EP45: 100k Dollars Debt After College?! Money & Finances in Germany vs. USA

Josh was back in Cincinnati for two weeks, so we got to record a couple of episodes in person 🥳(We recorded them in the wrong order though so you'll hear us talk more about his visit in the next episode!) What are YOUR experiences with money and finances in Germany, the US, or another country? Let us know in the comments!

Feli: "We don't use checks in Germany, it's so outdated" Faxgerät: "Let me introduce myself!"

I have a funny anecdote to tell about checks: When the checks in Germany were rather new, my grandfather (GF) went to a store with his father (GGF). GF pays with a check. When they just about to leave the register, GGF begins to yell (in lower german): "You haven't paid!) Cashier: "He has paid." GGF: "He hasn't paid!" A manager or so came along a said to GGF: "He has paid." GGF: "No, he hasn't paid. He just gave her a slip of paper."

It's no longer true that looking at your credit score lowers your credit score. A hard inquiry will lower it, which is when a lender is approving you for a loan. A soft inquiry is you checking your credit score, which will not lower your score. I think there was some change in the law and it may not have always been this way, which led to the myth that you should not look at your credit score.

I think that the attitude to money is as much about your own upbringing as your home country. I was brought up (in the UK) in a very 'economical' household (not much money, trying not to be in debt) and acquired my parents' conservative attitude to money (make it last and plan for the future), whereas my brother took the same upbringing and acquired the attitude that once he was independent he would not deny himself things that he had been denied during childhood. Now in our 50s and having earned probably the same amount in total, I own my home and a car and could stop working well before I am due to begin receiving any pensions; my brother rents a room in a friend's house, owns a motorbike, has zero savings and will need to work right upto (if not beyond) his pension eligibility, BUT his life has been more interesting. That is the difference between three decades of carefulness and three decades of 'live for today'. I don't think either of us really hit the sweet spot! I sometimes think I could afford to do more today (buy a bigger house, get a new car, have a nice holiday) and my brother sometimes thinks it would be nice if he wasn't always on the edge of a debt precipice. If it were possible to wind the clock back, I think both of us might take a more moderate approach. The lesson I would take from this is: do what feels right for you, but take responsibility for the outcome and try to not have any regrets.

Alaska used to have a really sweet student loan policy. If you came back after graduation to live in the state, they would forgive 10 percent of the loan for every year you lived in the state up to 60% forgiveness maximum. As I planned on coming back anyway, that was no penalty.

Germans can have student debt, as well. But not for tuition fees. If your parents cannot support you financially, you are applicable to money from the state via BAFöG to maintain yourself. At my time, the (1990ies), 5 years after my studies I had to return half of it without interests(!), either by installment or paying all in one pay. The latter option actually reduced the loan by a third. So, in the end, I ended up paying about € 9,000, for a five years mathematics degree plus a year abroad in England. I am still very thankful for it.

Cool episode. Not everyone in the United States goes to college/university, however. Some go to a public trade/tech school, some stay with the job they were working in from high school, and other people join one of the branches of the military. I would like to see an episode about how each of you view your own country's military and the other person's. I think that would be an interesting discussion for the podcast. Thank you for doing these podcasts. They are informative and entertaining. Keep up the good work!

The worst thing about paying for groceries with a check is that it's always a semi-confused little old lady who doesn't even get her check book out until all her groceries have been bagged. Then she needs to find it in her oversized zippered multi compartment purse, then roots around for a few more minutes to find a pen, finally the cashier offers her a pen and she then tries to find a place to set down her purse and proceeds to write the check on the tiny table extension (provided I guess, for that purpose), Asking the cashier at least three times what the amount is, and then still trying to verify the amount by looking at the terminal without her reading glasses. Finally, she tears it out and hands it to the cashier, waits for the receipt to be handed to her, which is then put into a separate zippered compartment in her purse, along with the pen the cashier handed to her. She then digs out the pen and gives it back, apologizing profusely and at length and finally starts to gather herself up to leave.

