Financial Visions

Benjamin M. Tubert, Pharm.D Class of 2014
April 2, 2012
Filed under Opinions&Reviews

If you are anything like me, you probably come from a family that had to utilize loan options instead of savings accounts for tuition money. If I had decided to not go to a professional institution for a career that would reward me with substantial wealth at the close, I would have most likely gone to a SUNY school or my beloved, Utica College. That is just a realistic observation given our economy and the cost of tuition versus starting salary.

However, given that I enrolled here, like many of you, I am neck deep in student loan debt and it’s all tied to me. Mom and Pop are just co-signers who will be released after a certain amount of on-time payments.

Now, if you are nothing like me, you most likely have not looked at your interest statements or are not worried about having debt. Even though student loans are not classified as “bad debt” like credit cards, debt in general is an issue that we as young adults should be concerned with managing. If this is you, I truly hope that after you read this, you consider starting to get a firmer grip on your finances.

Upon graduating, you have six months to enjoy being free from school with no loan payments. However, depending on how long it takes for your license to arrive post-boards, it is realistically only four months of serious “keesh.”  It did not take me long during the stock market crash in October of 2008 to realize the 130k start/10-15k sign on bonus was LONG GONE.

I did not do overwhelmingly fantastic in calculus here, but I’m pretty confident that this is an equation I can handle: tuition inflation = higher loan payments. However, we are not done there; (less job opportunities + decreased salaries + increased living costs) – higher loan payments = 24/25 year old Doctor of Pharmacy still living like an 18 year old college student.

I have made financial mistakes in the past that have impacted how I must live and budget now and post-graduation. Because of student loans, I have had to prioritize and create a serious list of wants versus needs. This has benefited me greatly when I think of going on a spending spree due to the overwhelming feeling that I have to make a monthly payment to a bank.

Are you the kind of person who does not think much of his or her potential payment and wants to purchase a car right out of school? Do you envision yourself in a white on white c-class or maybe one of my all-time favorites, an Audi A4 or A6? It is true that purchasing a flashy car seems awesome at 24 or 25 years old. Given that, I want you to ask this question:  what equity will you have in it after a year? It sure will not help get rid of that overwhelming student loan payment, not to mention your residual value will be horrid once you have traveled less than 1/10^th of a mile off the lot.

A few resources that I recommend looking at are www.mint.com, the “my portfolio” tool if you are a Bank of America customer, or www.greensherpa.com. Also, if you have interest in a blog, I recommend reading Amy Jo Lauber’s personal finance blog (http://amyjolauber.wordpress.com). She gave a presentation at the Mid-Year Regional Meeting for APhA-ASP in October of 2011 and was absolutely fantastic!

That being said, I think all should be aware of where they are in relation to their loan debt. Here are a few tips that I would like to close this with. First, get a grasp on where you are at in your borrowed amounts. This may seem like a huge number when you first make eye-contact with it, but fear not because it is manageable. Second, start looking ahead to prioritize your desires for post-graduation (car, knocking down loan interest, paying off loans sooner than expected, making a down payment for a home). Third, start thinking about how long you want to be tied to a student loan payment.

The majority of plans start out as 10 year repayment plans but you can extend that all the way out to 20-30 years (however, your interest will go through the roof). Do not fear the reaper of student loans, just be conscious of the fact that even though we are going to graduate feeling like we are on top of the world, there is no reason not to be smart for a little while longer before joining the party. With the way the economy is now, managing our loans will be just like managing time between exams.

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