Saturday, July 19, 2008

My Adult Kid has Huge Debts!

My oldest child is all grown up and just completed his Masters Degree in Computer Engineering and now he is in for the rude awakening so many college graduates face once they are finished with school and sent out to work with all the grown ups. It’s good that he has found a job, even though it isn’t the one he dreamed of or even one he feels was worthy of all the years of education he suffered through. I am sure when he gets his first pay check his attitude will change at least until his student loans are due.

He is starting to feel the real implications of what it means to pay bills and have a huge debt. A mother can only hope that her children don’t make the same mistakes she did and so far it looks good for my adult children except for one area of big concern. Their financial debts are huge and must be paid in order to avoid credit problems in the future.

I have always been a little concerned about the amount of debt my college children were adding to their lives and do hope that their education is something they never feel buyers remorse about.

Buyers remorse is something I learned at their age, except that my regrets were about different kinds of debt. As a young adult starting life in the recession of the early 1980’s I did pretty well with my money until just about the time the economy bounced back. It all started to go down-hill when the Super Stereo Store offered financing to anyone who could show they had a pay check that week! At some horrible rate of interest my only concern was the monthly payment amount.

Over the course of a year I calculated my debts based on the actual monthly payment requirements and ended up with a nearly $10,000 debt for junk that was gone before I even started making payments on the principal loan. Just when I was at the point one blip in my life would cause the whole house of cards to tumble--I hit the blip!

A second baby was due and this time there was no medical insurance. By the time we brought my daughter home from the hospital there was another $12,000 due to cover the costs of her C-section delivery. I was a 22-year old mother of two babies and not much college education--married to a 22 year old father of two babies without much education.

We struggled for a few years and then the car broke down. Our credit was hurt just enough that buying another was not an option so we managed for 9 months without a car. It was miserable I pushed a stroller with my two babies 2 miles to leave them with a babysitter and walked back a mile to work a minimum wage job. Eventually, we were able to buy a new car which was really mandatory in order to earn a living and take care of two little children.

After years of rolling the debt around and robbing Peter to pay Paul we decided there was no end in sight and that our debts were not only never going to get paid but, the stress was going to destroy our lives. We made the poor choice to file Chapter 13 Bankruptcy the kind where you still pay your debts but ruin your credit anyway!

It didn’t help our problems as life just kept moving on and we had bills to pay and children to raise. We filed chapter 13 in 1988 and didn’t finish our payments until 1992. A full 10-years of adult life and nothing of any real asset to show for it.

Once a person learns how to run from bill collectors it can be a hard habit to break so our financial behaviors didn’t actually improve as a result of taking the so-called easy way out. We had just become skilled message takers when bill collectors called. I knew when the Bankruptcy was settled that We Needed to make some changes.

It was difficult and took great effort to learn to live within our means. Thankfully, life had also given us some experience that merited more then minimum wage but, making money was only a little part of being financially secure. We needed to learn how to spend our money and budget.

We ended up getting support from the local credit union. They offered consumer counseling and helped us develop a plan where our only payments were a weekly deposit of a specific amount that was needed to cover our bills. It was the thing that changed our lives and within a few short months we were on track… Two years later we qualified to purchase a home… Which I ended up getting in the divorce!

Today, I don’t have financial problems and I know how to use my money. I still own that house and rent it to other young families--some pay rent on time and some have been deadbeats or people like I was once way back when!

I have some huge remorse over the day I financed the cool 100-wat Stereo system with the big speakers… If I could rewind time or there had been computers back then I might have found help sooner! Today there are solutions that I was not aware of back then…

For_opportunities One Internet site I sent my adult son to visit offers several services for Debt help Including Debt consolidation and Debt relief advice and service. My son may not be able to avoid paying back the loans he took for his education, but he may be able to avoid making his life more miserable with his pocket filled with credit cards.

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