The Chronic Consumer

One of the front page Yahoo stories today is about a college student that incurred close to $200,000 in loans in order to earn a Bachelor’s degree from Northeastern University. Now the person is speaking out against what she deems to be unfair loan practices, saying someone needs to “sit down” with prospective students and explain how taking out all those loans will impact their future credit rating and how quickly interest accrues.

OK, she can speak out against whatever she wants. But the problem I have with this person is that she thought it was cool to spend close to $50,000 per year on college to begin with! To me, if you’re not brilliant and won’t be fielding scholarship offers from the Ivy League and if you don’t have a massive trust fund to tap into, then choosing a college should come down to comparison shopping — just as you’d do for any other purchase. Who in their right minds would think spending $50,000 per year for a Bachelor’s degree was a smart move?

Look, before buying a new car, you’d shop around for the best value, right? Before buying a life insurance policy, you’d check life insurance quotes online to make sure you were getting the best deal, wouldn’t you? So why would you approach a college education any differently?

The best way for “financially challenged” folks to get a Bachelor’s degree is to spend two full years at a community college getting their general education courses out of the way. Then they can transfer to a four-year school to complete a Bachelor’s degree. Choose a state school over a private school if you have to, and mix in some online classes with on-campus classes to save even more money.

It ain’t rocket science.

Oh, and the young woman who is 200k in debt? Has started a website where people can donate money to help her pay off her student loans. Only in America.

I just read an article in the Wall Street Journal about a couple whose dream house, originally projected to cost a reasonable $400,000, ended up costing $6 million — and the thing isn’t even finished yet! Obviously this is not the kind of money I’d ever be able to spend on a house, but I just don’t understand the figures. If they could afford $5.6 million in cost overruns, why didn’t they just shoot for a fabulous house to begin with?

Apparently, most of the problems have been due to the couple themselves. They’re not the easiest to work with (as evidenced by the SEVEN architects that have been on the project at one time or other), and they keep changing their minds about what they want.

I admit the house looks pretty good in the pictures I saw, but still… what kind of idiot goes $5.6 million over budget on a private residence???

Remember when 680 used to be considered a good credit score? If your rating was in this area, then you could probably qualify for the best rates on loans, credit cards, etc. But according to this article I just read over at SmartMoney, now you need at least a 720 to qualify for those same perks.

Frankly, I don’t really understand how credit scores are calculated and don’t pay attention to mine. All I know is that I pay my bills on time (ALWAYS) and don’t have a wallet full of credit cards that I never use. I probably don’t have a perfect score though, as I never carry a balance or incur extra fees and penalties. Of course lenders WANT people to carry a balance on their cards, so I doubt I’m viewed as desirable.

Anyway, if you’re interested in “how 720 became the new 680″, then click through to that SmartMoney article.

I keep receipts from just about everything I buy, and put them into envelopes that are separated by category (such as food, clothing, entertainment, etc.). This allows me to get a clear idea of how much the family spends on these things.

Anyway, I was looking through my “Health & Beauty” envelope this morning, and decided to tally up how much I’ve spent in the past 12 months in my quest to find the best acne treatment for my skin. Well, the total came to an absolutely staggering $586.24!!! Granted, this included a dermatologist visit and a very expensive prescription for Differin (neither of which were covered by insurance), but still… That’s a lot of money!!

I’m sure some of you out there can’t believe that I would spend that much to try to combat acne, but it got to be pretty bad — to the point where I didn’t even want to leave the house because of it. But now my skin looks 100x better, and though it’ll probably never be perfectly clear, I’m now at a point where I can live with the results. And looking on the bright side, at least now I just have to spend about $10 per year on BP products and I’ll be fine!

I am officially done with my Christmas shopping for this year — and I still have 6 days to spare! That’s pretty good for me. What’s even better is that I think I got some really nice gifts that will be appreciated by the recipients, and I didn’t have to break the bank in order to do so. I can’t stand hearing stories about people who practically bankrupt themselves by using money meant for their mortgage payment or Medicare supplement premium on gifts instead. Surely your family is understanding enough not to pressure you into spending money you don’t have!

Anyway, I will have some credit card bills to pay off next month, but that’s to be expected. At least the bills will be manageable!

Before the Christmas shopping season gets started in earnest on Black Friday next week, I just want to remind you all to spend responsibly. There’s no reason to go into debt at Christmastime. Your kids will still love you even if you can only afford to spend, say, $20 on toys instead of $200. So please don’t go out there and blow your mortgage payment, college fund, or home insurance premium on gifts that the recipient won’t even remember three months from now. It won’t be the end of the world if you don’t buy out Toys R Us for your kids. Trust me, they’ll survive!

I just got word that my mom was laid off today. I guess this shouldn’t be such a big shocker when the economy is as bad as it is. She worked in IT for a major insurer. They laid off more than a third of their IT group today — more than 300 out of 900 people.

As my mom is 60 (will be 61 in a few months), it’s not very likely that she’ll get another job in this field. As a result, she’s going to have to do some major budgeting overhauls to make sure her 401k and pension can stretch even farther than she expected they’d have to.

This layoff comes at a particularly bad time, though. She is in the middle of renovating her bathrooms and basement, and between paying for things like new ceramic tiles and Danze faucets, not to mention all the labor costs, she’s going to be shelling out a lot of money for the project. But it’s more than halfway done at this point, so it would hardly be feasible to back out now.

My mom’s bad fortune will also impact my own finances, as I’ll have to spring for plane tickets to go visit her, instead of having her come visit us as usual. So I better start pinching my pennies too!

That’s not to say that I’m rich now, but I don’t have financial problems like I used to. When I was in my mid-twenties, I was pretty bad off. I hadn’t yet graduated from college, was living in an efficiency apartment at the Westgate complex, and was working the night shift at a metals factory. I remember that I took home about $230 per week after taxes (I was making just $6.50/hr), and would spend almost my entire check over the weekend.

I had no money management skills at all, and just spent whatever I had on whatever I needed. If it was the week that rent happened to be due, I’d pay my share of the rent ($125) and have only $105 left to spend. If there was nothing due, I blew everything on cigarettes, beer, and blackjack.

Everything turned around when I got a better job and forced myself to follow a budget. I spent only what I had to, made sure I saved at least 10 percent every week, and cut up my credit cards until I got out of debt.

I know times are tight right now, so you’re probably tempted to charge more stuff on your cards, but I’m telling you: don’t do it! You’ll regret it in the end, and have a mountain of debt to show for it. There is a light at the end of the tunnel, but it requires discipline to get there!