With silver threads in his dark beard and a late 1970s date on his drivers license, Eric Smith was born on the cusp of two generations: Just barely Gen X, not quite Millennial.
But his few extra years have done little to buffer him from the financial ills that plague Idaho’s 25- to 35-year olds. The 41-year-old and his millennial wife, Kellie, 37, have a mountain of debt, both student and otherwise, and are struggling to save.
They just hosted a gender reveal for their first child together — a boy to be named later — and they own a house in Boise’s North End. But Smith still cannot see a day when he’ll have a life that resembles his parents’.
“What I see from them now is they essentially have zero costs,” Smith said. “They have a phone bill, water bill, power bill. Pretty much that’s it. They’ve been able to do what I’d like to think about doing, sort of retire in peace and happiness and have plenty. Not an extreme amount. But they don’t have to worry anymore.”
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Part of Smith’s problem is structural: He lost a high-paying tech job in the Great Recession. Tuition and fees have skyrocketed since his mother and father graduated college. Prices have risen but wages largely have not, particularly in Idaho, where the minimum wage is an anemic $7.25 an hour.
Part of it is a product of life’s difficulties: A first marriage to which bride and groom both brought tens of thousands of dollars in student debt. An acrimonious divorce that forced the couple into a short sale so they wouldn’t lose their house to foreclosure.
“When I got divorced about five years ago, the only thing we split up was about $85,000 in credit card debt and student loans,” Smith said. “We had no assets whatsoever...I ended up moving into my old room.” At his parents’ house.
And part of Smith’s financial pain is self-inflicted: From his first credit card as a college freshman, which he maxed out at $15,000, to the annual new computers and smart phones he bought on time, Smith had a bad case of the consumer bug.
But during his messy divorce, he said, “I found the secret...Someone put me in a class at church with Dave Ramsey. His whole thesis is to eliminate debt and maintain enough assets to protect yourself from your own issues.”
Ramsey is the author of “The Total Money Makeover: A Proven Plan for Financial Fitness,” and Smith has taken the author’s advice to heart. Today, he and Kellie are slowly saving for retirement. They have what he calls “a zero-sum budget. You have to have every dollar accounted for.”
But they’re still struggling under the “boat anchor” of student loans.
Smith left Rocky Mountain College in Billings, Montana, without a diploma for a tech job during the dot.com boom. He later graduated from Boise State University with a bachelor’s degree in social studies education. Kellie got a master’s degree in hydrology from BSU in 2016.
“I still have $16,000 in student loans now,” said Smith, who is a risk analyst at Scentsy. “And she has $73,000 or something like that. We’ve readjusted some of that for income-based payments, so (payments) are fairly low. But it’s a slow pay-off rate. For us to be completely debt free, it’s more than 10 years, I’d say.”
Smith is so serious about his financial makeover that he is working to instill Ramsey’s principles in his two sons from his previous marriage.
Ethan and Dashiel are required to save 30 percent of any cash they get. Another 20 percent goes toward household expenses. If they want to borrow money from their dad, Smith charges 25 percent interest.
Ethan is 11. Dashiel is 9.