“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