Why I’m Doing This (Part Two)

University of San Francisco

(Disclaimer: I don’t mean to knock anyone who didn’t go to a private school. I’m just sharing my experience at a private Jesuit university.)

If you were to ask me why I even decided to go to an expensive private college in the first place, I’d have to take you all the way back to my senior year in high school (ages ago, I know ;P). Long story short, it was almost time to turn in an intent to register and I was set on going to a public university. But my mom sat me down and convinced me that we can work it out, and that the tuition would be worth it. I hastily agreed with no real thought into it, but it ended up being one of the best decisions I’ve made.

That's right ;)

That’s right!

I began my college career at a place that I didn’t really want to go to. But by the grace of God, I slowly began to realize how perfectly I fit into the USF community. My professors (well, most of them) truly cared about me; and not just how my assignments were going, but also about my well-being. While old high school classmates were struggling to get into the classes they needed at state universities, my school made sure I was on track to graduate on time (even a little early). A majority of the students at USF were also receiving financial aid, so I didn’t feel out of place. I made some lifetime friends working at the school’s cafe as well as in my business classes. Juggling classes and work challenged me in ways I could have never imagined and I gained life experiences that I don’t think I’d have at a place that didn’t challenge me.

Awkward solo picture...

Awkward solo picture…

But the number one reason why I love USF is in their (former) mission statement. When I was a student, it was “Educating hearts and minds to change the world.” At my graduation, we had a speaker talking about how we didn’t just get these business degrees to get rich. This speaker went on the tell us of the sad stories of poverty in Africa and that we are responsible for them – with great power (education) comes great responsibility. I heard many of my fellow graduates murmuring things like, “Why is he talking about depressing stuff? We’re at a graduation!”, but instead I was inspired. My education was meant to really change the world, not just change my bank account. Whether it was doing a semester long internship at an after school program, or writing a new business plan for a struggling Bay Area business – USF really helped me realize that we need to be the change we want to see in the world.

I’ve seen plenty of articles lately about college not being worth the money anymore. I’m not going to ignore the student loan debt crisis, but I think it depends. For some (like me), paying for these loans is like investing in myself, investing in something worthwhile. There are plenty of universities, both public and private, that are worth the money if you want to learn! On the other hand, if you don’t see the point in getting a degree and just want to go ahead and start working, then do that! It depends on what your goals are.

I didn’t know it at the time, but getting an education from a Jesuit university was definitely one of the best decisions I’ve ever made for myself and the loans I’m paying off right now are worth every single penny. You can’t convince me otherwise.

AMDG – Ad Majorem Dei Gloriam (It’s a Jesuit thang :)),
Lisa

July 2012 Update

Happy Monday everyone!

So here’s my current situation with the loans:

07.01.2012.Update

If you read my last monthly update, you’ll recall that I thought I would be receiving an over $1000 windfall from my landlord which I was planning on using towards wiping out my non-direct loan completely.

Well, long story short – that didn’t happen. I’m getting some money back, but definitely not all. I don’t want to talk too much about it, but let’s just say that money changes people and some would do almost anything to keep yours, even if it means accusing you of doing something that you clearly are not capable of doing.

Anyways!!!

Now, I’ve got to be completely honest with you guys. I spent a lot of money in June 🙁 I went out more than I should have, and I spent more of my “spending” money than I budgeted. I’m not perfect, and I think it’s important to know that just because you have a plan in place, things don’t always go as planned. Mistakes happen, as well as other events that might be out of your control.

My crazy cousins and me

My crazy cousins and me

But at the same time, I don’t regret overspending. Yeah, June was a little tight budget-wise, but I spent that money as I was spending time with some very important people in my life. It’s also important to just have fun once in a while! Now, if I were going out all the time and if I was reckless with my money, then that would be a problem. Don’t worry, I know how to control my spending at restaurants (and I hope to share some tips soon)!

Fortunately, I sent in my loan payments as soon as I had the money for it, so I’m not behind in my loan repayment schedule. I always make sure that once my paycheck comes in, my credit card/rent/loan payments go out right away. That way, I’m still on track with my financial goals and I’m forced to not spend that money on unnecessary things.

My family in front of our new house!

My family in front of our new house!

July is going to be a big month for me and my family. A few days ago, we received the keys to our new house (which is under my name)! Not only will this look good on my credit, but my family definitely needed to move into a new place. New house, new beginnings 🙂 However, it feels as if the packing will just never end! I thought my apartment was bad – cleaning up the house I grew up in is 10x worse!

