Post Holiday Blues

Christmas is now over and all the presents have been given, the food has been eaten. You saw the joy on the faces of your loved ones as they opened the Christmas presents you gave them and it was wonderful!

Now, however, you may be sitting looking at your credit card bill, wondering how you managed to spend that much. Again. You just couldn't let little Suzie or little Johnny down. (Or maybe Big Suzie or Big Johnny!) So, although you have great Christmas memories, you also have the bills to show it.

Last year after Christmas you said it wouldn't happen again. You were going to budget. You were going to buy on clearance throughout the year. You were going to get those debts paid down and yet, maybe time got away, maybe your mind was on other things. So, what to do now? The first thing to do is to put the whip you have on your back down. Let bygones be bygones. Shame has a way of actually keeping us from change and sometimes, ironically, the more we castigate ourselves the less gets done. 

So, shame aside and let's get to what needs to happen. Depending on your income and outgo, you may need to get a second job for a while and pay debt down. If you are worried about what others may think (and this is what keeps many people from getting their finances in order), remember that you don't need to explain anything to anybody! Or, if you feel a need to explain, just remember that 66% of Americans would struggle to pay for a $1000 emergency. There is no need to feel shame about trying to not be one of those 66%. As a matter of fact, it is a reason to give yourself a good old pat on the back! 

There are other ways to get rid of this debt or any debt. You also need a small emergency fund to start so you don't end up putting money on a credit card when you hadn't intended to. $1000 is a good step for a starter emergency fund. Here are some ideas on getting started on this:

1. If you can't pick up a second job you may just do a side gig for a while. Take the talents you have and do a little side work.

2. Sell an overpriced automobile. Many people have a lot of money in their vehicles. Just think of how freeing it would be to sell your vehicle, take the cash left and buy a vehicle outright. You can get many good running automobiles that are reliable for much less than you may be paying now. 

3. If you have enough cash laying around to refinance your home and you have an older, higher interest rate, now is a great time to refinance. Interest rates are low right now and this can make your monthly payments less. However, you would be best off to keep paying the same amount, if you can. 

4. If you have too much house, the market for selling is really good right now. It's not a great time to buy because the market is very hot. But downsizing right now may be a good option for you depending on your circumstances.

5. Another good way is just plain old tightening your belt. Many times people think they can't tighten it further but usually, that's not the case. What are some ways of tightening your belt? 

• Putting a stop to going out to eat. If you feel you need to because of time constraints, the dollar menu at a fast food place is much more inexpensive than a regular restaurant. Also, skip the drinks and get water. Not only will it help the finances but it will help your health and waistline too. 
• Learn to use a Crockpot. Meals in the crockpot taste wonderful and you can make many frugal meals with a crockpot. 
• Buy chicken thighs, dried beans, potatoes. Skip the steaks, prepackaged meals, and expensive frozen dinners. Learn to cook. Not only will you be saving money, you will be healthier, which will in turn save money on doctor bills.
• Shop once a week or even once a month. The more you go to the store, the more you will spend. 
• Instead of buying fancy gadgets, ask yourself if there is an easier, simpler way to accomplish the same goal. Oftentimes, there is. Think of people in the great depression who used what they had. They had a saying "Use it Up, Wear it Out. Make do, or do Without." They often went without, which is something we are not used to doing in today's time. Our culture tells us we must have all these things but that is why the average family has $16,000 in credit card debt at 16% interest. At the regular 3% minimum payment rate, that's $480.00 per month. If nothing else was purchased, it would take 3.75 years to pay it off. The question is, which person do you want to be? The person who works to be different and is maybe seen sometimes as odd, drinking water at restaurants or working a second job? Or the person who is "average" in America? Personally, I don't want to be "average" when it means giving my money to the rich. Change your Think into a Thunk!
• Stop buying clothes for a while. Ask yourself if you really need that new pair of running shoes when you have 3 pair of somewhat scruffy ones in your closet? Maybe a cleaning rag and some shoe shine will do. If you feel good about it, buy used. Some people can't stomach this, but I almost always buy used. My philosophy is "Let someone else spend $50 on a shirt, wear it once or maybe not at all and then I will pay $4.99 for it-which supports a job for someone else and helps the environment as well". Change your Think into a Thunk.
• Find free entertainment. There are lots of things to do for free, hiking, reading etc. Pro-tip: Shopping is not s free hobby. 
• Cut out cable or netflix or anything you are subscribed to that you don't want or need. 
• Look into your home and auto insurance and cell phone company to see if you can these things cheaper elsewhere.
• Eat your leftovers.
• If you have to buy something, buy used.

