You Owe Me

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                                                       “When offers come in the mail for credit cards, rip them up!” —Susan Bushey ’96



     You Owe Me
                                                       B y M a r y a n n Te a l e S n e l l ’ 8 6
                                                       Does your student-loan balance exceed your annual salary? Have you
                                                       whipped out the platinum-plus card to make ends meet? Are you a pro at
                                                                                                                                         Pau l S c h n a i t tac h e r




                                                       “switcharoo”—transferring high-APR credit-card balances to cards with
                                                       lower ones? Do you hover by the mailbox each spring, awaiting a tax refund
                                                       that you will nobly forward to a creditor? In short: Do you owe, big-time?
                                                       If you’re up to your chin in debt, you can at least take solace in knowing
                                                       you’re in good company. According to Consumer Credit Counseling
                                                       Services, the average American owes $8,600 in credit-card debt; and the
                                                       Department of Education reports that the average college student owes


78    w w w. a l u m n a e . m t h o lyo k e . e d u
nearly $20,000 upon graduation. But           didn’t have a “practical understanding
those are just averages. For many of          of what it would be like to manage my               How to Be a
us, the picture is considerably bleaker.      money, to manage debt”—which in her                 Cheapskate and
And there’s a certain stigma attached
to having personal debt, which can
                                              case now includes credit-card balances.
                                              If she’d had better “financial literacy
                                                                                                  Still Keep Smiling
make it uncomfortable to talk—or even         skills,” Robbins says, her situation might
think—about. But even if you’re in            not have felt so overwhelming.                      If you’re cash-poor and tempted
deep—however you got there—you can                                                                to use your credit card, consider
                                                                                                  these tips from Lori Macellaro
still get out, as some Mount Holyoke
alums are proving.
                                                  “A house, a car, and                            Kelman ’82, who considers herself
                                                  school are all worth                            something of a cheapskate who
                                                                                                  still knows how to have fun:
In the Red—From Debt                               going into debt for.
                                                                                                  • Cook at home, eat at home.
and Embarrassment                                  But you have to be                               Make your own coffee, bring
Mary Smith ’04 (not her real name)                able to pay them off.                             your own lunch. This can save
is $55,000 in debt, with $12,000 on
credit cards, $18,000 on a car loan, and
                                                     That’s the key.”                               you hundreds, even thousands, of
                                                                                                    dollars a year.
$25,000 still to pay on student loans. “I                Susan Bushey ’96
definitely feel in over my head,” she says.
After graduation, Smith went to England,
where she earned a master’s degree—           That’s not an uncommon sentiment. As
funded mainly through student loans           Consumer Credit Counseling Services
and credit cards. Now back in the United      points out, “Generally speaking, we
States, she admits she sprung for a new       are not taught in school how to handle
vehicle rather than buying a cheaper used     budgeting and credit issues. For the
one and is “addicted to traveling,” which     most part, we have had to learn about               • Find cheap ways to keep culture
ratchets up her credit-card balances.         [these] on our own. Unfortunately,                    in your life. Go to museums on
                                              many of us have learned the hard way.”                “free” nights, and visit local art
Karen T. Lee ’85 panicked two years ago
                                                                                                    galleries. Seek cheap tickets to
when she realized she owed $80,000—
                                                                                                    plays (go to previews, volunteer
including a $40,000 mortgage and              What’s Worth Going
                                                                                                    to serve as an usher). And if you
$5,000 in student loans she deferred          Into the Red?                                         must see first-run movies (you
while finishing her PhD. The rest she         Robbins has given herself a reprieve                  can save a lot renting them later),
attributes to living off credit cards when    by putting some student loans                         go to the cheaper first showing.
she was between jobs, a general “lack         in forbearance and arranging for
of restraint with money, and a couple         graduated payments on others. In
of bad decisions”—like renting a costly       retrospect, she and other alumnae have
apartment. “Credit cards,” she adds, “are     asked themselves: If I had it to do over
evil.”                                        again, would I make the same financial
Kate M. Axt ’01 left MHC owing                choices? What’s worth being in the red
$15,000 in student loans. She has             for, and what isn’t?
paid that down to $10,000, but in the         “Graduate school was worth every
meantime accumulated another $25,000          penny,” Smith says. “Even some of the
in credit-card debt. Moving to New York                                                           • Cancel cable TV and watch
                                              debt from my travels I would not trade
City and furnishing her living space                                                                shows at a friend’s or on DVDs
                                              for the world; the memories are too
accounts for about $10,000 of that, she                                                             from your local library.
                                              precious. But do I wish I had not gone
says; “I tried to do it economically, but     on shopping sprees in Europe and put                “Bottom line,” says Kelman:
it added up.” Still, she admits making        everything on credit cards? Definitely.”            “Decide which things that cost
“some purchases that didn’t need to be                                                            money really matter to you and
made, including clothes, eating out, and      Nowadays Lee could justify getting                  which ones you can do without
an iPod.”                                     loans for a car, an education, and a                or skimp on. There are plenty
                                              home—but that’s it. Even that mindset               of choices (clothes, makeup,
Her parents covered her student loans         is “incredibly different from two years             transportation) where you can
while she was at MHC, but once she            ago, when I would have gone into debt               spend more or less money.”
graduated Clare M. Robbins ’04 took           for just about anything,” she says. “A
over the $65,000 balance. She says she        house, a car—if you need one where


