- Based on the article 'How Much Student Loan Debt Is Too Much?
- That question is a game of how close to the edge of the cliff can we get to before we fall off
- What question should we be focusing on instead?
- Rather focus on getting away from debt as much as possible
- Quote of the lesson
What is more important, determining what the most amount of debt you can take out or determining how you can purchase an education, home, car, etc the cheapest way?
Inspired by an article titled "How Much Student Loan Debt is Too Much? Here's a Formula' that I found on Yahoo Finance we are going to talk about the too much debt game that our culture likes to play.
The article has some good information, however it starts off with the position of determining the maximum amount of debt once should get for a degree. It's the old game we used to play as children. Where we would jump off something and see if we could do it or not without getting hurt. However the game always ended the same, the last person to jump from the highest spot, always got hurt.
Instead of asking what is the maximum amount of debt we can take out for a purchase, isn't it better to determine what is the minimum price we need to pay for that purchase?
The problem with determining what the maximum amount of debt we can take out is, that it gives us no financial margin in our life. If one thing goes wrong, our plan goes out the window. The problem is that kinds rarely goes as planned.
I'd rather see an article dealing with out to get an education on the cheap that requires the least amount of borrowing, or no borrowing at all. Again it is a mindset thing, but when we ask ourselves the question, How much? Instead of, how much a month? Our finances will go to another level.
I'm not against owning nice stuff, I'm against owning nice stuff with debt.
Below are other resources mentioned on today's lesson:
- Podcast Lesson #103-Mindset on Money
- Should parents have a say in a child's college major?
- Financial Tips for College Graduates
Today's quote of the lesson is brought to you by the JW's Financial Coaching Newsletter