Debt to Dreams

As part of my quarterly financial roundup and the continuous quality improvement(CQI) project that is my life, I spent my day off last weekend going through my filing cabinet. I was looking in my various folders for lost pieces of obscure information(what was my last Heb B titer?) and trying to squeeze some more space from our studio. I was throwing out now useless pieces of paper I had saved and I looked at the balances on my old credit card statements. Wow, after looking at those statements from 2001 to present, I know why I spent the past 5 years in credit card debt. I was spending money I didn’t have! My average monthly expenses were higher than my current levels of expenses and I didn’t even have a job!

That started me thinking; How much can we expect a person to change their financial habits over time? Am I headed in the right direction? Since I did not come from a rich family do they know something I don’t? I assume that this is a natural progression of financial awareness that most individuals go through.

Here are some of the “Phases” that I have seen in the development of my financial habits since college:

• Phase 1 was my underappreciation of the true cost of long term debt. When I was applying for medical school, I didn’t apply for various scholarships and grants because they were only worth $2000. When faced with the prospect of a six figure education bill I took the “another couple thousand won’t make a difference” approach. I maxed out every loan available to me because it was “free money” that I wouldn’t need to pay back for years.
• Phase 2 was the start of my gross negligence of daily living expenses. This quickly led to my entry into the world of credit card debt. I spent freely on gym memberships, groceries, entertainment, etc..because it was “free” money that I hadn’t earned. Only 2 years before I was working as an RA and counting every penny to get through undergrad debt free.
• Phase 3 was when the loan checks stopped coming and I realized that I was WAY IN DEBT. I noticed that it was costing me money each month that I could be spending on better things and that if I didn’t change my habits, it was going to only get worse.

Luckily for me, I went though all this in a matter of 5 years. I know many others who continue to idle in Phase 2 and haven’t yet realized the trouble they are in. I believe that people can change their habits and 2 large factors in this change are acceptance and education. I won’t go into the acceptance part except to say that, until you accept you have a problem, you cannot begin to fix it.

By following people facing the very same problems and watching them successfully getting out of debt I educated myself on what was working for others. I became a thief of their ideas. I would try different methods and suggestions for getting organized, tracking my expenses and cutting my spending. With this approach I have been able to see some short term results and I am very optimistic about the long term.

I find financial management similar to residency. The days are long, months fly by and you lose track of the years.

This entry was posted on Thursday, June 28th, 2007 at 8:02 pm and is filed under Educational Debt. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.