Several years ago, after already having applied for and received student loans, I discovered that student loans are stupid. I had heard that the interest rates and the length of time they set up for you to pay it back (which I now know is called the Amortization period) were dumb and that if you only paid the minimum payment on your student loan that you would pretty much be in debt to the government forever and give them a ton of your money in interest at the same time. (I’m going to come back to this point in a few posts). I felt stupid for not knowing there were even other choices out there. When I graduated high school I had no idea what a line of credit was, let alone a specific student line of credit and didn’t learn about them until after my first year of University. The summer between my first and second year, at 20 years old, I decided to try and get me one of those student lines of credit and to stop asking for government student loans. I went to my bank to speak with a financial advisor fully prepared. I had all my papers lined up to show him that a line of credit was both in my interest and in the interest of the bank. He laughed at me and said, “no.” Apparently I didn’t had enough stable income (I worked all year for the same company but went from summer temp work to school year temp work, never permanent….Proof of my three years of employment with the company wasn’t enough). Also my credit was only so-so. So it was get a co-signer or don’t get a line of credit. I didn’t have anyone I felt comfortable asking to co-sign so royally ticked off I marched off to TD Bank stating that I would be willing to close down my account with BMO and move all accounts to TD if they would provide me a small student line of credit. Guess what? He laughed at me too. I walked away defeated and crushed…pretty sure I cried too. Probably on the bus. Ya I’ve been “that” person. Needless to say the remainder of my university experience was paid in part by government student loans.
Whilst talking to the advisor at BMO he told me that while he couldn’t approve me for the line of credit that I would be just fine. That I clearly had a head on my shoulders. Perhaps to cheer me up, he suggested that I go for a walk through one of the City’s swankier neighbourhoods. He told me to look at the houses closely and think about who lived inside of them. I immediately pictured doctors, lawyers, and professional athletes. He told me while that was true, a lot of those houses are also owned by cab drivers who simply understand money.
This whole experience taught me two things. 1) I did not understand money and finances AT ALL and 2) if I was going to make something of myself it would be up to me to gain an understanding of money and finance because no one was going to do it for me. I could continue to float through life as lots of people do just living pay cheque to pay cheque and end up old and broke or I could get off my ass and take it upon myself to learn and be one of the hypothetical cab drivers in the mansions.
I’m now 24 and here are my (and my husbands) financial goals (The “money” portion of the blog will be aimed at showing you what we are doing to achieve these goals and why these goals are important to us):
- Be consumer debt free forever
- Have reliable vehicles
- Be able to take annual vacations by alternating between “big” trips (such as: Disneyland, England, Italy, the Maritimes, Hawaii, Jamaica, and Egypt) and “small” trips (camping in the mountains, going to B.C. or Saskatchewan, Drumheller etc.)
- Obtain financial independence and literacy
- Pay off my student loans in 3 years or less
- Buy a house we love & live mortgage free by 55
- Have enough money to retire comfortably (I mean REALLY comfortably….like winter home in Texas kind of comfort)
- Have an education savings fund for our children
- Ensure that our children are able to get the best opportunities, including top rated daycares and schools, as well as extra-curricular activities of their choice
Sound like a lot? Maybe. But we’re young and already well on our way. As of two days ago, we are consumer debt free, we both have reliable vehicles, we have traveled (small-B.C., large-Cancun, small-Drumheller, large-Cuba, small-Jasper) and have started planning for a big Trip to B.C. and Washington for next summer. We are also well on our way to financial independence and literacy, which I believe is evident given the amount that we have achieved in just over 4 years, the whole while I was a full-time student making next to no income….not to mention we paid for a wedding and honeymoon in there too!