Monday, January 4, 2010

Much Too Expensive

The past couple of days have had me thinking about a basic concept I learned in one of my business classes however long ago: opportunity cost.  If I choose to do X, then what opportunities do I lose?  Weighing opportunity cost has always been close to my heart, so I really enjoyed learning about its application to business.  But this weekend and today I have come to think of it on a new level. 
You always hear that being married is about sacrifice.  I had a moment this weekend where I was sitting on the couch with Ryan. The episode of Dead Like Me that we were watching went to credits, and I looked up at him to kiss him but instead I was overwhelmed with how valuable he is.  I get caught up in cleaning our apartment, rearranging furniture, making grocery lists, etc., but it was different to be immersed in the weight of the value he has to me.  Something warned me that I will surely have to give up things I want to make him happy.  In that moment I was willing.
Several times this weekend I skimmed over what I knew he wanted so I could get what I want.  I've got to stop and ask myself, is it worth it?  There must be sacrifices on both sides... so who's turn is it to give?  There comes a point where newlyweds stop going out of their way to make sacrifices for each other and struggle to find the answer to, "ok, how are we going to make this liveable?"  We're working on that... I think we always will be, and I'm proud of us.  He is worth whatever opportunities he costs.
Student loans, however....hahaha... well to my friends who are students and have the attached student loans, you may have it more together than I did.  Maybe you already know how to login and see all the arms and legs you owe, or maybe you don't.  If you don't know how, then take a few minutes and figure it out.  Email your username and password to yourself or something, then get in there and see the breakdown of what you owe. We have been working to pay off our accrued interest first because [and maybe I'm telling you something you already know, but I didn't know it until after graduation] accrued interest is building up even though you don't have to pay it yet.
Anyone who knows, correct me if I'm wrong.  I didn't do well in accounting and numbers are not my thing, but here's how I see it...
The principal of your loan is like a big ugly ogre and the capitalized interest is like a growing tick on his head.  The accrued interest is like garbage pile that peasants keep throwing their trash in and it grows and grows.  Eventually, the ogre will come eat the trash, and then you have to worry about a stronger, uglier oger with a bigger, bulgier tick.  So [and Rachel will like this one] try to keep the trash/accrued interest to a minimum.  Take it out [pay it off] first and keep it low.  Money is actually the ogre's kryptonite and when you throw money at the ogre, it gets weaker.
One thing I don't get is if we need to worry about capitalized interest next or just prioritize the principal?  Because if capitalized interest needs to be paid off first, then the tick actually gives the ogre super powers so you need to attack it first to weaken the ogre.  I know ticks are parasitic, so it's not a perfect metaphor, ok?
There should really be a course in post-graduate finances with a focus on student loans.

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