Think of the things that you really need to spend money on right now. You need: 1. A roof over your head (electricity etc). 2. Food that sustains you. 3. Transportation to your job. We don't need much more than that.

Once you get some of these basic things down you can get that small emergency fund and get rid of that-on average $16,000 in credit card debt. After that, you can work on the next step. 

So, a summary on changing your Think into a Thunk: 

1. Don't beat yourself up for past mistakes.

2. Look for ways you can change things so you have more money each month-either by earning more or saving more or both.

3. Only spend money on what you really need-Food-Shelter-Transportation. 

4. Save up an emergency fund and pay down debt. 

5. If you find yourself feeling like you are comparing yourself to others you see around you who seem to be spending freely, remember that 78% of people live paycheck to paycheck and the average credit card debt is $16,000 and 16% interest. Now do you want to be average? Do you? Change your Think into a Thunk. 

I Am a Certified Financial Coach!

 I have recently become a Certified Financial Coach! I made my first video and uploaded it to YouTube. 

I am taking the blogs off of this site and making them into videos. Without this blog and my readers here, I am not sure where I would start! This has given me a great place to launch from so thank you for reading! I hope you will check out my videos. 

I also have a website here: https://lyohnk.wixsite.com/freedomfc 

Thanks for reading! 

Happy Savings!

Pennies, Pennies Everywhere! Use it Up, Wear it Out, Make it Do, or Do Without

There used to be an old saying "Use it up, wear it out, make it do, or do without!" that our grandparents lived by. In our age of abundance, we have sometimes gotten away from that and sometimes it's good just to have a reminder of what we already know. 

I just used the last bit of toothpaste that I could squeeze out of the tube but I knew there was more still! I took a pair of scissors and cut off the end.

   

    

I can usually get about three more teeth brushings out of a tube by doing this. 

Another way to use things up is to never throw away soap slivers. You can take the old sliver, which is usually too small to hold and press it into the new bar and by using water as cement, voila! it's easy to use up all of the soap from the sliver. 

There are pennies everywhere and when we remember to do what we can to keep them in our pockets, we can save a little every day. 

~Happy Savings!

Pennies Pennies Everywhere! Saving Money on Laundry

There are quite a number of ways to save money doing laundry and if you do all of them, over the course of a long period of time, there is quite a bit of money to be saved!

We all do laundry differently based on our family size, time we have, where we do the laundry etc. I will be sharing a number of tips that have worked for me and I hope that readers will tweak these tips to their own way of doing! 

First of all, make sure you have a full load of laundry. If you do smaller loads, you will use water, electricity and time that you would save by doing the largest loads you can at one time. 

Secondly, unless your laundry is very dirty, use cold water. 

Thirdly, use less detergent. I usually buy detergent on sale, sometimes with coupons and in bulk. I like to use all unscented detergents and they are not always on sale as often as the other kinds which is why I buy a fair amount when I can get the unscented. If you are brand specific, you will not get as much on sale which is why I am not picky about the brand, I just want it to be unscented. I don't use a full cap like they recommend, I usually use 1/2 to a 1/4 of the recommended amount. If you want to be super thrifty, you can make your own detergent and there are plenty of recipes to do that online. 

Fourth, you can hang your clothes on a clothesline and save a lot in dryer use. I don't hang clothes on the line a lot for a couple of reasons: 1. Time and 2. Allergies. I love, love, love sheets hung on the line so I usually do that. But that's often all I do on the clothesline. 

One thing I do to save on drying costs is I always rip my dryer sheets in half. Again, I buy unscented sheets. They are really easy to rip in half and I just do it with my hands. If you are a little OCD and want a straighter line, you can cut them. This means, instead of 40 dries like it says on the box, I get 80. Double the sheets! 

