Having a child changes your perspective on things, as every parent knows. Recently, I’ve been thinking more about the advice I’ll give once my kid starts talking about what they want to be when they grow up.
A common response I hear whenever this question is posed (by someone of any age), is “Do what you love.” In a perfect world, that is absolutely the best answer. It’s the answer I’ll give when my child is young and lives life with no preconceived notions of what’s possible.
The reality is, as idyllic as it may be, doing what you love isn’t always the prudent decision. When you’ve got bills to pay and loans to honor, the first thing you need is a paycheck. Maybe that sounds harsh, but it really shouldn’t. It’s just the fact of the matter.
In my last post, we went into some pretty specific details about why I feel that Dave Ramsey’s financial plan doesn’t work for high-debt young professionals. One of the big issues I have with it is that it doesn’t call for any retirement investing until after your student loans are paid off. I think this is the biggest flaw in Dave’s plan, and as much as I love his work and have been personally inspired by him, this point deserves some deeper inspection.
I know what that post title sounds like. You’re thinking, “Here’s another entitled Millennial, complaining about how tough life is.”
I’m going to make a statement right off the bat: Dave, if you’re reading this (verrrrrry unlikely, but just in case), let me just say that there is no one that I need to thank more for getting me interested in personal finance. I know that the title of this post is a little harsh, but it’s really not meant to disparage how good Dave is at what he does. In fact, I’d go as far to say that when it comes to inspiring people to learn about their finances and encouraging them to get out of debt, nobody does it better. It’s a noble mission he’s on, and he’s helped countless people improve their lives through his programs, including me.
Most things in life worth doing involve periods of excitement, fulfillment, and happiness, punctuated by moments of terror and self-doubt. Paying off a ginormous loan is no different.
I’m totally guessing here, but I would say that about 90% of the time, we are perfectly happy and content with our student loan repayment plan. We see the forest for the trees, so-to-speak, and always try to focus on how we assume we’ll feel at this end of this journey. Even when we get frustrated from time-to-time about how strict we have to be with ourselves when it comes to spending money, we usually can still keep our eyes on the prize and focus on a debt-free future.
It’s almost impossible these days to go on any personal finance blogs that discuss student loans in depth and not see articles/ads/links on refinancing. There are several major student loan refinancing companies right now that are starting to have a large presence online, but newer companies are popping up every day as well. Especially for people that graduated with similar debt to that which we have (interest rates in the 6-8% range), refinancing is almost a no brainer.