Paying off student loans | Paul Chapter 3 | Money Break

Paying off student loans | Paul Chapter 3 | Money Break


[Rythmic, smooth music] When I finished school, I had crazy amount of debt. The goal for me was get out in front of the debt, get more financially independent,
and then start saving. When you’re in school,
you’re convinced that you’re going to get a good job, you’re going
to be able to make a good living, and you’ll be able to get
on top of it really quickly, and it’s no big deal because, in relation to what you’re will make,
you’ll be able to get out from under it really simply. When you realize that it’s not that simple, when you realize that the social-economical situation
that you’re in changes, that becomes a real big “Oh, my God!” Debt has to be paid off
as aggressively as humanly possible. When I’m talking about debt,
it’s harmful debt, like student loans. It’s done its purpose.
It’s got you educated. Its purpose is done, it’s got
to be paid off quickly. It means that you can move on
to your next stage of life, which is savings. Debt doesn’t go away. It’s something where you can’t just handle it. You have to actually live with it,
and you have to figure out how to get on top of it. Bad debt, in my mind, is debt – anything that exceeds your ability to pay in a reasonable amount of time. When you’re out of debt
and you’re able to start saving and strategize for doing that, it means that, hey, I’m not going to buy that car right away. I’m on that bus for another year,
and I will save that money for the car, and I can buy the vehicle that I want. If I have to ride the bus a little longer,
then maybe by the time I go to buy that car, it might not be
the same car you originally wanted to, because you knew how hard
you worked to save for it. That’s where the second phase
would be the savings aspect. It forces you to look at your priorities,
and it gets you in that position where you have options and you have choice. Thirdly, I’d tell people to look at their life of borrowing as an entire spectrum from early as you can to when you forecast yourself being able to retire. As an employee, it’s what will I need to do to be able to maintain
the quality of life that I have now and be able to take that into my golden years. My name is Paul Foster.
This was my Money Break. (Off-screen voice)
A message from the government of Canada. [Government of Canada jingle]

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