Try not to over dry your clothes. This costs money not only on more energy for more drying but also it stresses the clothing and you won't get as much use out of them.

As always, there are so many ways to save money! Every little bit adds up and there are pennies, pennies everywhere! 

Happy Savings! 

Getting a Bargain: Buy Propane Now

Part of being a frugal shopper is buying when costs are low. We all know how low gas prices are right now and it's too bad most of us can't buy a lot of it! However, if you have a propane tank, you might consider buying propane now. I just ordered a fill for my propane tank. Leased tank prices at my location are .99 and for an owned tank it's .94. 

A quick chart shows some propane prices for other seasons.

2015	2.367	2.360	2.337							1.919	1.939	1.983
2016	2.014	2.028	2.016							2.037	2.062	2.169
2017	2.329	2.442	2.406							2.313	2.399	2.479
2018	2.572	2.572	2.499							2.400	2.422	2.436
2019	2.429	2.431	2.410							1.843	1.952	2.021
2020	2.003	1.983	1.926

Of course, there is no way to know for certain whether prices will go up or down but prices on gas are at historic lows so it makes sense to buy propane right now. 

Some of you may not have a large propane tank but you may have one or two of these around that you use for deck fires or for cooking turkeys or for campers. Now is a good time to get these filled also. 

~Happy savings! 

Change Your Think into a Thunk! Cheap Protein Sources

I have recently read in the news that some beef and pork plants have temporarily shut down because of Covid-19 cases in their workers. This is supposed to be temporary but what that may mean to us is a temporary lack of the abundance we are used to and a potential for a bit of inflation. For some, who aren't able to handle any hike in price or you are simply needing to cut back because you have no income you may be looking for some cheap protein sources. Fortunately, there are a number of them! You don't have to spend $5.00 a pound for hamburger or more for roasts and steaks! Here are some cheaper protein sources: 

Eggs are a great protein source and are quite inexpensive and they are so versatile! You can have them scrambled, poached, boiled or made into an omelet. You can make an egg-salad sandwich. You can make deviled eggs. You can put them in baked goods. If you carry your lunch, which is much more inexpensive than eating out, you can put a boiled egg or two in your lunch with whatever sides you want. At $1.20 per dozen, eggs are only .80 a pound. 

Another great source of protein is beans and rice. You can make beans and rice in a number of different ways. You can make them for dinner and they are also easy to put in a container for a packed lunch, as long as you have a refrigerator and microwave to keep them in. Rice is very inexpensive and quantity buying can make a  difference, but expect about .75 a pound and beans around .80 a pound. 

Dried beans are an amazingly cheap source of protein. You can make Boston baked beans, split pea soup, lentils and a number of other bean dishes and soups. One trick I like to do is save bacon grease from when I make bacon. I freeze it and then put the bacon grease in the beans. This has the tendency to make one feel extra thrifty and makes the dish more tasty. A pound of dried pinto beans is about $1.04 a pound.

Canned fish is a good source of protein and keeps very well. You can buy tuna, canned salmon, sardines and a number of other canned meats like oysters, octopus etc.  A can of tuna like the one below is about .80. 

Refried beans can be used as a substitute for hamburger in burritos or eaten with tortilla chips. A one pound can is about $1.00.

One meat that is very low priced is chicken gizzards. I really like them but not everyone does. I love them fried. They run about $1.39 a pound.

Chicken Leg quarters are also inexpensive at about $1.07 a pound. They are very versatile and there are so many way to cook them. Add some rice and a side of canned green beans and you can create a very inexpensive, filling and tasty dish for very little. 

During this time, it's time to put our creative hats on. When we change our think into a thunk, meaning we change our thinking to fit the challenge, we can learn new skills and make a difference for ourselves, our family and the world at large. Happy Savings and be safe!

Pennies, Pennies Everywhere! Make Your Own Yogurt!

Did you know you can easily make your own yogurt for pennies compared to grocery store prices? I have a yogurt maker and I will show you my process but you don't need a yogurt maker to make yogurt! 

First, you will need starter. This is from my last batch but if you don't have any starter, you can just buy the smallest container of plain yogurt from the store. 

