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A Graduate's Critical Decision Point

  • Mary Hunt Debt-Proof Daily
  • 2010 9 Jul
A Graduate's Critical Decision Point

It wasn't our fault that a drunk driver plowed into our parked car in the middle of the night while we were on vacation more than 500 miles from home. No one was hurt; it could have been worse. Our loss was insured and we got just enough money to pay off the loan. We needed to replace that car anyway.

To buy a new car would have required borrowing the down payment and taking on bigger monthly payments. We could have financed a used car with lower payments, but that was beneath what we thought we deserved. Another option was to lease a new car with nothing down and end up with lower payments than we'd been making.

At this critical decision point in our lives, my husband and I blew it. We made the worst choice possible: to lease a new car. It was a decision that turned into a financial nightmare.

Our first leased car lost its value terribly, so we owed a lot when the lease was up. Again, we had no available cash, so rolling the shortfall into another lease was easy. We repeated this many times, and even upped the ante by leasing two new cars at a time. It became nearly impossible to break this cycle that went on for 22 years.

Looking back, it's easy to see the error of our ways. However, I believe that even in my financially stupid years, if I'd taken five minutes to visualize the choice we were about to make in light of the future, I would have at least hesitated. I want to believe we would have made a different choice.

Recently, college seniors graduated, started new jobs, moved into new apartments and are facing a world of new financial obligations. Many of them already carry a load of debt. To those who are in debt up to their eyeballs, as well as those who've come through unscathed, I offer this unsolicited advice:

The decisions you make in the next weeks and months will impact your life in a profound way for years to come.

If you decide to stretch out your student loan payments, take on car payments, extravagant rent, a fancy wedding, new clothes, time off, trips abroad and all the other things you believe you deserve, prepare to take a financial plunge from which it will be difficult to recover. You will open the door to awful things like depression, divorce and bankruptcy.

The other option is to jump onto an upward course by choosing frugality. Even with student debt, if you choose to avoid new debt and to live below your means so you can repay your debt quickly, you will be on your way to financial freedom. Once debt-free, you'll be ready to soar.

You've reached a critical decision point. There's no turning back now. Your choices are clear. It's either up or down. Choose well.

July 9, 2010

©Copyright 2010 Mary Hunt. Everyday Cheapskate is a Registered Trademark

Check out Mary's recently released revised and expanded edition of The Financially Confident Woman (DPL Press, 2008).

Debt-Proof Living was founded in 1992 by Mary Hunt. What began as a newsletter to encourage and empower people to break free from the bondage of consumer debt has grown into a huge community of ordinary people who have achieved remarkable success in their quest to effectively manage their money and stay out of debt. Today, "Debt-Proof Living" is read by close to 100,000 cheapskates.  Click here to subscribe. Also, you can receive Mary's free daily e-mail "Everyday Cheapskate" by signing up at