this post was submitted on 10 Oct 2024
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I read that half of Americans couldn’t cover an unexpected $1,000 expense. This sounds crazy to me. I understand that poverty exists, but the idea that an adult with a job doesn’t even have that amount saved up seems really strange.

What’s your relationship or philosophy with money? What do you credit for your financial success, or alternatively, what do you blame for your failures?

For the extra brave ones: how much savings do you have, and what are you planning to do with them?

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[–] dingus@lemmy.world 2 points 2 months ago (1 children)

The but about higher income making it easier to have mistakes is a big one.

I have a friend online who wants to make money, but doesn't seem to have the ability to do so without going back to school. Going back to school would incur student loan debt, so they do not wish to do so.

I have a crazy amount of student loan debt, maybe $150k. But people don't understand that federal student loan debt is absolutely nothing like credit card debt. There are basically no downsides to it besides paying another monthly bill (that you can use an income based repayment plan for).

People don't understand how incredibly useful excess income is even if it ends up with a lot of loan debt. I had a similar hesitancy back before I went back to school, but I don't regret it at all. I think I ended up like tripling my income.

Even if you end up with a lot of loans, making say $80k/yr is astronomically easier to survive on than $40k/yr for example. You have to think that something like rent or food prices are going to be somewhat similar in your area no matter how much you make. Sure, you could choose to live in a lavish place I suppose, but if you live reasonably then it's more than worth it.

As an example, the average rent price for a not shitty one bedroom apartment in my area is maybe around $1.6k, which would equate to $19.2k/yr. That's almost 50% of the gross income of the person making $40k/yr while only around 25% of the person making $80k/yr. So even if the person making $80k/yr has a $1k/mo student loan bill (you can get it cheaper if you wish), the difference is dramatic.

The person making $40k/yr will have a little over $20k left over at the end of the year for remaining expenses and savings, but the person making $80k/yr will have more than double that at $48k left over. Obviously there are a lot of nuances in this but still.

So it's absolutely worth it to incur federal student loan debt if it means you will make a lot more more money. Private loan debt is a bit different.

[–] exasperation@lemm.ee 1 points 2 months ago

Yeah, I'm not going to pretend like I'm good with money. I'm not. I have a decade of experience of being a young adult on a tight budget to know that's not one of my strengths. I wasn't great at stretching each dollar to its most efficient use. And I still am not.

I won't speak on whether student loans are worth it. I think, like everything, it depends. I think a bachelor's degree is definitely worth the cost (both in tuition and time), but it might still be worth doing it cheaper if there's a cheaper path available.