, I accumulated $4k in credit card debt. The credit card debt was not due to me going on mini-shopping sprees or taking amazing spring break vacations. The $4k of credit card debt was due to various life experiences: co-signing a brand new car, medical expenses, car repairs and bridging the gap from the shortage of college loans and tuition.

I have extremely humble beginnings; I am the middle child of three to a hard-working single mother. Every semester my student loans didn’t fully cover the tuition, and I couldn’t increase any of my loans to cover the balance. My mother didn’t have a few hundred dollars to give me to cover the costs. I worked as a manager at a fast food restaurant and held an on-campus job, but I couldn’t afford to pay additional tuition costs along with purchasing my books and car repairs. I charged the tuition shortages to my credit card.

In college, I had a “hooptie” so I had monthly car repair expenses. In order to get to work I had to get the repairs done. If I didn’t work I wouldn’t be able to pay my bills. I felt trapped; it was like a vicious cycle that I couldn’t get out of. Whenever I saved the money to cover my semesters book cost; I would have an unexpected financial burden appear that would wipe out my savings and go on my credit card. The cycle continued until I reached $4k of debt. I explored my options to get out of this situation. I realized that if I asked for help I could catch a ride with a friend to work or catch the bus to work; I decided to forgo my car for a few months to save and pay off my debt. It wasn’t an easy choice, but I had to make some sort of sacrifice to get ahead.

Eliminate Your Hamster Wheel

  1. The first step to eliminating debt is to have a written budget! A few posts from now I will share my budget tips. But for most people who are in denial of needing a budget…ponder the following!
  2. Is there a large expense that keeps reoccurring every other month that is keeping you from saving?
  3. You have to figure out a way to eliminate this expense and get off the hamster wheel.
    • If it is a car, could you do without it for a few months? Is there a bus line that could get you around? Friends, UBER?
    • Credit Card minimum payments keeping you on the hamster wheel? It’s not the payments; you have to take a look at your lifestyle.
    • Student loan payments keeping you on the hamster wheel? If you are barely getting by before making payment, contact your lenders to see if you qualify for any income-driven repayment plan.

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