We plan on officially moving in sometime in the first two weeks of July. But until then, my weekends have been full of furniture shopping and packing!

We don’t need to start paying the mortgage until August, so you can say that we’re saving money in July. But really, we’re spending the same amount we would’ve spent on the mortgage on new furniture, paint, new fridge, etc. Moving is not cheap!

We plan on having a garage sale sometime this month once we get ourselves organized. Not only will this sale help us get rid of a bunch of stuff, but the earnings can help us with all the moving costs! Which is good because I have a lot of shoes to get rid of! 😉

My budget has changed a little, too. There have been lots of changes lately at work and I’ve been doing a lot of work on the finance side of the company. After thinking a lot about what I want to do for the rest of my career, I realized that finance is definitely more my style. I majored in accounting, but I have no real desire to continue along that path.

With that being said, the money I’ve been saving towards the CPA exams/reviews are now being allocated to my car fund! I hope to buy a car by the end of this year, so the extra money will definitely help me attain a bigger down payment. Bigger down payment = smaller monthly payment. Yay for that! 🙂

As far as these loans go, it was definitely exciting to throw $550 at them this past month instead of the minimum $200. It definitely made a dent; but at the same time, I still have about 94% of my original loan balances to pay off 🙁  Even though I’m accelerating the process, it’s still moving pretty slowly. Financial freedom doesn’t happen overnight! So I’m trying my hardest not to be discouraged and to keep on keepin’ on.

That’s all for now, folks. Have a wonderful Independence day!!!

AMDG,
Lisa

[Monthly Must-Reads] June 2012

Happy Friday everyone!!!

I read a lot of articles. [Monthly Must-Reads] is a new monthly (duh) series featuring some of my favorite articles I’ve read for the past month.

12 Things You Probably Own Too Many Of – [Apartment Therapy]
I’ve packed and moved out of my apartment in SF this past month, and now I’m packing up my stuff from my current house so that we can move into our new house next month. This list is incredibly accurate and I’m just now seeing exactly how much space all of this stuff is taking up! Even if you’re not moving soon, it’s always good to regularly go through what you have and sell or donate all the things you don’t use anymore, and these items are a good place to look at first.

40 Ways to Relax in 5 Minutes or Less – [The Greatist]
Self-explanatory 🙂 I love that one of their suggested ways to relax is to dance!

Get A New Job Every Two Years – [Thousandaire]
Don’t get stuck in a rut! Even if you really like your job, you should be pushing for something new every two years – whether it’s a whole new company or just a whole new job title.

Get Hired – [Lifehacker]
Love charts and pie graphs? Need help landing a job? Here’s a fun visual guide to the hiring process covering topics such as how to prepare for an interview, common interview questions, and even price ranges of what to order on a lunch interview.

The Great Student Loan Debate: Part 1 – [MintLife]
The fixed interest rate on federally subsidized loans is scheduled to increase from 3.4% to 6.8% on July 1st! Definitely not good news. Although I truly believe my education was worth it, I don’t want to pay hundreds more in interest than I was already planning on paying! That’s why I started this blog: to help keep me accountable on aggressively paying off these loans!

How Many Goals Are You Chasing Right Now (And Do You Have Too Many)? – [Pick The Brain]
I’ve been wrestling a lot with the notion of too many goals lately and this article came to me at the right time. Just because I can’t achieve something this year doesn’t mean I can’t do it next year. This article has helped me prioritize what I need to work on. More on this in my next monthly update 🙂

Insanity and Perseverance – [The Simple Dollar]
If you want to make a change in your life, then do it! But don’t expect it to be easy. It may not look or feel like much after a week or two, but you shouldn’t be looking for a quick fix anyway. Long term change isn’t made after one decision – it’s made after a decision that has to be made over and over again.

Make Your Bed! For Productivity, Profit, and Peace – [Apartment Therapy]
As a kid, I used to see no point in making my bed. However, in college, I began the habit of making my bed every morning. It doesn’t sound like it’ll make a huge difference, but it ended up being an essential part of my mornings. Making my bed every morning has lead to many productive days.

Personal Finance is Rarely Black and White – [The Simple Dollar]
Two people with the exact same financial situation can easily have two completely different ways to do their finances. Although it’s good to learn from others, you need to sit down, ask yourself what’s important to you, and then create your own financial plan. Don’t just follow what everyone else does, or whatever the rule is – learn about it, think about it, then make it your own.

