I don’t know if I can precisely describe the feeling when you realize that your child is about to take on an astronomical amount of debt in educational loans. While discussing our options, financial aid, and college costs — I honestly had clips of Apollo 13 running through my head.
Our options are:
- Take on the debt.
- Earn the extra money needed.
- Forget about college altogether.
I will count myself lucky if this is the biggest financial “disaster” that I have to address in my lifetime.
“Remember: you’re proud, happy, and thrilled.”
Whatever other emotions I feel, don’t let the stress and angst around the debt diminish the fact that I am proud and happy and thrilled. My daughter is entering college knowing what she wants to do. She has chosen a major, and she researched the best place to go that: fulfills her requirements, will help her reach her goals, and feels like the right fit for her. I am proud, happy, and thrilled.
“We have a problem”
When we finally began looking at her institution of choice in concrete numbers, I realized that I had made a foolish assumption that my children’s lives would be easier and more prosperous than mine. And that college price increases would have kept pace with inflation, more or less.
The price of attending a public four-year college rose 54 percent from 1998 to 2008 while the typical American household earned less in 2008 than it did a decade earlier, adjusted for inflation [sources: College Board, Leonhardt]. — Are millennials really the first generation to do worse than their parents?
I’ll dig deeper into this situation in the future, but the end result is that I hadn’t anticipated what a college education would have cost, and I don’t think I could I have saved enough for it if I did.
“I want this mark all the way back to Earth with time to spare.”
I would just like to get my children to graduation, with money to spare. Reducing expenses alone would not enable us to get college educational loans within our budget, so, we improvise. We find ways to make additional money by using the skills and resources that we already possess.
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I have “spare time” (that would otherwise be spent relaxing). I have some resources and skills that are useful. I’ve discovered a variety of ways someone could make an extra $500 to $1000/month; researching opportunities from driving Uber, to selling on Etsy, to raising worms… that’s the beginning of a plan.
“You’re telling me what you need. I’m telling you what we have to work with at this point.”
Having a list of optional side work is a start, but we need to apply that to what we have to work with at this point. This is just a list. It doesn’t mean I’m going to take advantage of everything. For example, it’d be a poor financial decision to raid my retirement to pay for my children’s education: there is no financial aid for retirees.
Our personal skills and resources:
- Three working-age adults
- Retirement savings
- Home equity
- ¾ of an acre of land
- A detached garage
- A good credit score
- Several automobiles
- Some pre-existing websites
- Basic computer skills
- Web development skills
- Art and maker skills
- Illustration and graphic design skills
- Music skills
- Educational skills
- Child care skills
- Sewing skills
- A square CO2 scrubber
Your personal skills and resources may be different, but that’s what we have… It’s quite a lot to work with. Is that everything? What can we do with it? How can we use our resources to bridge that gap? Seriously, if you have any additional ideas or items I should add to the list, I’d like to hear them in the comments.
“Just breathe normally.”
After we’ve gathered everything together — all the information about awards, scholarships, grants, student loans, parental loans, and any additional cold hard cash that we could earn — we need to patch together a working financial plan. Standard personal finance advice applies:
- reduce expenses
- increase income
- avoid debt
- work harder
- watch the budget
- get a plan in place to pull the additional money from somewhere…
- and then just breathe normally.
That last part might be the hardest.
“Failure is not an option.”
After we’ve evaluated our skills and resources against our options, decided which will give the best returns with the least risk, we need to get to work. Eventually the payments will come due, right about the time that our children should be getting settled into their adult life, planning for the rest of their future, and building their nest egg. The bottom line is I don’t want my children to have a monthly student loan payment that consumes about ⅓ or more of their salary in the first years of their post-graduate life. I also don’t want to take on a monthly student loan payment myself. Success will mean having all the loans paid off before they graduate.
We may feel like we’re on the cusp of disaster, but I believe this will be our finest hour.