I had been out of college and working a steady job for a couple of years when the bank where I had my checking account included a flyer in the monthly statement announcing they were now offering BankAmericard credit cards (Now Visa) and inviting us to apply. My girlfriend, who was just graduating, got the same offer. We both applied. A few weeks later I got a rejection letter. The reason I was rejected? I had no credit history. So I called to appeal, explained that they could look at my checking account history (never overdrawn) and see that I paid everything on time. Meanwhile, my GF heard nothing. The guy on the phone said they would reconsider my application. A few more weeks went by and we both got our credit cards in the mail. Her's had a higher limit than mine. She had not yet started working. Credit in the US is crazy. But using it to purchase things we can't afford is baked into the US economy and encouraged by the banks, the product manufacturers, and the government.

the "east coast" finance thing is definitely a thing. never heard of the alternative "harassment" pronunciation. Lived in Georgia, Illinois and Pennsylvania.

Great episode, thank you both. Some comments: 1. Maestro-Cards (ref. in Germany often as "EC-cards", but this is very outdated) will vanish I think end of next year. Mastercard - the company behind this type of mainly European system - ends its service. So they will be replaced by "real" Visa- or Mastercards (mostly as debit-cards I would think, since Maestro is somehow nothing else). 2. The acceptance of creditcards here is very low, because it was extremly expensive for the shop owners in the early days. 3-5% of the revenue were much to much to use this system esp. in small shops. This was legally ended some 10 years ago, but it is in our German minds till today (what a stupid mistake from the creditcard companies and the banks). 3. I still get checks till today in Germany. Very rarly, but I cashed in my last check in the middle of 2021. And it was not that easy, since I only use onlinebanks :)

Interesting discussion; I enjoyed listening to it. Cool seeing you sitting at the same table again.

In Argentina checks are mythological, debit card is king, and quite a number of ppl use credit cards. Also cash is used about as much as debit cards. No one here's ever heard of credit scores outside american press. Higher ed is also free, health care isn't but is affordable.

I find talking about this motivating.. thank you, im half german and seeing how they work to earn the luxuries is a good method of finances!

‘Leben in den USA’ Typ: “You never know how long you’ll live... spend your credit now! Me: Save your credit for emergencies ... you never know how long you’ll make a living! Hey guys, you mentioned the German tendency to purchase only what one has saved up for. And you even used the word “Schulden”, but, surprisingly, didn’t explain that this word means not only “debt” but also “guilt’ or “shame”. I think this fact perfectly underscores your point about the German distaste for spending outside of one’s means. On another note, rather than the name "Understanding Train Station", might I suggest: "Beyond Train Station"? After all, isn't one of the goals of this great channel to help your viewers move beyond the absolute basic understanding of the language and culture of Germany?. And, finally, Feli, might I also suggest a name for your other channel, one that’s closer to the old title "German Girl in America", that you wrongly lost in your copyright struggle: "Bavarian Girl in America”? Thanks to you both for the wealth of insights that you offer with such intelligence and charm!

Feli's sitting on the left again, classic Understanding Train Station episode! 🙆‍♀️

So true about the lack of contactless payment options at a lot of US stores! Up in Canada it's much more mobile ('don't worry, I'll bring the machine to you!') and universal to be able to tap to pay. Even so I've found my "contactless" US debit/credit cards don't work well here - I have to hold them to the machine for quite a while and even then they won't always tap, whereas my Canadian cards rarely have any issues. It really is strange!

Americans who are smart enough to keep their debts low or paid off are the ones who will truly be better off in life. I don't necessarily mean having a great deal of personal wealth, although we know that that can happen for some people, I mean being able to live well, not having to worry about having bills to pay you can't afford. I've learned in life that if I keep my debt down, and keep the personal debt to a minimum, it has made life much better, that is with a lot less worry.

I think a good expression is "A single tear" for what you were thinking.