Tuesday, June 26, 2012

Free and clear

by msaari via Flickr
When I graduated from college, I was in need of a new car. Big Blue, the 1995 Oldsmobile Cutlass Ciera that I had inherited from my late uncle, was on its last legs. A few of my family members generously contributed graduation gifts to the new car fund and I picked out a used car for myself, but I was still a way off from being able to cover the cost of the car.

Since I had just graduated, I did not have a job nor had any leads for one. I figured that the odds of me getting a car loan were pretty slim since I currently had no income. Even if I did get cleared for a loan, I didn't feel comfortable signing myself up for a monthly bill that I did not know if I could actually afford once I did get some kind of a job.

Enter my unwaveringly sweet grandma. She offered to give me a loan for the remainder of the cost of the car. No minimum monthly payment needed, no interest, and I could take as long as I needed to repay her. It felt like a dream come true.

Once I secured some income, I began to pay back my grandma in fits and starts. Despite the relaxed agreement between my grandma and me, I began to feel incredibly guilty for owing her so much money. If I had to miss a month or even more because other financial obligations crept up, I felt like I was letting her doubt and being irresponsible. The dream arrangement was beginning to feel more like a nightmare.

I had and still very much have student loans from both undergrad and grad school that were and are accruing interest, but I decided that paying back my grandma was more important than sending extra payments to my student loans. Sallie Mae is a company. My grandmother is a person. I treasure my relationship with her far more than the money I would of used to pay interest on student loans. Two years ago, I decided that no matter what, I would send her a check every month for at least $200. If I had to dip into savings, I had to dip into savings. If I had to sell unused and unwanted possessions, I had to sell them. Any extra money I got went to the debt I owed my grandma. My large tax return that would have looked nice in my savings account or shaved off of my student loans went straight to my grandma.

Last week, I wrote my last car payment check to my grandmother. Because I moved in with my dad temporarily until my next job is secured, I was able to send her much more than $200 these last few months. I am so glad that my grandma trusted me enough to lend me thousands of dollars, but I'm even more glad that the debt has been paid back in full. Now my debt elimination plan is focused solely on those pesky student loans.

I like to talk about personal finance in conjunction with hoarding and living with a hoarder because they are so often intertwined. My mother is the cheapest person I have ever met. And I'm not mistaking the term "cheap" for "frugal." I am a money conscious person with many frugal tendencies. My mother is just out and out cheap. Her cheapness has not always been out of necessity; rather, it is yet another symptom of her hoarding. I like to highlight my experiences with personal finance because money issues were commonly at the forefront of living with my mother. I no doubt learned a good number of money saving tips and tricks from her, but my handling of money is often very different from what I observed living with my mother.

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