                                                         Mou n t Ho lyo k e Al u m na e Qua r t e r ly       Summer 2007           79
              To reduce her credit deficit, Peg Atkins Danek ’85 first had to get her spending under control. She started at the supermarket.


     you live—and school                    credit cards, started buying     toothpick but keeping             important to make regular
     are all worth going into               groceries in bulk, and cut       myself in good standing.          payments.
     debt for,” agrees Susan R.             out nonessential services        That’s what keeps me sane.”       Since her financial reality
     Bushey ’96. “But you have              like cable TV and call-          To get a mortgage two             check a couple of years
     to be able to pay them off.            forwarding. Then she             years ago, Bushey had to          ago, Karen Lee has paid off
     That’s the key.”                       tackled the loans, paying        pay off a student loan and        $20,000 of her debt. She’s
     There’s definitely “good               off the high-interest ones       some credit-card debt.            a follower of radio talk-
     debt versus bad debt,” says            first. Becoming “habitually      Reluctantly, she turned to        show host and best-selling
     financial adviser Dam T.               frugal” and staying in           her parents for assistance.       author Dave Ramsey, who
     Nguyen ’02. Mortgages                  the black is a “fantastic        They helped her pay               penned The Total Money
     are good—in part because               feeling,” she says.              down her balances and             Makeover. “His get-out-
     “you get tax deductions                                                 negotiate with credit-card        of-debt plan … has worked
     on the interest paid. Cars             Getting Your Financial           companies. She has just           for me,” she says, adding
     are not good investments,”             Land Legs                        one card now and pays the         that she “stopped using
     she adds, because their                                                 total due every month.            credit cards cold turkey.
     value just keeps going                 But even when you stick                                            I only buy things I can
                                            to your financial guns,          A year ago, Kate Axt cut
     down. (She recommends                                                   up all her cards except           pay for now. I feel pretty
     buying one that’s “decent              clearing your debt can                                             good,” she adds. “There’s
                                            seem unbearably slow.            one, which has a limit of
     and reliable, but not                                                   $500. She’s also found that       a light at the end of the
     luxurious.”)                           Robbins says for a while                                           tunnel”—and that should
                                            she felt immobilized by          online banking has helped
     Getting one’s monetary                                                  her “keep everything in           be some reassurance for
                                            financial fears. “Lately                                           anyone who owes.
     house in order requires                I’ve tried to transform          order and pay things on
     some financial know-                   my thinking, to believe          time.”                            Maryann Teale Snell ’86
     how and a heavy dose of                that [having this much           If you still carry significant    is a writer and editor in
     discipline. To reduce her              debt] is not going to be         balances on your credit           Saratoga Springs, New
     credit deficit, Peg Atkins             the ultimate setback of my       cards, Nguyen offers this         York.
     Danek ’85 first had to                 life. [But] I still need to      advice: “Be methodical            Learn More For more
     get her spending under                 have a strategic plan and        about paying a bit extra          on how Peg Danek got
                                                                                                                                                Pau l S c h n a i t tac h e r




     control. She read Finances             not be willy-nilly about         every month.” And if              out of debt, and tips
     for Dummies, tracked                   it.” The trick, she thinks, is   you’re inclined to shop           from Consumer Credit
     her purchases using                    to “pay what you can each        around for lower-interest         Counseling Services, visit
     Quicken personal finance               month—and be consistent.         cards, the zero-percent           alumnae.mtholyoke.edu/
     software—and changed                   I’m picking away at my           variety “can help buy some        go/debt.
     her habits. She quit using             debt mountain with a             time,” she says, but it’s still


80   w w w. a l u m n a e . m t h o lyo k e . e d u

				
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posted:9/25/2011
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