For the past month I have been receiving message after message and call after call from over one hundred high school seniors or parents of high school seniors. They usually come across my profile online and reach out for advice. The question is the same. How do I find money for college? I am glad that they reach out because I believe in better late than never. Hopefully they are able to get some money before August or at least build a habit where they search for free money while they attend college. As high school comes to an end for these students in the next few weeks their inquiry has me worried.
Where was this curiosity for free money over the past eighteen years? Scholarships are not a new concept and have been around a long time. I understand that parents may not know that a child as young as five years old can compete for a $30,000 google college scholarship, but once a child gets into the ninth grade there are thousands of scholarships up for grabs.
This is not going to be about how all of us need to save more for college this is about something more serious. Something that starts as not having enough money for college, but ends with not having enough throughout your life as an adult. Many of the high school students that I talked to over the past month think student loans are monopoly money. They believe that money will just appear out the sky when it is time to pay the debt back. I can't blame them because they are seventeen and eighteen year olds that have been on someone else's payroll for their entire life.
Where the danger comes in is when that "monopoly" mentality carries on into adulthood. So many of us are just like these high school seniors when it comes to debt and the money to pay it back. Think about all the major purchases that we have made in life. When we go to the car dealership we never ask how much is the total price of the car, we ask what will be our payments. We don't negotiate the price of the car down, but instead negotiate the payment amount down like that is going to make a difference in the total amount we pay.
When we go looking for a house to buy we will look at the total price, but only in a range. Most people know if they can afford a $500,000 house or not so if they know they can't afford it they won't even ask about it. Where we get in trouble is when we are looking at a certain price range of houses. In the price range trap we only ask what mortgage payment can I afford. As adults we are the kings and queens of monopoly money! We sign a mortgage based on future earnings. We say to ourselves "this house is about $100-$200 out of my price range, but I plan to get a raise in about eight months after my annual review. I just need to make it the next eight months."
We do the same thing with cars, furniture, timeshares,etc. We always count on money that is not there yet. We count on monopoly money! What we don't count on when we are just asking about payments we can afford is the higher car insurance and taxes that will come with the new car. We don't factor in the higher utility bill that comes with our square feet. We didn't think about that it would cost a lot more to heat the 2800 sqft house than it did our 700 sqft apartment. What are these property taxes and why are they so much?
"I didn't know that interest would be added to the furniture I bought after the promotional period ended! Where am I going to get any of this money? I didn't calculate the "what ifs!" "I didn't know that job I was suppose to get the pay raise at in eight months would lay me off in six!" "I didn't know that I would have to pay out of pocket when my water heater broke!" In adulthood we quickly begin to realize that Rich Uncle Pennybags or Mr. Monopoly is not coming to our rescue and the result is that we go into deeper debt.
The difference between high school seniors and adults out on their own is that student loan debt does not have to be thought about for four years and they can't repossess your degree. They can however repossess your car, your house, your furniture, your everything! Many adults who are looking for monopoly money today used to be high school seniors who thought tens of thousands of dollars in student loans would magically disappear into thin air after graduation. It is time to break that cycle today and tell the high school students in your life that monopoly money only works in a board game and not in life!
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