I know I left things sounding pretty dire the last time I spoke about my home refinance situation. I’ve been meaning to make note of the resolution here for a while but then I also didn’t want to jinx anything.
I made a deal with the devil parents. I know it’s not an option everyone has and to be honest I really tried to exhaust every other option first. Let me tell you a story or two…
When I went to college, my middle class parents made too much money for me to qualify for any financial scholarships and even though I was an Honors Student in high school with an excellent GPA and a semester of college Freshmen English completed during my final semester, it wasn’t enough to overcome the advantage of having parents who were well-salaried even if I wasn’t and didn’t want to be associated with their dimes.
I had no choice but to accept the charity of my parents. For four years, my parents paid for my college education as well as my room and board and any other expenses outside of the pitiful money I made at the handful of underpaid part-time jobs I attempted to work while acquiring a 5-year degree in 4 years, which required attending 4 semesters a year (2 in the summer) plus 1 extra 5 week semester one May where I had to read almost a novel a day. For 4 years, my parents wanted to know how I was spending not just my money but my time as well. You know, they wanted to make sure that their investment was paying off. And don’t think they didn’t have a say in what classes I took or what major I had.
During those same 4 years, my parents were also financing a scholarship for another student at another college. This young man whose name I’ve never known — let’s call him Joe for the sake of this story – was actually from a family who could not afford to send him to college and knowing my parents he probably also had an excellent GPA in high school. I’m told that they never met him but that he was from a minority ethnic background. I suppose he had a choice to accept the charity of my parents, but probably the idea of 4 years of tuition at the local university was a good deal, so why pass that up?
So, here’s the facts: Joe and I both technically had scholarship agreements with my parents, but they were vastly different agreements. Joe’s agreement was limited to spending four years keeping up his grades and getting his tuition paid while getting a degree in a Business major. My parents never once called Joe at his home to check on him; they never wanted to know what his study schedule was like; they took no role in making decisions about his class schedule or his extracurricular activities. They did not discuss whether or not he had a t.v. in his bedroom or whether or not he should have to eat breakfast in the cafeteria. In fact, as far as I know, Joe went to college with the goal of becoming what he wanted to be growing up, experienced college the way he wanted, got the degree he wanted, and possibly got the job he wanted afterwards.
I wanted to be a journalist or a writer in my heart of hearts but those jobs didn’t really “make money” according to my parents so I was steered toward the sciences or engineering. My senior year of high school, I was leaning toward physics, aerospace engineering, or mechanical engineering. (I kind of liked finding out how things worked and I was really into science fiction.) My parents were thrilled. I started college as a mechanical engineering major but after fourteen months it was clear to me that neither physics nor engineering were interesting enough to me to keep me awake or keep up my grades for 4 years of college. I had an interest in Accounting, which if some of you recall is what my father is — he’s a CPA — and I still wanted to be a journalist or a writer. However, Business majors apparently were not as successful, money-wise, as science majors or engineers and journalism and writing was still a big no-no. The only degree in Engineering that I had any talent at and promised not bore me to death was Computer Science and thus the agreement was made with my parents –
Don’t get me wrong, I have never said that I didn’t like being a programmer. I enjoy programming; I’m quite egocentric regarding my programming skills, I admit. In fact, I am a self-proclaimed programming diva. I love the challenge of troubleshooting, the art of design and development, the triumph of doing the impressive impossible. There’s simplicity, logic, puzzles, beauty, and drama in the world of programming.
However, at the time, I probably would not have chosen this as my career had I been given the opportunity to pick any career I wanted.
My scholarship agreement involved so much more than Joe’s. And I’d rather not hear from the crowd who just wants to tell me how I should have just walked away from my parent’s money and rules, learned to take care of myself, put myself through college, and be my own person; until you’ve been there, felt the enormous pressure weighing on you, you can’t say anything, know anything. At the time, I sold my soul to the devil my parents to get a college degree because that’s the only way I knew how to get one. The scholarship system really is set up to screw the middle class student who doesn’t want to or can’t depend on his or her parent’s income.
I’ve always said that the price of taking money from my parents always comes with mental anguish interest payments.
The second story I want to tell involves a time after college as a 20-something when I was living paycheck to paycheck as an underpaid programmer with no benefits and no vacation time with a roommate who made even less money than me. Honestly, I didn’t understand why I wasn’t making a fortune like all of the books, guidance people, and PR promised programmers and geeks would be making in the 90′s. I’ve mentioned before that I’ve had to live on the Pantry Diet in the past; well, that’s when I discovered that wonderfully undelightful diet and when I learned to dig through my sofa for loose change every Saturday morning after having my friends over on Friday night. I recall that you could get a McDonald’s All-American Meal for $1.59 back then. (For 10¢ more you could get cheese…of course, that was after the first time I was a vegetarian and before I found out I shouldn’t eat meat because of my kidneys. ) I got into about $5K – $7K debt and I just didn’t know how to get out. It was like quicksand; every move I made, I sank further into debt. Eventually in desperation, I went to my parents for help.
