Tag Archives: student loan debt

A Family With 13 Kids AND Saving 35%

Rob and Sam Fatzinger have 13 kids, one income, and a free and clear home just outside of Washington, DC. If you want their full story, just go to the Washington Post and type in their name.

Here’s their story in short: Rob made $40,000 a year just a decade ago, but now earns $100,000, plus, and mows lawns in the neighbourhood for a few extra bucks a month. His stay-at-home wife home schools their 13 children with assistance from a tutor. In 2000, they bought a fixer-upper foreclosure with $50,000 down and paid off their 15-year mortgage early, and Rob will retire early at age 62.

They had a lot of help from the community in renovating and expanding the home. The Fatzinger’s also receive a lot of support, where friends and neighbours have helped with gift cards for food, and even used vehicles over the years. Their biggest cost is their food budget that was running $1,600 a month. Today, their savings rate is 35%.

All kids have long ago been educated to know they will not receive help with college costs. Yet, several of them have already graduated from college with part time jobs, scholarships, and ZERO student loans!

But that’s not the story. If you’re really quiet, you can hear what most listeners are thinking right now: That none of that could ever happen in their life:

Judgment and strike 1: I couldn’t buy a place for $150,000

Strike 2: I could never take on a part time job

Strike 3: I wouldn’t accept donations from people or ask for help

Strike 4: I could never do a 15-year mortgage or pay extra on it

Strike 5: I can’t save 5% of my pay, never mind 35%

Strike 6: He makes $100,000 –I don’t…

Strike 7: I couldn’t tell my kids I won’t contribute to their university costs

Strike 8: I’d never be able to retire early

Your attitude determines your altitude. Instead of the judgments and saying “I couldn’t do that” change the wording to: I’m not prepared to do that. Then at least you’re being honest with yourself. Because, people who say it can’t be done should stay out of the way of those who are doing it!

College and University Grads: Hold Off Spending For One More Year

Student loan debt in Canada is over $14 billion. It grows at over $1.2 million a day and adds 360,000 students a year, and tons of that $14 billion is saddled on people who are graduating this year.

College and University students should be well familiar with the phrases ‘short term pain for long term gain,’ and the concept of delayed gratification.

That’s because they usually don’t have much of a life, and certainly not a lot of money. They were just smart enough to get a degree and live like a poor student, for the benefit of a better income, with more education, down the road.

The downside is that some of the most broke people are those aged 25-35. That delayed gratification all ends, for most of them, with their first paycheque after graduation.

Usually, however, that poor student life tends to end immediately when they start getting a paycheque and spend like crazy – because they now have some actual disposable income. In fact, THE most broke grads, for the next decade, are lawyers, doctors, and pharmacists. Their income is generally significantly above average and they spend way beyond that.

But delay the big spending spree of the cool plasma TV, the new car, a ton of clothes, and the good furniture for a year. If you can live like a poor student, and keep that mindset for one more year, you’d be amazed what happens.

If you spend like you did in school for one more year after graduation, you’ll clear up at least half of your student loans. If you didn’t have any, you’ll have a savings fund of $10,000 to $15,000 in just one year. For anyone with student loans, they’re not something you really want to have around for the next two decades. It’s pretty depressing to have to send that payment each month, year after year after year. Get on with it and get it over with. 10-year old pizza isn’t very attractive. Neither is a 10-year old debt.

It’s a life-changing decision you can only make once: Take on rent, car payments, a bigger credit card balance, the usual work-related expenses, AND the hangover of the student loans, or press the spending pause button for a year. If you choose the former, ask some grads from the last few years what financial stress is like. If they’re honest with you, it’s not a place you want to be for the next decade or longer. But it’s always a choice.

Ease yourself into the world of big-time spending. It’s not your job to turn the economy around in the next few months. If you delay that need to spend like crazy for another year, it’ll be so worth it. If you don’t, I guarantee that years from now, you’ll tell your kids to do exactly what I’m suggesting to you right now.