Here is my yogurt maker. The above glass jar is like the ones that fill this maker and I can use them over and over (no trash!)

First, I take about a quart of milk and pour into a bowl. I heat the milk briefly after pouring it into the bowl. 

I add some real cream to mine because I like the thick, rich flavor. 

Then, I add my starter and stir. 

After that, I fill the jars and add it to the yogurt maker. 

I turn it on and leave it for 24 hours. You don't need a yogurt maker but, living in a cooler climate, I like the even heat that gets applied to the yogurt with the maker. 

Once the yogurt is done, I either use it in smoothies or add some jam like this for flavor. 

Here is a link to making yogurt without a yogurt maker. Easy peasy! https://frenchwomendontgetfat.com/recipe/homemade-yogurt-without-a-yogurt-maker/

Happy Savings! 

Springtime Dandelion Greens! Food From Your Yard

Here's a springtime money and health hack for you! Eat dandelion greens! Dandelion greens in early spring are good and good for you. Here is an article on how to find and use dandelion greens:

http://www.moneycrashers.com/eating-dandelions-health-benefits-leaves-greens-roots-flowers/

 Dandelions have calcium, iron, Vitamin C and Vitamin A and Vitamin K.  Here are some dandelion green nutrition facts: http://foodfacts.mercola.com/dandelion-greens.html Dandelions are great for your eyes, containing both zeaxanthin and lutein.

A couple of rules:

• Make sure you know what you are picking! Use online resources so you can compare and know for sure. If you are not certain of what you are picking, take them to your local extension office for verification before consuming.
• Make sure they are not covered with pesticides or other pollutants. 
• Remember you are responsible for what you eat. Safety first! Never put anything into your mouth when foraging unless you are sure you know what you have. This goes for all foods you pick. 

You can cook dandelion greens in a few ways. You can saute them in a pan like in this recipe: http://allrecipes.com/recipe/222744/dandelion-greens-with-a-kick/

I like to take a few like this, and just throw them into a smoothie!

Food right from your yard! Now that is frugality!

Happy Savings!

Stretching a Haircut Between Salon Visits

I'm doing a lot of re-runs here but many of these are so fitting right now. I have stretched my haircuts for years and it is really easy to do. With the salons all closed, you may feel the need for a trim until they open up again. You can easily stretch a haircut without too much courage. There are two pairs of scissors in the upper photo. One is regular hair-cutting scissors and the one next to it is thinning scissors. If you look close, you can see that the thinning scissors have a straight edge on one side and a toothy looking edge on the other. These little scissors are rather amazing, because you can take some hair and think you are going to cut it all off but in reality all these scissors do is thin the hair out. They are pretty neat. I bought these at Wal-Mart. I think they were around $7.00.

So, if you comb the hair with a little mist of water around the frame of your face, hold the hair down so you can see the straight line. Cut with the first pair around the frame of your face about 1/2 an inch or so. Then, take the thinning scissors (if your hair happens to be thick) and thin it out a bit. Take care to thin towards the ends of the strands of hair rather than towards the scalp. This will keep the main shape of the haircut for the most part but it will feel lighter and look better until you get into see the hairdresser or barber and give you a couple of weeks reprieve. If you get a haircut once every 6 weeks, that's 8.6 haircuts a year. If your haircut is around, say, $15.00 (which I do not pay BTW, tips on that later, but I think $15.00 is about average) you will pay about $130.00 a year on haircuts (for one person). If you stretched every haircut an extra 2 weeks that would change to 6.5 haircuts a year for $97.50 for a savings of $32.50 a year. If you did this 6.5 times a year, you would be getting paid $5.00 per time you stretched a haircut. It takes about 15 minutes to stretch a haircut (at the most 1/2 hour). That equates to $20.00 an hour for your time, or at the least, $10.00 an hour, plus the gas and time you saved by not getting your haircut. Multiply $32.50 by everyone in your family that gets a haircut and that's how much you can save per year.

Revision: Apparently I was too cheap. Here are some US averages for haircuts:  http://www.usnews.com/.../28/what-america-pays-for-a-haircut

Happy Savings!

