Penny Took Out Too Many Loans
Episode 4: Penny Took Out Too Many Loans
Pete and Alex talk to IUPUI student Penny, who has extra money sitting in a bank account from student loans she took out. What should she do with that money?
We are a financial education program. We exist to help college students make good financial decisions that will hopefully allow them to live happy lives that aren’t influenced by excessive levels of debt. We aren’t debt averse – because we know the value of student loans if used correctly – but we want students to be conscious of their levels of debt so that they can avoid a debilitating situation.
With all of that said, part of Penny’s conversation made us stop and think about her desire to want to live on campus – rather than at home – beginning her 2nd year of school because she felt it was an important part of college, despite the fact that it was going to cost more money.
As a financial education program that’s part of an academic institution, you would think our advice would be the academic one: save some money, live at home, and it’ll pay off in the long run. But finances are tricky because you are spending money to purchase something you deem to be worthwhile. And in this case, Penny felt that a “truer-to-her” college experience is absolutely worth it.
While you may not feel the same way as Penny about the need to live on campus, it’s important to remember that we all have our own “living on campus” situations. It could be that you would like to take a trip after you graduate to celebrate; maybe it’s that you enjoy Crossfit and the community that you’ve gained from it; maybe you find relaxation in watching all 162 games of your favorite baseball team and you need buy the subscription. Whatever it is, we all have something that we spend money on to make our lives a bit better and provide us with satisfaction. Even though these decisions aren’t necessarily the most fiscally responsible, it’s important to remember to put some money aside to help fund something that makes you happy.
As for your college experience, the factors that go into that – living arrangements included – are no different. We know that the things that are important or worthwhile to you, especially as they relate to you gaining all you can from your time as a student, are that way for a reason. It wouldn’t make sense for us to discourage you from cutting out all of those things at the expense of your own enjoyment or wellness. So, we won’t. We’ll just say… live MoneySmart but live well.