Spotlight: Personal Finances

The following comes from a page I used to have on the website in early 2008 that detailed my views about personal finances:

Recent data shows Americans have reached the point of having a negative savings rate, a fact exaserbated by the growing mortgage crisis that is putting more families into “reverse mortgages” (owing more in the loan than there’s equity in the home).

As a recent college graduate with a large amount of student loans and credit card debt, personal finances is an important issue to me, and any attempt by the government to improve the climate of personal fiscal restraint, of personal savings, is of interest to me.

Fact is, as a 27-year-old, I am a rare find in my generation that has a defined benefit plan, much less has a sizeable (5-digit) defined contribution 401K plan, despite only having a salary that is only average for the DC area. But I also have $46,000 in student loan debt and about $5,000 in credit cards.

This leaves me, on balance, a lot like most of my generation – I have a negative net worth. This is not a good way to start out life. I am certainly nowhere near comfortable with thought of an auto loan, much less a home mortgage.

So what can we do about that?

By 2014, I’ve eliminated nearly all credit card debt and my student loans are down to $25,600 (I started at $52,600), but I am still concerned about my finances. I will add my thoughts to that question in later posts. Feel free to add your own in the comments.