Sallie Mae and I Shack Up

If you’ve ever listened to Dave Ramsey talk about student loan debt, he likes to you to imagine it as Sallie Mae shacking up with you and living in your guest room.  He’s not far off.

Sallie and I Move In

Shortly before graduating pharmacy school, everyone in my class had to sit through a lecture on student loan repayment where they gave you a letter stating how much you owed.  That was a fun hour.  While not the worst in my class (I heard a guy put all of his expenses including a new truck on loans), I had taken out $136,885 in my 6 years there.

But, that wasn’t my balance.  While I didn’t have to make payments at school, some of those loans were still accruing interest that I was responsible for.  So through the magic of compound interest, Sallie Mae got to tack on another $15,000 or so on bringing my total balance just north of $151,000.

Total monthly payments: $1499.19

That’s a mortgage on a house.

Without actually having a house.

Oh and this was a pretty standard payoff schedule.  The federal loans were set to payoff in 10 years but the private ones were set for 15.  And those 15 year loans, they had a variable interest rate which had nowhere to go but up.

Still, I didn’t really think all that much of it at the time.  That big student loan payment was just the cost of doing business for the degree I got.  And besides, I could afford it right?

So Sallie moved in.

The Spender Meets the Saver

Fast forward to 2013.

I had bills and I paid them.  I even took out a universal life policy to protect my parents from my student loans in case something happened to me (more on that later).  In short, I felt like I was a responsible adult.

But that was pretty far from the truth.  A big paycheck and a credit card can be a dangerous combination.

$1,000 on a 3D TV?  Sweet!  Charge it!

$3,500 worth of new furniture for the apartment?  That leather couch will really tie the room together.  Charge it!

$5,000 worth of craft beer in a year?  Cellar won’t stock itself!  Charge it!

$32,000 on a new car and put the down payment on a credit card I still owed a balance on?  Meh, why not?  Charge it!

What does a couple thousand dollars worth of beer look like?

Yeah, those were some expensive years.  But still, I was a good roommate for Sallie.  I dutifully paid her tribute and in return, she tolerated my existence.

Then I met Alex and everything changed.

It didn’t take long for us to really hit it off and for me to realize that this was a woman who I really wanted to spend the rest of my life with.  Being with her showed me a happiness I’d never known.  But, as time went on and we started getting more serious with our relationship, I needed to face facts about my finances.  They were a wreck.

Telling her about the amount of student debt I brought to the table was sobering.  Never mind the fact that I had credit card debt as well, the fact that I had 6 figures worth of baggage there alone was enough to make her uneasy.

You see, she’s a saver.  Where I would find ways to spend every cent I made, she made it a point to build up a war chest worth of savings for whatever life threw at her.  And this whole notion of me bringing all mortgage and no house to the table, wasn’t going to fly.

In short, if I wanted a future with her, I needed to get it together.

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