Pennies Pennies Everywhere: Reuse Freezer and Storage Bags

A good way to save some money is to re-use your plastic freezer and storage baggies. I usually manage to re-use mine a few times before throwing them away. I suds them up well using some dish soap and hot water and wash them out well. I then turn them upside down to dry on whatever I have available. Usually that is on top of cups or a faucet handle or a bottle of some kind. There is often a little moisture left in them so I dry them out before putting them away. Depending on how many baggies you use per year, you can save a fair amount of money. If you normally use 100 bags per year, for example, and you buy 20 and re-use them over and over, and you normally pay 99 cents per 20 (which is what I get them for on sale), you can save about $4.00. That might not seem like a lot of money but remember when you save pennies on a little of everything all year long, and do it year after year, it can amount to a lot.

If saving a few dollars isn't a good enough incentive for you, you may want to consider washing baggies out for environmental reasons. According to Ecowatch, "Enough plastic is thrown away each year to circle the earth four times. We currently recover only five percent of the plastics we produce. The average American throws away approximately 185 pounds of plastic per year.Apr 7, 2014"  There is so much plastic thrown away, it really is quite tragic. A great thing about frugality is that it usually has further reaching effects than just your personal purse-strings. This is one reason why frugality is such a great concept.

Here is an article from Mother Jones on washing out sandwich baggies: http://www.motherjones.com/blue-marble/2010/06/washing-out-sandwich-baggies-waste-time

I re-use plastic baggies over and over and have not had a problem. I just make sure they are clean. However, there comes a point when I do throw them away. It is not recommended to re-use discolored baggies or baggies that had meat or oil in them for food use. Use common sense when re-using baggies.

Here is an article about re-using plastic baggies in ways other than putting food into them if you still want to use them after you feel they are no longer food safe. http://www.huffingtonpost.com/2012/09/06/reusing-plastic-bags-tips_n_1859303.html?slideshow=true#gallery/248738/0

Happy Savings!

Pennies Pennies Everywhere: A Use for Bread Crusts

So, I admit that some of these are resurrected older posts. But they are just so timely right now! Since writing this post, I have gone gluten free. And since then, I hate throwing out bread crusts even more because a loaf of gluten free bread runs about $5.00! Even so, in this time of wanting to save money and for some, simply not wanting to go to a store, here is an idea for older bread crusts:

Don't you just hate throwing out bread crusts? There are many uses for them and here is one:

Tonight, I made sloppy joes, but instead of buying buns for the sloppy joes, I toasted bread crusts! After the bread crusts were toasted, we loaded them up with pickles, sloppy joe sauce, cheese and onions. They can be eaten either by picking them up or cutting them with a fork.

Other uses for bread crusts are using them with chicken gravy, mini-pizzas or some people like making bread pudding or stuffing with them. To make with chicken gravy, just toast the bread and make a chicken gravy with meat to pour on them. To make mini-pizzas, simply top with tomato sauce and cheese and any other topping you may like and broil. To make stuffing, you will need to cut up the pieces. Here is a recipe for stuffing https://www.spendwithpennies.com/easy-stuffing-recipe/

A few pennies here and a few pennies there all add up to dollars, not to mention not having to go to the store. 

Happy Savings!

How to Stretch a Chicken: 5-6 Meals Out of One Chicken for 3-4 People

Here are 5-6 meals out of one chicken for 3-4 people. 

Day 1: Meal 1: Roast Chicken. Yum Yum! This is so easy to make with a couple of baked potatoes and side veg. I usually make extra potatoes for leftovers.

 Day 2: Meal 2 Leftover Roast Chicken and Potatoes. Heat and eat.

Day 2 or 3: Meal 3 Chicken sandwiches for lunch or dinner! Add whatever you want, lettuce, mayo, cheese etc. Another option is using tortillas and making enchiladas.

Day 3 or 4: Meals 4 and 5 Chicken noodle soup with all the meat left on the carcass.

Everything that didn't go into the soup went into the pot. I will boil this on low for about 4 hours and make bone broth. I will strain out all the bones and skin etc. I usually just drink the bone broth, it is so good for you! (Can be used for a meal 6 or be used for the soup stock as well.)