Why Women Are Burning Out at the Office Before Age 30 – [LearnVest]
Burnout is spreading throughout Gen Y women like crazy (oh gosh, is that me?)! This is an interesting article that gives possible reasons as to why this is becoming a problem among my generation. There are also a number of ways to prevent burnout, as this article covers several of them, such as take your vacation days (how do I say no to that?) and develop your hobbies outside of work.

[Why Not] Hold Off On Savings?

[Why Not? is a new monthly series highlighting the decisions I’ve chosen not to make in my journey to student loan debt freedom. I will go over the pros and cons of the particular choice and I’ll also explain why I, personally, have chosen not to go this route.]

Currently, I’m saving almost 40% of my income for various financial goals. I’m maxing out my Roth IRA and I have separate savings accounts at ING Direct (not affiliated) for my various short-term savings goals: emergency fund, car fund, gifts fund, career fund, and a travel fund.

Now, if I really wanted to get rid of my student loan debt quickly, I could just allot all of my monthly savings to my loans. Let’s go over the pros and cons:

Pros:

+ Currently, I’m on track to pay off my loans by July 2015, according to unbury.me (I will do a review on this website soon). If I were to add the amount I’m saving to my current monthly debt avalanche payment of $550, I would have my loans paid off by July 2013 – about two and a half years after graduating and two years earlier than planned! New York 2013, anyone? 🙂

+ If I look at my loans as an investment in my personal education (which I do), skipping the savings accounts in favor of my loan repayments is a good investment strategy. Since my savings accounts are only earning 0.80% APR, throwing the money at my loans that range from 5%-6.8% would be a better use of my money.

Cons:

– My car purchase would definitely not happen this year (sad face).

– I would not be able to take the CPA exam. If you don’t know, it’s expensive to take this four part test ($100 initial registration, $743.20 total for all four parts of the test, and $3,245 for the review)! They are changing the requirements in California to sit for the exam in January 2014 (must have 150 units). I graduated a semester early with only 128 units, so I have until December 2013 to pass all four parts of the exam. So if I wait until July 2013 to start studying (since I can’t pay for the reviews until I’m done with paying my loans), I would have to be incredibly fast at passing all 4 parts of the exam – I’d have to finish in 5 months to be exact. In other words, I probably wouldn’t take the test at all.

– My retirement savings would starve and I would lose some benefits of compound interest. I could go on and on about how starting early on retirement savings is very beneficial, but here’s a great article from Get Rich Slowly that quickly highlights why compound interest favors the young.

My final decision was to keep saving.

Although some would argue that using all that money toward my loans would be better for me, I have short-term goals that I absolutely have to save for. Now that I’m living back home in Vallejo, I absolutely need a car to get around (no more MUNI for me). The CPA exam is something that needs to be finished by January 2014 or else I would no longer be qualified to sit for it. And retirement savings is a very high priority of mine.

I know my loans will be paid off by 2015, I’m still saving thousands in interest, and I have enough money for some short-term financial goals. I’ll stick to the plan 🙂

AMDG,
Lisa

[Frugal Fridays] The #1 Personal Finance Rule

Happy Friday everyone!

Today, I want to talk about the most important rule in personal finance.

There are tons of “rules” and methods when it comes to personal finance. In fact, many people continue to disagree on how to treat different aspects of personal finance – student loan debt, credit card debt, mortgage payments, etc. But the one universal rule that every personal finance writer/blogger/enthusiast agrees on is perfectly stated in five little words:

Spend less than you earn.

Common sense, right? It sounds so simple. Yet we, as a nation, are in an incredible amount of debt! In 2010, the total amount of consumer debt in the US was nearly $2.4 trillion (source)!! Why is that?

My theory is that we, as consumers, confuse the idea of available credit with the reality of how much money we actually have. So we spend and spend and spend until we realize that we actually have to pay for all of these things! And if you bought that Prada bag with your credit card, you’re going to be paying even more than the original price!! So, how does one get out of debt and out of this cycle? Follow this rule!

On one Friday of every month, I will be posting several tips on how you can implement this rule into your life.  Now, there are two parts to this rule – 1) spend less and 2) earn more. Not only will I discuss ways to decrease your spending, I will also suggest ways that you can increase your income! This monthly series will be known as Frugal Fridays (I’m hoping to eventually put up a Frugal Friday post once a week, but I’ll start with once a month for now)! Let me know if you guys have any questions or suggestions on topics that I should cover for this series!

AMDG,
Lisa