Meet Paul – Chapter 3: Paying off student loans 

Transcript

Text on screen: The Financial Consumer Agency of Canada presents Money Break: A series on financial wellness, Coffee Edition

(A photo shows a home surrounded by trees.) 

Text on screen: Paul Foster | Poppa Bean Coffee Roastery

Chapter 3: Student loans, savings and financial well-being

(Coffee beans spin around inside a coffee roaster on one half of the screen. A coffee mug with the slogan “I turned coffee into a job” appears on the other side. Hands pouring coffee beans appear in the top left of the screen. Paul Foster sits on a stool inside his garage with an industrial coffee roaster in the background.) 

Paul: When I finished school, I had crazy amount of debt. The goal for me was to get out in front of the debt, get more financially independent, and then start saving. 

When you’re in school, you’re convinced that you’re going to get a good job, you’re going to be able to make a good living, and you’ll be able to get on top of it really quickly, and it’s no big deal because, in relation to what you’ll make, you’ll be able to get out front under it really, really simply. 

(Students walk on the campus of a post-secondary school then graduates wearing caps.) 

Paul: When you realize that it’s not that simple, when you realize that the social-economical situation that you’re in changes, that becomes a real big “Oh, my God!” 

Debt has to be paid off as aggressively as humanly possible. When I’m talking about debt, it’s harmful debt, like student loans. It’s done its purpose. It’s got you educated. Its purpose is done, it’s got to be paid off quickly. It means that you can move on to your next stage of life, which is savings.

(A worried young woman looks at a sheet of paper.)

Paul: Debt doesn’t go away. It’s something where you can’t just handle it. You have to actually live with it, and you have to figure out how to get on top of it. Bad debt, in my mind, is anything that exceeds your ability to pay in a reasonable amount of time. 

When you’re out of debt and you’re able to start saving and strategize for doing that, it means that, hey, I’m not going to buy that car right away. I’m on that bus for another year, and I will save that money for the car, and I can buy the vehicle that I want. If I have to ride the bus a little longer, then maybe by the time I go to buy that car, it might not be the same car you originally wanted to, because you knew how hard you worked to save for it. 

(Hands hold dirt with a small plant growing. Water drips through the hands watering the plant.) 

Paul: That’s where the second phase would be the savings aspect. It forces you to look at your priorities, and it gets you in that position where you have options and you have choice. 

Thirdly, I’d tell people to look at their life of borrowing as entire spectrum from early as you can to when you forecast yourself being able to retire. As an employee, it’s what will I need to do to be able to maintain the quality of life that I have now and be able to take that into my golden years.

(Paul smiles at the camera.)

Paul: My name is Paul Foster. This was my Money Break.

Text on screen: Money Break  

Music credits: “Acid Trumpet” by Kevin McLeod [incompletetech.com] | “The Lounge” from Bensound.com

(The Canada wordmark appears.)

Off-screen voice: A message from the Government of Canada.