When I was a child, I knew I wanted to be a lawyer representing abused and neglected children. I talked about it all the time to anyone who would listen and used any opportunity to sharpen my debate skills. Due to my belief I would become a lawyer or a Guardian ad Litem, others around me believed it as well and helped me along the way.
When I graduated college, I had $7,000 in student loan debt courtesy of my full scholarship not covering summer school. There were signs I should pursue another career path, but I saw those signs as adversity I had to overcome.
I had an opportunity to get a Master’s in Psychology for FREE. Of course, I passed on the opportunity because I wanted to make good on my word that I was going to be a lawyer. I felt as if I had to go to law school because I did not want to disappoint my family and everyone who believed in me.
My LSAT score was not high enough to qualify for any scholarship, not to mention they were highly competitive. Halfway into my first semester of law school I owed $41,500. Present day, I am on track to pay $54,000 in student loan debt *insert eye roll*. Law school was the worst financial decision I made.
Before I withdrew, I called the First Lady of my former church. I told her about my experience, she commented it was as if I was asking her permission to leave. Later, I reflected on what she said and realized it was true, sad but very true. Perhaps I wanted someone else to have ownership over the decision to withdraw.
Since leaving law school six years ago, I have paid over $40,000 in student loan debt when I could have only paid $7,000. I am still feeling the sting of that debt present day.
I wanted to buy a multi-family unit this year. The home buying program I was going to go through requires home inspectors to be approved through them. The program offers no down payment, no Private Mortgage Insurance (PMI), no closing costs, 2.5% interest rate for a 30-year loan, and the bank pays for the appraiser. Unfortunately, their requirements for a home inspector exceed the state requirements and I have been told no too many times to count. I am at a standstill with the program until I convince a home inspector to say yes.
I shifted gears and began looking at financing a home under $150k with either a conventional or Federal Housing Administration (FHA) loan. With conventional financing I would be out of pocket over $14,000 with less than $5,000 accounting for the down payment in comparison to being out of pocket only up to $500 for a home inspection through the home buying program. Due to not having a 20% down payment I would also have to pay a monthly fee, PMI aka punishment for poor people. That is another blog for another day.
I prayed about whether I should proceed and schedule home viewings. The Holy Spirit spoke to me in a dream and told me to wait. I think about the money I spent on student loans and how I could have had a 20% down payment if I had not gone to law school.
It may not be law school for you, it could be a wedding, gift or party for yourself or someone you love, vehicle, a home, moving, relationship, vacation, a business, furniture, co-signing, or someone wanting money from you. The same lesson applies. Do not let the words you speak be a catalyst for financial regret. It is perfectly acceptable if you cannot do what you said you would. If applicable, communicate your no to who needs to hear it. The only one owed an explanation are your debtors. You must live with and pay the price for your financial decisions. Let this serve as a reminder to consider other options, evaluate your long-term goals and whether the financial decisions you make are aligned with them.