Of course every little girl
dreams of their fantasy wedding-Cinderella’s dress (the size of a small
planet), a giant church or beach at sunset or whatever, and the perfect man.
HAH! And for the stereotypical view of the dreams of all little boys (as I was
not one but have three brothers, I can only semi-accurately tell you this)-
cars! Big cars, little cars, trucks and every Hot Wheels model created between
1985 and 1998. Then we grow up and turn ten. We realize that to have all of
these private beaches and amazing cars we’re going to have to earn it. We have
to go to college. And where else go to college than the best of the best? Harvard,
Yale if we for some reason don’t get into Harvard, and maybe, maybe Princeton as a back up. But that’s
only if the first two fall through, which probably won’t happen. Everyone knows
that college costs money…except ten year olds who’s parents pay for everything
because their little hands are to small to work in big American factories and
make their own money (Joking! Sorry, was that outrageous? Good.)
Then we turn eleven and grow up. We learn to appreciate the
value of money so much more, although some more than others. The way I see it
there are two ways to live. There is the “I want it so I’m going to get it and
deal with the consequences later” way to live and there is the “yeah, I really
can’t afford that now so I’m going to own up, realize that stuff doesn’t define
me and secretly laugh at the rest of society for being so ignorant” way to
live. I am currently the first one, trying to learn to be a balance of the two
from my brilliant mother whom I have finally come to admit that I will be more
than happy to turn into one day. The point I want to make is that people send
themselves into debt for the “better option” every day
and although some find these debts necessary, it is possible
to avoid that “greedy debt” of wanting what we can’t have. I want to explore
the idea that through downsizing by way of our reasonability and ability to be
aware of consequences, managing spending and debt is very possible and can
become quite the healthy habit.
First I want to address the
brilliant idea of cutting back. Society tells us that only people who cannot
afford the best, or “poor people” must cut back. This is stupid. Millions of
Americans from every social class every year spend hours upon hours cutting
coupons; it’s just that nobody wants to admit it because not having money or
being cheap in our society is a sign of weakness. The majority of people go
into debt trying to make themselves look good to society, wanting to fit into a
world that nobody can actually afford, or having standards for comfort that are
so unreasonably high that it captures them in a downward spiral that’s a pretty
uncomfortable living style in and of itself. Three of the largest unnecessary
debt creators in America today are college tuition, improper use of credit
cards, and over spending on weddings. These three things are underestimated in
their power and ability to drive people into debt for the rest of their lives.
Although it seems as though a college degree would help us to
avoid our inability to pay for things that we want daily or large things like
weddings, we find ourselves completely broke after college, having barely
started working at a job besides summer camp and already owing the government
money. Great. As of the end of my sophomore year, at Cal Poly, a state school I
will remind you, I will owe over $30,000 in loans and am not very happy about
it. Now, at this point most people would be saying, “Well you know Charlotte,
you can find grants and money to help everywhere. It’s out there and nobody
ever uses it.” Yeah except that that money is saved for kids in the lower class
whom it’s a miracle they even got this far. Now, I don’t want to take away from
any of their success, and it really is great that America is sending more kids
to college every year from a larger spectrum across the board. I am really
happy for the kids who said “no” to drugs, “yes” to high school and walked away
with their shiny diploma when nobody else in their class did. I really don’t
want this to sound like I hate poor people, or that I’m a spoiled brat and
deserve everything, but when a kid from a crappy neighborhood who was supposed
to get shot before he finished high school comes out of college with no debt
because of grants and scholarships and I have $33,000 hanging over my head at
age nineteen, I think there is some injustice to that. No matter what type of
college graduate I am, it’s not going to be easy to pay off that student loan.
It makes sense to give to those who have none (yeah I could probably pay for
college with very little outside resources) but by the time we graduate college
and are paying back those loans, we are all on the same platform in our
educational background and ability to pay for our student loans and whatever
else. As an undergraduate I can get all the loan money in the world, but I
can’t get anything that doesn’t charge me with interest up the wazoo from the
FAFSA-which sucks.