None of this chicken goes to waste! There should be enough soup left for tomorrow night as well. The bone broth can be frozen into cubes for later soup if desired.

Last but not least, scraps for the cats.

Pennies Pennies Everywhere! Save Money on Milk

In these times, many people are looking to stretch their dollars or soon will be. There is a very easy way to stretch your milk dollars. When you buy a gallon, after you pour the first couple of glasses out of it, simply fill it back up with water and shake. If you buy whole milk, it would be like the first two glasses are whole milk and the next two, closer to 2%. 

A number of years back, I stopped using cow's milk. Before I did, I added water to every gallon to stretch it. I saved a lot of money that way. You can hardly tell the difference if you get the ratio right and it tastes just fine! 

In recent years, for health reasons, I switched to almond milk. I also added water to that and saved money there as well.

If you don't like or want almond milk and want to make your own homemade "milk", you can make oat milk.

You just put some water and a small handful of quick oats in the blender with the other ingredients, blend and voila! It works perfectly and amazingly it is MUCH cheaper than almond milk!

If you want to make oatmeal milk that is strained, you can follow this recipe or the many other variations of recipes online:

http://www.godairyfree.org/recipes/oat-milk-recipe-vegan

There are so many ways to save money. There are pennies, pennies everywhere!

Happy Savings!

Why is There a Student Loan Bubble of $1.5 Trillion?

Many people are upset that so many have such crippling student loan debt. In 2018, the Federal Reserve estimated that there is currently $1.5 trillion in unpaid student debt. For many, the answer is to cancel student loan debt and give free education, but is that really the answer? I think we should take a look at how we got here to try and decide where to go next.

1. In 1965 with the Higher Education Act, guaranteed student loans began. This was originally supposed to be a compassionate act, giving lower income students a chance for a higher education and a better life. There were, however, unintended consequences. Back when the Act was created, there were a lot of factory jobs and people could earn a decent living with factory work. But students were pushed towards college, being told that that was their best prospect for their futures. Many students began going to college and guaranteed student loans made it possible.

2. Like it or not, education is a business and demand drives prices. The demand caused by guaranteed student loans caused tuition to rise at an artificial inflation rate-8 times faster than wages. More and more jobs are requiring more and more degrees and credentials. What used to be on the job training for many jobs now requires college and what used to require 4 years now requires 6 or more. This works for colleges because this creates more enrollment and revenue. This works for employers who can hire someone who knows the job right off the bat and they don't have to worry about and pay for training. I personally remember when many jobs did not require a degree. The higher the masses are educated, the more jobs are requiring more and more education. Again, this works for colleges and employers. They say "It's for the kids!" But is it?

https://www.forbes.com/sites/camilomaldonado/2018/07/24/price-of-college-increasing-almost-8-times-faster-than-wages/#77c4c2bc66c1

https://fee.org/articles/how-government-guaranteed-student-loans-killed-the-american-dream-for-millions/

3. As the market became saturated with people with college degrees, the degrees themselves became worth less. You can now graduate with a great deal of student loan debt and not have a very marketable degree or skill. In 1937, just 15% of people went to college and they were from upper-income families. Today, nearly 60% of US jobs require a higher education. But which came first? And why is that so? We can talk about technology and progress but when colleges are incentivized to educate and people are lining up to be educated and the loans are guaranteed to come through, there is a great deal of reason why this has happened beyond technology and progress. Higher education can be required for less skill and easily so.

So, what happens now, if we forgive student loan debt and make education free? Aside from the fact that people took these loans out of their own free will and some used them for much more than education, if we look at what happened by making education available to more people by student loans, we can compound this by giving free education. First off, nothing is free. The "free" education will be placed on the backs of every tax paying American citizen in the form of higher taxes. More people will go to school. Taxes will go up higher. Colleges will expand. There will more more demand by employers for education. Employers, who are business people, will be using the taxpayers to train people for them thereby cutting their costs for training. With more credentialing, there will be more government control over every facet and area of business and the ability to keep those credentials will be controlled by the government which will in turn control the businesses that hire the credentialed people.

