Life with Loans

To spend or not to spend? That’s a question Erin Monahan asks herself frequently. Since she graduated from the University of Southern Indiana in 2005 owing $31,500 in student loans, most of her day-to-day choices are centered on money. In a three-month journal kept last year, the 24-year-old from Indianapolis shares how she’s moving forward with her debt and dreams in tow.

april 15
I have four jobs. My full-time job is acting at the local children’s museum. This position is 37.5 hours a week, pays $28,000 a year, and includes medical benefits and 25 days of paid time off per year. I earn about $200 a month in my three part-time jobs: event host and planner, public relations specialist, and script writer. How do I prioritize these jobs? Very, very carefully. I fear burn-out, but the extra money is helpful.

april 16
I enrolled in one graduate course, paid by my employer’s education reimbursement program. I can’t justify the cost of grad school on my own while I’m more than $30,000 in debt for undergrad. I’m waiting to see if I can handle this class and my jobs before enrolling for next semester.

april 18
My rent is $375 a month, including utilities, to live in a room with a shared bathroom and kitchen. I plan to move to save money by living in a house with friends. We’ve spent the past few months looking for a place to rent. We found it! Plenty of space, hardwood floors, and near downtown. It’s $1,000 a month for a 13-month lease. I have agreed to pay $280 for a larger room. We’ll split the water, gas, electric, and Internet bills evenly, so my total utility cost should average $75. Fortunately, all of us agree that cable service is a waste of time and money. I’ll save $20 a month.

april 19
My family and friends have plenty of moving boxes for me to use and my father will help me move. To cut down on items to move and save money, I tried to avoid the grocery store last week and eat only what’s left in the pantry of my old place. Why did I buy five cans of tomato soup last fall? Never again.

april 25
All moved in. I made several purchases for the house today. I keep asking myself, Do I buy the cheapest thing, spend the money on what I really want, or get something in between? I can mix and match funky sizes and shapes of silverware from a thrift store for much less than purchasing a new matching set. Thrift store wins.

april 26
My new roommates and I shared dinner costs multiple times this first week. It is a nice feeling! I have been eating healthier. And no more tomato soup.

april 29
Last summer, I bought a used 2002 Toyota Prius with 60,000 miles on it for $11,000, including taxes. My parents agreed to help me with my student loans so I could get a good, reliable car. They pay $215 a month on my college loan that has to be paid back in five years. I pay $75 a month for a college loan that I have 30 years to pay back. Even though my car’s 40 to 45 mpg has saved me gas money, the $210 monthly car payments and maintenance costs are tough. Since someone scraped my back bumper and taillight without leaving insurance information, I continue to weigh the need to have my car fixed. The $500 deductible is hard to get together right now. Is it worth putting it on a credit card and paying interest? My fear of rust from the chipped paint may push me toward the cosmetic repair.

april 30
I just realized how often I use coupons! For grocery purchases, an oil change, online shopping. I debated the value of taking the time to find coupons and better deals vs. spending the extra money to save time. I chose time. The only coupons I use now are printed out with my receipt at the grocery store or from Web sites I quickly check before shopping.

may 3
I bought an awesome mattress. It’s a floor model that cost just $600 instead of the $1,000 regular price. While hundreds of customers probably have laid on it, no one has ever actually slept on it. Thank goodness for inexpensive, washable mattress pads.

may 8
I embrace the power of trade. I carpooled with a co-worker to my parents’ house four hours away. Instead of the $16 I owed for gas, she accepted a bag my mother crocheted using recycled plastic bags.

may 9
If I purchase the greasy pizza slice with my work discount, I pay only $2.49. If I bring the frozen organic meal I bought on sale for $3.50, I spend more money but feel less sluggish. These decisions about what is valuable to me have become more and more difficult. Is pleasing my stomach more important than emptying my bank account? It depends on the day and my mood. Today, pizza won.

may 23
The museum matches up to 12 percent of my contribution to my retirement account. Recently, I started contributing 10 percent of my income to see if I could manage without racking up credit-card debt. So far, success! Today, on my one-year anniversary at work, I received a 3 percent pay raise. I upped my retirement fund contribution to 12 percent and still have a 1 percent
increase in my take-home pay.

may 26
What does refinance mean? When I called my bank to order new free checks, the advisor told me I qualify for auto-loan refinancing. My response was: “What does refinance mean, exactly?” The patient representative explained that when you refinance a loan, the lender takes a look at your credit report and payment history and determines if you are eligible for a lower interest rate. Turns out I am. By having my auto loan lowered a fraction of a point, I will save $849 on the total loan. The rep offered to give me a month off making car payments and to lower my monthly payment by a few bucks. I turned down the offer so that I can pay back my loan a few months earlier than expected. Who knew learning about money could be so rewarding?

june 3
At work, I have been putting $10 per paycheck into a flexible spending account to use for medical purposes. Unfortunately that did not prepare me for a medical scare. I’ll have to visit
the doctor more in the next two months than in the past year. Fortunately, my flex account has enough funding so that I won’t be financially drained. My doctor recommended I cut some stress out of my busy life, so I left my event host job. I’ll lose some monthly income but gain time to get healthy. And time to tell all my friends to be sure to get their yearly check-ups!

june 12
The second Saturday of every month, my roommates and I host a music and art show. We invite visual artists to display their work and musicians to perform. We buy the ice, snacks, paper plates, and plastic cups. We ask guests to bring their own beverages and to donate money to pay the musicians. Not bad. I spent just $20 for an evening of live music, art, drinks, and good company in my own home.

june 20
My bank notified me that it was upping my credit card limit by $4,500. The letter also included
a set of convenience checks. I took advantage of the offer to pay the $500 deductible on my car repair.

june 24
I received a special life insurance offer from USAA: I can pay $5 a month for $50,000 worth of coverage, without medical screening. I qualified simply based on my age and membership. It is tough at the age of 24 to be talking about my possible death, but I feel better knowing that the policy will pay off my debt and won’t burden anyone.

july 3
One of my part-time jobs offered me the opportunity to attend the Urban Music Awards in New York City. I’ll pay $120 toward gas and limo rental. Since I’m staying with a co-worker’s father in New Jersey, I’ll get free lodging. Good thing, since I had to splurge on a $30 pair of heels to go with the formal dress that I purchased on eBay several months ago. Although this event is not something I budgeted for, I believe the experience will be worth it.

july 9
I spent $19.99 on a pair of jeans on clearance. This was an emergency purchase after my favorite pair of jeans busted a button. I’ve avoided buying new clothes lately. My rule is that I have to donate as many things as I buy. I haven’t had the heart to get rid of much lately or the extra money to buy more.

july 11
Because of a schedule change, I have time to date again. Since money’s tight for both of us, we’ve found creative ways to share expenses. I pay for dinner, he gets the movie. He pays tonight, I pay next week. We cook dinner at home and rent a movie from the library, or go for a long walk downtown. Life on a budget isn’t so bad.

Last note
Journaling my spending decisions for three months taught me a lot about my finances. My biggest burdens are my student loans and saving for retirement. The past and the future are costing me a lot in the present. The cushion of my credit card is used more often than I would like, and my savings seem to disappear as soon as I scrape some together. But as a single person recently graduated and working in the arts, I’d say I’m doing pretty well.