James is the same age as Josh, and entered university five years ago with a similar dream. His family had always been desperately poor – he knew right from the get go there would be no financial support from his parents.
His parents always lived within their means however – and lived by the philosophy, if you could not pay the balance in full every month, then whatever it is you want to buy should NOT be going on a credit card.
James was one of those kids who proudly applied for his first credit card on his 18th birthday, and within a couple of years, he had a second card and a credit score of 780. He never missed a payment, and he rarely carried a balance.
He is a fiendishly hard worker too. As long as I have known him, he has always had at least two jobs – even as a high schooler. His undergraduate degree was in a Co-op program at Waterloo – which meant six terms of a four month duration of employment in a field related to his studies. Even then he would moonlight – sometimes washing dishes, other times, as a short order cook, another time as a bouncer in a bar !
He has had to change address every four months – either he was studying at Waterloo, or he was living close to his latest four month job posting. He never had the luxury of rent free living in his parents’ home.
He worked extremely hard at school too, and researched all available financial options like bursaries, grants, scholarships and OSAP. With great reluctance, he borrowed from OSAP a couple of times, but the debt is pretty negligible – he owes $7,000 to OSAP today, which is peanuts after five years of post secondary education. (We can all do the math – so far, life and his related education costs has probably cost around $100,000 so far)
Today he is waiting to hear if he has been accepted into Medical School. If he is, money should not be a problem. His bank has already assured him they will finance the entire program – up to $30,000 per year (more if needed).
Yes, he will eventually graduate as an MD with a significant debt-load, but his income prospects will be so bright, this will prove to be quite manageable.
James also has a plan B. If he is not accepted this year into Medical School, he will accept one of several offers being made to him by other Universities to pursue a Masters degree – likely an M.Sc. These programs will be fully funded – he will earn money through the process as a teaching assistant, and his tuition etc. will be paid for.
So there we have two young men sharing a similar dream – going in drastically different directions. I really hope they both get there – but at this point, my money is on James. For Josh to finish med school, his family is going to have to come up with a creative solution to the financial crush awaiting him.
It’s interesting – Josh came from a middle class background, living in a nicely appointed suburban home in a desirable neighbourhood. James lived with his single mum in a broken down rental home most of his entire childhood – never enough money to go around. Mother would rely on the generosity of the food bank on occasion, and on various social services to help out in times of real need (like for Christmas presents etc)
I could end the story here, and let the reader assume the only reason their futures are so different is from the mis-use and abuse of credit. And that is definitely true. Maintaining a healthy respect for credit, and his credit rating is paving the way for James to go all the way in pursuit of his education.
Josh’s parents kyboshed that for him. I can’t lay too much blame at the feet of a nineteen year old who signed papers put in front of him by his parents at a time of need – but the price is clearly being paid now.
Beyond that though, the lesson is even simpler, more primal. James and his family always lived within their means – they did not “hang their hat where their hands could not reach”.
Josh’s family always lived beyond their means, betting their future on the “if come”, and it never came.
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