One
way that students and families struggle to over come this confusing problem is
by working while going to school. If
students are able to manage their time then this can be a very successful
option. If they can’t manage their time, then this option usually hurts the
student more than taking out millions of loans would. The summary, At What Cost? found that “ the average
grant award per student, as a percentage of average tuition and fees at a
typical public four-year institution, has dropped by nearly one-third since
1982 and the typical student now graduates with $16,928 in federal student loan
debt” (Bannon). This sounds to me like sending more kids to work every year.
Unfortunately this same study found that “nearly half of all full-time working
students are working enough hours to hurt their academic achievement and the
overall quality of their education” which means that working is probably not
the best option. Along with a student working to support himself, problems of
class scheduling, finding time for studying, and not wearing ones self out come
into play (Bannon). Students shouldn’t have to work and the government needs to
do something about equally bringing aid to anybody who is working hard in
college. But I don’t really see that happening right now, what with the shiny
gold state of the country’s economy and all. So how can we avoid this awful
debt?
Luckily, the average level of college debt is
going down in America. This average drop is attributed to the increased
attendance at public universities which then causes more money to be sent to
those schools and causes an overall improvement in that state school system.
These schools have a much lower tuition and because of raised attendance, the
value of education they offer is increasing.
Amongst all of the financial aid frustration shines yet
another beacon of hope in the university world for students. Since 2004 Harvard
University has made motions to decrease the spending and debt that their
undergraduate students must endure year after year. In 2006, the Harvard University Gazette reported that
“beginning with the class [of 2010], parents in families with incomes of less
than $60,000 will no longer be expected to contribute to the cost of their
children attending Harvard. In addition, Harvard will reduce the contributions
of families with incomes between $60,000 and $80,000” (Longbrake). One of the
reasons Harvard began this avant-garde financial aid program was because this
great education was available to such a small percentage of the population that
they realized it couldn’t stay that way forever. Now, more students are
encouraged to apply and a new level of diversity has developed on campus. Now
hundreds of students who really deserve to be there are able to find the
education they deserve.
If your
family is like my family, you get really confused about paying for all of your
huge bills that pop up out of nowhere at the beginning of the freshmen year of
college so you just charge it to a credit card. Luckily my financial aid was
given back to me in a fat check so my mom was able to pay back what she had
spent on the credit card (over $3,000) very quickly. Credit cards always seem
to be an easy way out. It basically consists of spending, getting, and not
paying until much later. It is important to “keep in mind that every time [we]
use a credit card, [we're] borrowing money” (Sharrod). It’s like free stuff! Except that it really isn’t free stuff. It’s more expensive stuff because it builds up
interest because we want what we want, whether we can afford it or not. While
making the film, documentary director of Maxed
Out, James D Scurlock found that “credit card fees have gone up 160% over
the last five years” and that “the average American household has over $9,000
in credit card debt and spends more than $13,000 a year on interest payments.”
This makes me wonder why people use credit cards on things they can’t pay back
quickly. Of course something like medical bills is understandable but that flat
screen T.V. ? I’m not sure if the
average American weighs convenience with the insane interest rate that can
often cause that flat screen to cost twice as much as though it were never on sale.
I have to laugh at this.
The
Documentary Maxed Out presents to the
audience, an old woman who was forced to pay her house payments by credit card
after her husband passed away. She admits, “If I read the fine print they were
right, you know, I did sign my life away” (Scurlock). These are the unfortunate
circumstances that thousands of American’s find themselves stuck in every year.
Maxed Out also reveals that “this
year more Americans will go bankrupt than will divorce, graduate from college,
or get cancer.” This seemingly available “invisible” money that creates the use
of credit cards is spent, in large part, by people in the lower classes who
might not even have money for necessities such as food and rent. Chart 6 shows
the highest increased credit card use by the two lowest income quintiles from
1989 to 2001. More and more of the lower classes are getting credit
cards—credit cards that are less likely to be paid off in full on time because
of their economic standings, thus more interest.
