Tag Archives: debt

Inheritance Allowances

According to reports, retirees are distributing (what would have been) inheritance to their children while they are still very much alive. This is not a new phenomenon; it is just going by an awkward and clumsy new name. “Early distribution of inheritance” is also known as supporting your adult children. The reasons for the life support are somewhat varied. There are adult children who come upon unavoidable and devastating life experiences, and need a hand. Thank goodness for family. But the stories that seem to bubble up, and are told rather defensively, seem to be of a different ilk.

Married retirees speak of their adult children “needing” health insurance and suggesting that it would be tantamount to eating one’s young to have these grown-ups go uninsured. Spend your money on whatever you’d like Mr. & Mrs. Retiree, but no one ‘needs’ health insurance (yet.) What your elderly children need is healthcare. Purchase hospitalization or cataclysmic insurance if you must. But they can go to doctors and pharmacists on their own. If they can’t afford those bills, chances are that they (or at least their children) qualify for assistance. Don’t confuse what your children “need” with what you or they may “want”. If you do that you might end up paying off your elderly child’s six-figure student loan debt.

Yes much of higher education is ridiculously expensive. But so are sports cars, and sable coats. Before buying sable most people would have to do a little R.O.I. exercise. “Will I miss the money that I would spend on this coat?” “Do I have a life which will enable me to get use out of this coat?” It’s pretty much a given that this exercise does not include “How high is the credit limit on all my cards?” If you can’t afford it, you don’t buy it. If you live in a warm climate, or have a casual way of life, you don’t buy it. For many people, attending any kind of institution of higher education will demand incurring debt. But it never should be more than the projected career can support. The high school teacher with $100,000 in debt either had very poor advice or experienced some sort of catastrophic event. Four years of a private liberal arts education is a luxury few can afford. Two years at a community college followed by two years in an accredited college/university can be made affordable by most. Savings, grants, awards, and work-study (students do better academically when they have a job) can make a serious dent in what needs to be borrowed. For the graduate who wants to teach; you might want to look into public school systems that pay for your master’s degree.

Of course not all baby boomers are supporting their adult children with large chunks of change. Some choose a more homey approach, and modify their existing dwelling, or move to a larger abode to accommodate elderly children and their families. Many extol the old-fashioned virtues of multi-generational living. But often there is something a little less sweet simmering beneath the Norman Rockwell imagery. The retiree might not have pictured a lifetime of parenting of a seemingly developmentally typical son/daughter. The retiree might have niggling thoughts of how they might have contributed to this situation. One thing is pretty certain; these ‘kids’ are not worried about an inheritance. For an adult living with his parents, time has pretty much grinded to a halt. The relationship dynamic has not shifted yet. The two-way street of adult child/parent relations has not been paved. No one is getting older and no one is ever going to die. Chances are they’ve never even heard of Sugar Mountain.

Leave a comment

Posted by on September 22, 2012 in Cultural Critique, Education


Tags: , , , , , , , , , ,

May Old Acquaintance Be Forgot

The eye of the holiday hurricane has almost passed and the residual New Year storm is right behind. New Year’s Eve, a holiday only second to Valentine’s Day for its ability to make people feel badly. Even if you choose to eschew the societal pressure to have the best night ever!, you may very well still succumb to the resolutions.

I am all for self-improvement and living with intention, but I am baffled by the resolutions. The fact that that may be made while drunk doesn’t disturb me. Some of my best moments of resolve have come when having gone just a bit too far. No, what bothers me is the time of year of this universal resolving. Come January 1st, we enter into the longest, darkest, bleakest stretch of the calendar. Not counting Valentine’s Day (see above) we get no break in the mundanity until spring (birthdays of political leaders notwithstanding.) An informal survey indicates that the majority of resolutions involve physical improvement. Yet our bodies and minds cry out for carbohydrates and alcohol this time of year. Layering of clothes offer no incentive to tone, and darkness does not invite activity. Our relationships with our screens becomes borderline obsessive (there is a reason television programming peaks during the colder months.)

