Jason sent me a question yesterday that neatly encapsulates a lot of the mail I receive, as well as rounding up some of the topics we’ve been discussing this week regarding life after school. “I’m living on credit,” he wrote. Here’s his story:

I graduated a year ago with a useless degree but what I thought was a good job.  I had recently purchased a new car, but only had $8800 in student loans and around $3000 in credit card debt.  I had planned to pay off my debt and keep my cost of living low, but my job slowed down until the hours were near nothing.  Being naive I kept thinking things would pick up until I just had to quit and get a couple of temporary jobs. 

I’m currently working at a great job with a great rate of pay, but it’s only 20 hours per week.  I am in the middle of my clinicals to become a nurse’s aide and fully expect to be working in a hospital full-time by the middle of June with a pay rate high enough to allow me to aggressively destroy my debt.  My question is, what should I do in the meantime? 

I have looked at my budget and with all my necessary payments and only $100/month in food (absolutely no entertainment or extras) I am still in the red.  I probably should have asked long before now but I can at least hope this question may help others, if you decide to post it on your website. 

Jason’s concerns are not unique. After my presentation on Tuesday night, I spent some time talking with a young man from Alaska. He’s spent his last few summers working on fishing boats to earn enough cash to pay for school — he hasn’t had to take out any loans. However, he hasn’t earned enough to also pay for his living expenses, so he’s been buying the things he needs on credit.

“It’s hard to do some of the things you suggest,” he told me. “I was sitting next to two girls who were reading your handout. They thought the ‘spend less than you earn’ advice was funny. They don’t earn anything, so that’s impossible. They can’t avoid debt.”

And neither can Jason right now, it appears. Or can he? What would you do if you were in his situation? What do you do when your income is so low that debt is unavoidable? When is it okay to deficit spend?

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