When we talk about more taxpayer funded programs, I tend to think of Guaranteed Student Loans and the Affordable Housing Act (see my blog https://www.blogger.com/blogger.g?blogID=985068716432181218#editor/target=post;postID=1369778497875336379;onPublishedMenu=allposts;onClosedMenu=allposts;postNum=1;src=postname). Both programs were well intentioned with disastrous consequences. Our present debt to GDP ratio is about 106.9%. A study by the World Bank found that countries whose debt to GDP ratios are higher than 77% for long periods experience significant slowdowns in growth. The debt to GDP compares a country's debt to it's gross domestic product. When we can pay our interest on the debt, the country is considered to be "stable". A debt to GDP of 106.9% makes me uncomfortable to say the least. You know how they say when you are flying, if there is a problem to put your own mask on first before you help someone else? Although education in general helps GDP, what happens when jobs require a 4 year degree when they really shouldn't? What happens when every job needs an "education credential"? What happens when people get educated at taxpayer dollars for degrees that are not marketable? And I believe this to be the route of guaranteed students loans and how we arrived at the student loan bubble and I believe this will be made worse by free higher education.

https://www.thesimpledollar.com/investing/college/why-you-should-consider-trade-school-instead-of-college/

https://www.investopedia.com/terms/d/debtgdpratio.asp

https://www.nasdaq.com/articles/15-trillion-student-debt-bubble-about-pop-2018-06-12

The 2008 Housing Bubble Burst

Many people know that a lot of people lost their houses and a lot of equity in 2008 but they have no idea how it all really happened. Many people blame Wall Street and some blame the poor that defaulted. I think it was a combination of a lot of things that made the perfect storm. As I see it, there were 4 key things that happened.

1. Clinton signed the repeal of the Glass Steagall Act of 1933. 

This act separated investment banking and commercial banking. This kept banks from taking undue risks with people's money and acted as a firewall and was instituted after the Great Depression. In 1999, Clinton repealed this act. This repeal consolidated many investment and retail banks. This opened the door to take larger and greater risks with people's money.

2. Wall Street Derivatives

Once Glass Steagall was repealed, this opened the door for Wall Street to create derivatives. The banks would loan money to people who wanted a mortgage. The banks would sell the mortgages to Fannie Mae. Fannie Mae would bundle these mortgages and sell them.

https://www.thebalance.com/role-of-derivatives-in-creating-mortgage-crisis-3970477

3. Government Forced Banks to Loan Money to People who were Underqualified

An act called the Community Reinforcement Act forced banks to loan money to people who were underqualified, wanting every American to own their own home. The Affordable Housing Act also required Freddie and Fannie to meet government quotas to where at first 30% and then eventually 55% of the loans they bought had to be had to be made to people at or below the median income in their communities. Banks who would normally reject loans to certain people were not allowed to "discriminate" to would be house buyers over what they deemed arbitrary and outdated criteria-namely, income level, verification, credit history etc. Combine this with guaranteed loans by Fannie Mae and Freddie Mac, and banks were forced to have irrational lending standards. The nice goal of "wanting every American to be able to own their own home" became disastrous.

https://www.forbes.com/2008/07/18/fannie-freddie-regulation-oped-cx_yb_0718brook.html#749afe08364b

https://www.theatlantic.com/business/archive/2011/12/hey-barney-frank-the-government-did-cause-the-housing-crisis/249903/

4. Poor People Defaulted on Loans

People defaulted on the loans they were given when their interest rates reset. People were given low interest loans to start and when their loans reset with a higher interest rate later on and they couldn't afford them any longer, they simply stopped paying the loans. This caused a domino effect as more and more people stopped paying their loans and defaulted. This is when the housing bubble burst and more and more houses became available on the market. As supply became abundant, housing prices fell and many people lost equity in their homes (at least in the short term). People who sold at that time lost money and many who bought at that time did very well.

So, what caused the bubble? Can we blame just greedy Wall Street? I don't think so. When banks are forced to loan to under qualified people, banks can hardly be blamed for doing so. I think we need to make sure that the right regulations are in place. We need reasonable firewalls to keep investments and commercial banking reasonably separate and we need to allow banks to make reasonable loans to qualified people.