Come mid-January, the bills and regrets start to appear. A fiscal resolution would be appropriate this time of year. And fear not, six weeks along, when resolve tends to lag; it’s tax season! Your accountant can take on the cheering role of a personal trainer. But short of resolving to not spend more than I have or to increase savings, I shy from New Year’s resolutions.

I tried it once. In my twenties I resolved to not have any regrets. Ah, youth. How charming, how utterly near-sighted and self-involved. Sweet. With the determination of a four-star general, I went forth and conquered.  Regrets? No. Creating a version of my best self? Not exactly. But what a great learning opportunity. I discovered that New Year’s resolutions were not entirely for me. I also discovered that behavior change works best (for me) when aimed outward. Resolving to; experience more generosity of spirit, seek out those who need a kind word or smile, offer help to strangers, all help to create a personal world in which I’d like to live. The very fact that I engage in this resolution year after year after year, does nothing to support the efficacy of resolutions. But just like physical fitness, spiritual fitness does have muscle memory.

As I struggle to stay awake on my couch, nursing a glass of bubbly, I will wish to you kindness. May you experience kindness towards yourself (eat the chocolate!) and kindness towards others this new year.

Happy New Year

Leave a comment

Posted by on December 14, 2011 in Cultural Critique, Holiday


Tags: , , , , , , , , ,

Educated Consumers

The White House announced a new program (last year) to ease student debt.  The plan (to start in 2012) would allow graduates to pay 10% of their discretionary income for 20 years.  Any remaining student debt would be “forgiven.”

The amount and proliferation of student debt has grown to ridiculous proportion.  But why in the world should we address this after the fact?  Why are students incurring debt that might have to be forgiven in 20 years?  Either they accrued too much debt, or they accrued too much debt for their chosen profession.  I suggest educating the consumer is a much more effective solution than debt forgiveness.  Like the mortgage crisis, many are buying a product incompatible with their means and needs.

Imagine how easy it is to get caught up in the college selection frenzy at 16 or 17.  It is often also difficult for adolescents to consider shades of gray in decision making.  There will always be more than one way for them to accomplish their educational goals.  If I may, I’d like to offer a little food for thought:

  • Transfer, transfer, transfer.  Two years in a community college (particularly one with a reciprocal agreement with a prestigious university in the area) will save almost 50% in costs.  The degree from the 4 year school (attended for the last 2 years of study) will be exactly the same as the one given to 4 year students.
  • Stick to your own kind.  Do not attend state schools in other states.  State colleges and universities can be wonderful.  They can also be as expensive as a private school for out of state residents.
  • Live at home.  I’m not interested in hearing about the missed social experiences of dormitory life.  That’s not the goal of education.  If money is an issue, would you rather the person living in their childhood room, a college student or a 30 year old trying to pay off a student loan?
  • Consider your major.  I know it’s hard to think ahead as a teenager.  But teens can be savvy consumers.  What kind of degree is worth the associated cost?  A B.F.A. for a total of $40K might be a better choice (for some) than a B.F.A. for $200K.  Better yet, a B.A. for $40K with an Arts major, may be the best investment.
  • Know what you’re buying.  Does the college/university have a robust alumni network or career services?  How is their reputation in your chosen major?  What leadership or research opportunities are available at the school?

Forgiving debt is not sustainable and does nothing to ensure that people are getting the best education they can afford.  The skyrocketing cost of higher education aside, student debt exists in the same realm as consumer or housing debt.  I’m not suggesting a cash only society, but debt should always be incurred thoughtfully and judiciously.  During a time of economic uncertainty and high unemployment, when the next generation is not guaranteed a better standard of living than the one before them, attention must be paid.

Leave a comment

Posted by on October 26, 2011 in Education


Tags: , , , , , , , ,