You have no idea what it’s like to have to admit to my father that you are in financial trouble, that you have run up credit cards and not paid them off every month, that you have not lived within your means. There are hours long lectures; there are repeated questions about why you made the purchases you made, why you spent the money you did, why you didn’t pay the bills you didn’t. There are doomsday tales of people your parents knew who went into debt and horrible things that happened as a result. Heaps of guilt is shoveled onto your miserable self as if you weren’t already feeling wretched.
Talk about feeling like a failure when you get into stupid debt and you are the child of a financial control freak CPA. I suppose it’s like being the criminal child of a Supreme Court Justice…or at least that’s how it feels, the crime of stupid debt while being the child of a CPA. Should have known better.
It took me about 10 years to both pay off the money I borrowed from my parents and the rest of the money I owed, but I did it, and I felt good when I did it. Becoming debt free is liberating. It’s kind of like that feeling you used to get on that last day of school every year when the Summer was just starting and you had 3 whole months of freedom ahead of you with nothing to tether you down. It’s like that, but better.
And I had planned to stay that way. Honestly. My father heaps a good deal of guilt on me about living within my means, but my parents also dish out a lot of conflicting messages each with their own built-in pressure, even at almost 40.
As soon as I was out of debt, even though my plan was to spend the next 2 to 3 years building up a savings to be certain I had an emergency fund and a reserve and a down payment before considering anything like buying a home, my parents immediately started pressuring me to buy a home because I was just “throwing my money away” on an apartment and it was time for me to “invest in real estate”. It was all they talked about when they talked to me and I admit, I have issues about needing parental approval; I’m still discussing this in therapy. My mother even insisted on driving me around to go look at houses while I was recovering from an outpatient surgery procedure that she flew in to take care of me for. So, I bought my beautiful house much sooner than I probably should have — right before the housing bubble burst.
And so, having to have my gall bladder removed, needing an emergency appendectomy, discovering an autoimmune kidney disease and gastroparesis on top of my other health issues, having the furnace fail and thus need to be replaced, suffering ice dam damage to the roof requiring a new roof and repairs to the bathroom, the kitchen and the living room, having the unexpected need to replace my car, and dealing with the unexpected increase in utilities and other bills…well, my limited savings in 3 years has been over-exhausted. Every time I got some money saved, it immediately got spent again by the next unexpected thing, until all I had was my credit card, which I very reluctantly used because I knew from experience what that was like.
And having my mother give me advise such as “You really should have $10,000 in savings” or “You should be making extra payments on the house” when I tell her how I’m struggling financially really doesn”t help my mental state. And I can’t blame anyone but myself for being in this position because technically I’m the one who got me here. I’m always saying that once you become an adult you become responsible for your own actions and you can’t blame your parents or what your parents may have said or did to you in the past for anything you do as an adult. I want to blame them for pressuring me, for subconsciously enabling me into positions that are hazardous to my financial and mental health, positions where I will need rescuing, positions that will leave me dependent on them, forcing me back into the submissive child co-dependent role. I want to blame them, but I have allowed it to happen…again.
I spent about 4-6 months last year trying to get a loan for debt consolidation through the usual routes and even though I still have a good credit rating, no banks or lending institutions were interested. Even Lending Tree didn’t respond and they have that 24 – 48 hour guarantee.
I know from experience that if I have fewer payments per month, it is easier for me to pay everything off, but if I have to stretch my dollars to cover too many debtors then nothing will get payed off. However, no one was lending. Then when I tried to alleviate my pain through home refinance, well, we know that had problems due to the fact that my home lost value; the bank wanted me to give them about $15K to pay down the house to 95% — if I had $15K, I wouldn’t need to refinance, right?
So, after a lot of soul searching, sleepless tossing and turning, stomach acid churning, I talked to my father about what happened with the home refinance and with the bills last year and how things got behind. Despite the fact that I outlined how my income increased minimally in 3 years and my basic expenses including property taxes and escrow plus the addition of a loan for the new furnace and a loan for the new car had grown exponentially and not in proportion to my income, my father gave me a lecture about learning to live within my means.
However, with the lecture also comes a loan for the money to pay down the house to refinance and also money to pay off a credit card and my Time Share loan. This parental loan is a long-term low interest loan, but as I know from experience it comes with extra terms that usual loans don’t have. For example, I recently admired something and wistfully said that it was something I’d like to have one day and my father replied, “Does that fit into your new budget?” Now, I didn’t even plan on buying whatever it was; heck, I didn’t even add it to my Things I Want wishlist, which I use to keep track of things I really want. Already the mental anguish part of the payments has begun.
So, the good news is that my house payments will be $400 lower starting April 1rst. Plus, I’ve consolidated about $10K with that $15K my parents loaned me; so I’ll be making fewer payments that are less money, which will allow me to rely less on credit each month. I actually opened a second checking account and I will keep paying all of my bills out of my current one and will use the new one to buy groceries, pay for the monthly household things, and spend on whatever the variable monthly expenses are; thus, the original account should always have the amount needed to pay the bills for the month at the beginning of the month and the new account gets what’s left over. I think this will actually make budgeting easier since I have such a hard time dividing things up into categories.