I listened to a story on NPR’s All Things Considered on the drive home Tuesday about the rising cost of Medical School.  The first person they talked to was horrified that her daughter would be paying 8.5% interest on her federally backed student loan and wanted the government to cut that rate in half to match the interest rate they just received on their refinanced mortgage.  They said she was going to have to borrow a total of $300,000 (the entire cost of her education.)

For some reason, this grabbed me in a similar way to the story last year about the health care executive (not a CEO or President, just an executive) who had paid $18 million for the largest yacht ever built, but it was sitting half completed at a bankrupt shipyard.  I had a hard time feeling any empathy.

Yes, she is going to be saddled with that debt for a long time.  Yes, the interest rate is higher than that for a mortgage, but with a mortgage, you have collateral.  What are you going to put up to back a student loan?  And while $300,000 is a lot of money, how much is the house she is going to buy to live in, as a doctor, going to cost?  It seems a matter of scale, a scale that most people in middle America are not going to deal with and maybe since I don’t have any sort of connection, I can’t relate to her situation.

If you don’t want to pay interest on that amount, there are several things you can do, like, say, not borrow.  Plus, she will not have to pay more than 15% of her income towards the loan, and there is talk of lowering that down to 10%.  I think she is going to survive.

NPR — Cost Of Medical School Rises In Recession

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Uncategorized education, money, npr, recession, student loan

Get Rich Slowly Has a post containing an old Coronet Instructional Films movie about your thrift habits and saving money.  It’s an excellent video.  I know most people watch these movies now for a good laugh, but I always enjoy them, irony free.  Ignore the cheesiness and pay attention to the content of them, and you will learn.

The part I most enjoyed were the graphs the boys made to track their progress compared to their plan.  I find that the act of writing something down by hand really helps to cement it into my mind, even if I never go back and look at it again.  My hand drawn graph isn’t nearly as nice as those in the film, but I don’t have an art department, either.

The rest of the tips in the film are great, too, about delaying gratification, buying quality, and perseverance.  I strongly suggest you go watch it, and read the post: Your Thrift Habits: Money Tips from 1948 ∞ Get Rich Slowly.

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Uncategorized graphs, instructional films, money, perseverance, saving money

National Average 2007

MSN Money had an article yesterday on how to save $10,000 in 2009.  The article didn’t interest me much (the suggestions are either impractical for us, or we’ve already done them,) but the pie chart of the average spending by familes in 2007 caught my eye.  I decided to make my own pie chart for last years spending and to compare them:

What we earn

• We fall more or less into the Average pretax income.
• Our household size is 5, double the national average.
• We own three cars, though only drive two currently.

What we spend on

Our spending for 2008

• Food at home surprised me:  I figured it would be almost double the average, but we spend almost three times the average!
• Dining out: We were close to the national average, which I guess is ok with double the household members.
• Housing: We are about 75% of the national average, but our housing prices are low in this area, and we bought a fixer upper.
• Transportation: Our costs are about 25% more than the average, but I think I can explain that:  we bought two used cars this past year, and the skyrocketing fuel prices this past year (compared to 2007.)  I also commute 120 miles a day, but this is still cheaper than if we moved closer to my job.
• Health:  We must be pretty healthy, because we don’t spend half the average.
• Entertainment: I wasn’t sure what all to throw in here, so I used our actual entertainment spending (not quite $600) and things like satellite TV, which brought it up close to the average.
• Insurance/Pensions:  we were about 50%, but we are not currently contributing to my 401K until we get out of debt, though a small amount goes into a pension fund for my wife.
• Other: I sort of swagged this one and came up with an number about the average.  Their amounts don’t add up to the total income, and I really didn’t know what to add in here.

So I guess, on the average, we are average, with the exception of our food costs.  Some of it can be attributed to rising costs, but it still seems high.  I’m hoping we can cut back on this by growing more things in our garden this year, and dieting (so I can lose the twenty pounds I resolved in 2009.)  We already buy most of our groceries at Aldi, and don’t buy a lot of pre-packaged foods, so I’m wondering where else we can cut.

How does your spending stack up to the national average?

How to save $10,000 in 2009 – MSN Money.

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Uncategorized chart, food costs, money, spending