Choosing fiscal doom, but not gloom

New Year’s resolutions have always been a futile exercise for me. Sure, I do more course reading, I work out a little more for a little while, I drink … well, you get the point. Listing the goals was the easy part; executing them proved more difficult. But even with these yearly goals falling by the wayside, I have faith that at the very least, I could complete some life plans in 2010.

But now I have six months left until the fragile structure of my life comes crashing down: I graduate. And then what?

Debt. There it is. There is my future. And it has taken over a year of fretting to get to this realization, it will take another six months to prepare for it, and a lifetime to pay off.

This past weekend, I received a seemingly simple financial analysis, but not one I had given much thought to. It goes something like this: I will go into debt, and it really just depends on what I want to go into debt for ““ education, a house, or something else.

In my racing around to find post-grad opportunities, I ignored finances, thinking I would deal with it when it came time. Last week it came time. In a fortunate turn of events, I got the opportunity of a lifetime and with it, the unfortunate wake-up call I had been dreading.

I received admission into a grad program which would give me academic experience in a desired field, allow me to live in a foreign country, challenge my personal growth, and let me be around boys with accents. But all this comes with a hefty price tag of $40,000 ““ which I can take out in loans. Coupled with the lofty aspiration of law school which will inevitably end in approximately $100,000 of debt, I am looking at a loan repayment plan of $800 per month over 30 years. Cool.

I am not alone with these terrifying numbers. The average college student graduates with a debt of $23,186 and if they choose to pursue a master’s degree, they take on a median debt of $25,000. The numbers go up for professional degrees.

So then let’s hypothetically forgo the program and think about finding an entry-level job in Los Angeles and saving money in that year off ““ maybe. (Desirable career opportunities in my hometown are almost non-existent and I’m pretty sure that the reason my mom and I are best friends is that we don’t live together, thus, moving home is not an option.)

Consider rent, health insurance, utilities, groceries, personal expenses ““ this comes to about $1,250 a month. Then consider the purchase of a car and subsequent requirements of car insurance and gas. The purchase of a new car is approximately $28,400. So maybe I won’t buy a car that costly. I’ll aim for a car around $15,000. With a payment plan, a down payment of $5,000 and a 10 percent interest rate, I will spend approximately $250 per month for four years. Car insurance costs roughly $150 per month and for gas, let’s say $150 a month.

Adding in the car expenses, monthly expenses (around $1,800) would eat up my income from my entry level job, leaving me in the hole at the end of year. Because of the end-goal of law school, whatever job I did manage to scrounge out of the collapsing job market would only be temporary and probably less than helpful in future career plans. So the second choice may mean less debt, but a generally hard and un-fun year.

So really, I’m just looking at a win-win situation.

Clearly, financial distress is the way of the world and I need to realize that I must and need to burst out of the financial security that UCLA has given me so far. And while I plunge into financial doom, I want to say that I did it for my life goals, that I am happy and do not regret the choice.

I have not made my decision yet. I refuse to take the easiest or cheapest path, nor do I want to ignorantly destroy any hope of financial stability. Financial risks and debt are obvious, but personal growth and happiness should not be the trade-off. I hope that at the end of these six months, the reason for my debt is one that I can be proud of.

E-mail Bissell at [email protected].

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