There are too many people
and not enough love (and by love I mean money) to go around, which is why
credit cards work so well for so many people. (Wait, I thought credit cards
made me lose all my moolah in the first place? Oh! I get it! The world hates
me. Fan-tastic.)
As much as
I personally hate credit cards, my gracious, loving mother laughed in my face
when I told her I never wanted to have to get one. She told me that I needed it
to build good credit and that I would use it once I got it. Yeah, because I pretty
much have the worst spending habits of all time. But using a credit card well
and being responsible about it, turns out, can actually be a good thing. In the article Steps to Building Good Credit, I found that by following a few
simple guidelines, a credit score can really sell me to investors if I ever
want to put all my money into something that’s really worth keeping.
Apparently, “setting up revolving debt credit cards like Visa, MasterCard,
American Express, Discover or any department store credit cards is important to
[my] credit history because it's a self-managed account and [I] know [I] have
to pay an installment at least once a month” ( Anonymous). This shows that I am
responsible and meet my financial obligations. Unfortunately, the world is not
a perfect place and people often spend more than they realize and are then
unable to pay their credit card bill in full. This leads to minimum payments.
But never fear! There is a way out of that deep dark debt-y hole. It’s called
Responsibility (gasp). “Develop[ing] a debt-reduction plan, or seek[ing] help
from a nonprofit credit-counseling agency, preferably one affiliated with the
National Foundation for Credit Counseling” can help us get out of our nasty
debt (Sharrod). If you can completely avoid the debt before you even get a card
that is probably the best way to go.
“It's smart to shop for the best deal-- a card with no annual fee and a
low APR (annual percentage rate)-advises Pat Martin, a financial consultant at
Ryan Martin Associates in New York” (Sharrod).
A low interest rate can change our world and being able to feel good
about keeping no balance on credit cards can do the same. So if it’s possible
to build a bridge over that big dept-y hole, I say let’s spend healthily and
avoid the trouble that isn’t required of us to deal with. Being able to balance
healthy spending habits is the closest thing to getting the best of both
worlds. The trick to having a credit card is responsibility. It is important
while charging to “think of credit-card debt as a high-interest loan”
(Sharrod). That way, we will all be more likely to keep our invisible money on
our tiny shiny plastic and not put it in the “I-O-U” vault of sadness and
debt-y darkness.
As
bad as credit card debt is, wedding debt also plagues a huge percentage of the
population. Wedding debt causes newlyweds to be in debt for years because of
one special day. As we all know the fictional character, Bridezilla, we must
assume that part of the reason she is so angry all the time is due to the fact
that she will have exactly $8.42
in her bank account at the end of her honeymoon to spend on
food and rent for the next month and a half—not to mention all the credit card
bills and thank-you notes she has to follow through on.
But it really is a special
day and there can be a lot of wonderful moments. But those wonderful moments
are now coming at a higher price than ever. Reported by “the Wedding Report, a
research firm that compiles stats on the wedding industry, the average cost of
an American wedding rose to $28,732 in 2007, as the festivities have grown
increasingly elaborate and personalized” (Lee). Society has come to see the
definition of a wedding as something more elaborate and intricate than ever
before and couples’ standards have increased, along with their budgets, because
of that. A real life example of this increased budget can bee seen in “the
Virginia Beach Country Club wedding of LaToya and David Griffin [. They were]
left a lifetime of memories, but the couple's $11,000 bill has yet to vanish"
(Nash). There is a lot to think about
when planning a wedding and every single thin that the bride and groom have to
think of or plan has hundreds of different options. What kind of dress? What
color? Centerpieces, flowers or shells? Big flowers or little flowers? The
options are endless. But the bank account isn’t and sometimes that’s hard to
remember when the invitations that are twenty times cuter are only $100 more.
No matter how big or small, if the bride and groom don’t think about the consequences
it’s going to cost. As common as wedding debt is, it’s really almost that easy
to avoid just by scaling back and remembering what is really important (love or
a consumer economy?).
