If I were in Jane’s shoes, the current situation would significantly change my economic outlook. My expenditure would be on the most important and urgent things at the expense of those that are not important. For instance, I would join an affordable college and drop out of Freedom University, which due to the circumstances, is no longer affordable.
Serving as financial power of attorney in such a situation, I would make executive decisions regarding the settlement of the most urgent debts or loans. Delay in making payments for borrowed loans would result in an increase in the amounts because of accrued interest on the same (Looney and Yannelis 4).
A poor decision made by Jane was that of joining Freedom University that she could not afford without her parents’ financial input and having to get loans. A wise decision made by her was to drop out of Freedom University and making steps towards settling the loan debt she created by joining the institution. The poor decision she made can be proactively avoided by always staying within one’s budget constraint (Greenlaw et al. 28). Jane can best handle the current circumstance by working hard at her part-time job to settle the financial needs at hand. Her short-term goal should be getting adequate finances to cover living expenses. Her long-term goal should be rejoining an affordable college to continue with her education and achieve future career objectives.
Many students make the wrong decision of attending a school they cannot afford because of the lack of economic knowledge (Greenlaw et al. 10). Students must be aware of the concept of “opportunity cost” where they are forced to give up comfort and luxury for something that can be of value and benefit to them (Greenlaw et al. 29). With a technical college education, one can be aware of what is important and what is not important from a financial perspective thus giving attention to the important thing at the expense of what is not important.
People hardly prepare for worst-case scenarios as highlighted by how many people spend on luxurious and less important items at the expense of the most basic ones that can help save money for the future. Many students are not equipped to enter into the workforces and handle major responsibilities as they are still focused on comfort and luxury both of which come with increased costs
Greenlaw, Steven A., et al. “Choice in a World of Scarcity.” Principles of Macroeconomics, 2nd ed., OpenStax, 2018.
Greenlaw, Steven A., et al. “Welcome to Economics.” Principles of Macroeconomics, 2nd ed., OpenStax, 2018.
Looney, Adam, and Constantine Yannelis. “A Crisis in Student Loans?: How Changes in the Characteristics of Borrowers and in the Institutions They Attended Contributed to Rising Loan Defaults.” Brookings Papers on Economic Activity, vol. 2015, no. 2, 2015, pp. 1–89., doi:10.1353/eca.2015.0003.