Follow along as we try to dig ourselves out of $180,000.00 in Student Loan Debt. It won’t be easy and it may take years, but with any luck, someday we will get back to a $0.00 net worth. In this series, we focus on a brief financial issue currently confronting us, and then move on to show our latest finances. Also, every month we will also highlight our blog stats, if anyone is interested.
When Being Frugal Can Cost You Money
As a natural moderate, I believe (like most people) that too much of anything, even something positive (or perceived to be positive) may actually end up being a bad thing.
As our readers know, Mrs. Broke Professional and I pride ourselves on our new-found frugality. We are a long way from where we need to be, but we have taken a lot of steps towards putting the proper systems in place to start paying down our still-daunting six figure student loan debt.
Even though we believe in living a fiscally responsible/frugal lifestyle, even we are sometimes disturbed when frugality goes too far.
Frugal to the Extreme
For instance, most people will agree that obtaining your condiment/napkin supply via ripping off the local fast food restaurant is usurious, at best.
Another example of frugality gone too far that we have witnessed recently in our own lives involves our apartment’s laundry room. We are lucky to have the rare fortune of living in an apartment complex that has inexpensive laundry facilities (as compared to the local laundry mats).
Unfortunately this has led to a “conspiracy” in our “apartment community”–many non-residence locals have begun frequenting our laundry facility to save money. This angers a large portion of my apartment neighbors.
Admittedly, at first blush the local’s actions do not seem like high crimes against humanity or anything (except to our elderly neighbor Bill (name changed), but when you’re waiting for hours to try and make sure you have some clean boxers for the upcoming work week, you yourself may think otherwise.
Learning That Being Frugal in an Inefficient Manner Can Lead to Further Expenses
We have also learned that cutting corners on your finances can sometimes end up cost you more money in the long run.
Sometimes pipes need to be replaced rather than plugged.
Sometimes buying the better brand will lead to a higher energy efficiency, or a product that will last years longer than its less expensive counterpart.
We were reminded of these truths this week, while going to the dentist of all places.
The Limits of Frugality Learned the Hard Way: In the Dentist’s Chair
The last time my wife and I went to the dentist it was mentioned that one of us (I won’t say who so as to avoid getting in trouble….alright, it was definitely Mrs. Broke Professional) (Ed. Note: You suck) was told that they had a really bad cavity, and that it would have to be filled soon or it might lead to the need for a route canal.
At the time only one of us was working because the other was already in school. We did not have great dental insurance. It was decided that it would be best to wait it out and get the cavity filled once we were both working and could afford the bill.
Long story short, we finally got back to the dentist this week, and Mrs. Broke Professional now definitely needs a root canal. I am not sure how much our insurance will cover, but I am sure it will not be 100%, and I am even more sure that getting a root canal will be a relatively expensive procedure. (Not to mention that it will definitely be a crappy experience for Mrs. Broke Professional ).
By Mrs. Broke Professional trying to avoid the cost of paying for a cavity (out of pocket) we now have potentially much greater financial exposure for the root canal(s).
As we learned this week, just like with everything else, it pays to be moderate in your frugality. If you are stepping on other people’s toes or cutting corners to save money, the only thing you may earn in the long run is a bad reputation or further financial difficulty.
With that said….on to our weekly finance update: (let us know if weekly is too much and we will switch to monthly)
Broke Professionals Weekly Finance Update
Starting Financial Situation: Upon graduation of Graduate/Professional School
Debts: $180,000.00 (All Student Loans)
Assets: $15,000.00 (wedding gifts plus savings)
Financial Situation as of Today, 2/5/11
Now One Week Ago Difference
Federal Student Loans Owed (Mr. Broke Professional): ($57,389) ($57,389) $0
Private Student Loans Owed (Mr. Broke Professional): ($60,556) ($60,750) +$194
Federal Student Loans Owed (Mrs. Broke Professional): ($48,500) ($47,500) +$1,000
Total: ($165,639) Difference: +$1,194
Now One Week Ago Difference
Savings: $38,524 $38,490 $34
Retirement : $8,450 $8,000 $450
Total: $46,490 Difference: +484
Current Net Worth: ($119,149)
Difference (from last week): +$1,670
Difference from Rock Bottom Point: +$45,851
Assessment – Still a Long Way To Go To Get Back to Broke