The trick,
as with college debt and credit card use, is to find a healthy and moderate
balance. Luckily, many couples have also found loop holes in expenses. Kelly
Collins and Paul Hilcoff wedded on a Friday at Nashoba Valley Winery in Bolton,
Massachusetts. Although a Friday wedding
may seem a little out of the ordinary, it’s something these two are willing to
deal with when it saves them enough to buy a new refrigerator (or something
like that). “All this will cost $4,500, or $1,500 less than it would on a
Saturday” (Lee). They also purchased the centerpiece flowers wholesale and
bought their wedding favors through a teachers catalog. “Rather than a wedding
gown, Collins will wear a $200 ivory bridesmaid dress. The couple made their
own invitations with $75 worth of materials…The final bill: $9,000” (Lee).
These two were able to have a successful wedding and they were able to spend
wise by finding alternatives to normal wedding gifts like a teachers catalogue.
It is possible to scale back and still have the things that everyone wants.
My mother,
Judy Cashell, speaks of her wedding expenses from 1987, “Some of it we charged
to credit cards. Well, we didn’t own a home so it was like buying a house.
People told us not to spend so much money on the wedding. The rings were more
expensive but your dad doesn’t regret it. We tried to cut back here and there.”
There are many other ways to cut back on the big day. Judy also looked for
discounts when it came to the number of guests by inviting only their good
friends and not taking a limo from the wedding to the reception (the buildings
were across the street). Another bride used her family’s heirloom as a ring and
was able to find catering from a local farmer so everything was seasonal and
there was no middleman (Lee). Bottom line, if a cheap nice wedding is desired,
a couple can cut corners and leave out extreme extravagances to attain it. If a
giant production is what the couple wants, that can happen too. Couples just
need to keep in mind what they are getting themselves into and that they will
eventually be paying everything back.
Debt has
come to rule peoples lives. Through college expenses, credit cards or weddings,
people find themselves trapped in a sometimes life-long commitment that they
signed up for without reading the fine print. But cutting back and only buying
what we need is possible, if we are determined enough. I’ll still tell my mom that I don’t want a
credit card until I have to get one, but the fact is that the greater America
is running on credit and debt. It is important that we learn healthy spending
habits. Whether it is finding a cheaper university that offers just as good an
education, paying our credit card bill on time, or going for the simpler
wedding, America ca improve its spending habits and become a place
to grow a healthy strong economy-- because an economy on credit and debt isn’t
going to last us very long. So maybe that Cinderella ball gown will only get to
be the size of the moon, and those cars will be simplified to singular car,
although still nice. We can still be happy with what we have just because it
isn’t as good as what Wilson has over the fence. Healthy spending habits will
last a lifetime, it is up to us to get them going as early on in life as
possible so that one day we are not the ones losing everything we had because
of one tiny piece of plastic.
Works Cited
Anonymous.
"Steps To Building Good Credit." Jet. 05 Jul 2004. 46. eLibrary.
Proquest CSA. Cal Poly San Luis Obispo. 30 May 2008.
.
Bannon,
Ellynne and Tracey King. “At What Cost?”. April 2002. 8 June. 2008. .
Cashell,
Judy. Personal interview. 1 June. 2008.
Jeninne
Lee-St. John. "To Love, Honor and Save Money." Time. 02 Jun
2008. eLibrary.
Proquest CSA. San Luis Obispo. 30 May 2008. .
Longbrake,
John. “Harvard Expands Financial Aid for low- and middle-income Families.” Harvard University Gazette
30. Mar. 2006. 7 June. 2007
< www.hno.harvard.edu/gazette/daily/2006/03/30-finaid.html
>.
Maxed
Out. Dir.
James D. Scurlock. DVD Magnolia Home Entertainment, 2007.
Nash,
Sheryl Nance. "GETTING BACK ON TRACK." Black Enterprise 38.7
(Feb. 2008): 80-81. Academic
Search Elite. EBSCO. [Library name], [City], [State abbreviation]. 29 May 2008 .
Sherrod,
Lena. "5 WAYS TO GET CREDIT-CARD SAVVY." Essence. 01 Sep 2004.
122. eLibrary. Proquest CSA.
Cal Poly San Luis Obispo. 30 May 2008. .
.
