Is that new car causing your child to take out student loans? - Nancy McKenna ––

Is that new car causing your child to take out student loans?

Are cars your thing?  Why?

  • because you think they're such a great deal?
  • because you like having a nice shiny car that reflects your status? 
  • because interest rates are so low?
  • because you can trade them in every three years for something new?

Or maybe you actually buy cars, but "like to have a new car".

Or maybe you have multiple car loans?  Are you a multiple car household?

Have you stopped to think how this impacts your ability to save for your college?  Car payments take a huge chunk out of the monthly budget.     Multiply that by a few car loans, and ouch.  

Maybe you've been making car payments so long that you accept them as normal.  They aren't.

If you have kids heading to college, you need to make saving for college a priority, so they don't have to borrow.  That may mean you get rid of the new cars.  And the boat.  And the motorcycle.   And the jet ski.  

It seems a bit unfair to have unnecessary costs coming out of the budget each month and then tell your kids that you just couldn't find extra money to save.

I worked with someone who had a stay-at-home wife and a daughter who lived at home and went to a community college.  I asked why the mother and daughter didn't share a car, rather than have two car payments.  He wouldn't dream of asking them to share a car, because one of them would be inconvenienced.  I helpfully explained that this is exactly what families across this great country of ours do every day.  

It is exactly decisions like this that are the reason many families borrow for college.  They spend money on things that aren't a necessity, then don't have money for things that are a necessity.  Then they throw their hands up and say "college has become so expensive!" without examining all of the other choices they make.

Imagine a world where student loans didn't exist.

What would you do if student loans weren't available? Would that have changed your car-buying behavior?   

Please - think of your child - aren't you passing the buck to them?  Literally?    Cool it on the car payments!

About the Author Nancy McKenna

I'm a personal finance geek. A real estate investor. An accountant, a single mother. And I'm going to get my kids through college without student debt! Will you?

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