I stand (okay, I sit) here before you a university graduate roughly $60,000 in student debt. I know, this number seems astronomical. And let’s be real, it is. Let me explain the story of how I came to be in such a financial mess…
How it happened.
Although I was smart, I was the typical head-in-the-sand high school student who felt like the real world was miles away. I did not have passion towards any area, but excelled in my accounting classes and felt that I could make a good living doing this. I decided to go to a decent school close to home, and went off on my merry way.
I quickly realized I did not want to be an accountant. Ever. I was still very unsure about everything. I have always dealt with anxiety, but at this point did not know what was “wrong” with me. All I knew was that I dreaded school and had panic attacks doing things as simple as riding the bus to school. I mentally broke down, and left school by the end of November. One semester’s tuition and an entire year of rent (my landlord was not understanding at all) left me my first $5000 in debt.
I worked through a lot of my anxiety issues, evaluated what I wanted out of life and decided to go to school for something I truly enjoyed: fashion merchandising. The next Fall I headed off to college. School went a lot smoother for me, but living in Toronto cost a LOT. My two-year program cost me $25,000.
While in college, I realized that I wanted university after all. I attended university for marketing management. It was truly enjoyable and I am happy with my choice. Tack on the final $30,000 in debt.
I was a complete idiot with my finances. I made very little money in the summers because I could not usually find full-time work. I had a problem with spending. I knew I was majorly in debt but I thought I could easily make $50,000/year straight out of school and pay it back in two years tops. I liked a lot of stuff – M.A.C. make-up, lots of clothing, and going out to dinner multiple times a week. Once summer hit and I had a bit more income coming in, I felt like I DESERVED extra stuff and extra fun.
How I plan to pay it back.
It has been a very harsh reality check realizing that I am making more like $25,000-30,000/year, and am going to need to pay down at least $600/month in student debt to get out of this hole in eight years. It’s tough to look back at the frivolous way I lived, but all I can do at this point is move forward and not ever get back to that place. There are so many things I’d like to do soon; getting married and starting a family are something I’d like to do in the next five years and my debt is holding me back from being able to achieve those goals.
I have already started working to get out of debt by lowering my fixed expenses, cutting back on variable expenses (good-bye clothes, it was nice knowing ya!) and doing freelance work to increase my income. I am trying to be as frugal as possible without over-doing it. I do not want to get debt burn-out since I’ve got quite a few years left of repayment. My goal is to be paying $1000/month (hopefully more!) towards my loan eventually. I’d like to eventually get a better paying day job so I have been taking steps with that. Even though my debt is lowering at a snail’s pace, this is the worst of it. Now instead of shopping, in my spare time I read/write blog posts, budget, figure out better ways to spend (or not spend) my money… and watch Dexter.
I think you will find a lot of people who can relate to your story. Very few of us know at an early age how to budget and spend money wisely. Congrats on your initiative to pay off debt!
Thanks so much ! A lot of young people do not think about the consequences until it’s too late.
Ohhh Dexter! Does it come back on soon? haha.
I’m glad you found something that you like to do and that works for you. Keep on truckin and one day you’ll have the satisfaction of being free and clear of the debt :-)
It does ! Last season though, so it’s bittersweet. Thank you, it will be a long time from now but I can’t wait to be debt-free!
LOL I could never get into Dexter
I share a similar story but with less that $30k in debt. This is only because I couldn’t get approved for more, so I had to work to pay rent when I was in school. We will ge through this! When you get a steady job, you should talk to your bank about a line of credit….their interest rates could be substantially less than student loans!
30k of my debt was in the form of a student line of credit. Once OSAP goes into repayment, if it ends up being much more I will definitely speak to the bank into increasing that line of credit and getting rid of the OSAP loan.
It sounds like a whole lot of people are going to have your same problem. This is a big problem for America and Canada that tuition is so high yet jobs pay so little. At the very least it is very responsible that you are doing something about your situation!
Thanks so much. And you’re right. At university it was $7,000 a year for tuition for me. Even with making decent student earnings in the last two years, I still couldn’t make ends meet when living costs were factored in.
Our stories are very similar! If it makes you feel even an once better I had over 100k debt when I graduated and a lot on credit cards, Good luck it can be done!!! It’s disgusting the cost of a decent education :(
It’s always great to hear about others in a similar situation so that you don’t feel so alone. Way to go on your success ! And thank you.
Welcome Gillian :) I wish you all the best in paying off your debt. You can do it!
My girlfriend graduated with close to 80k in debt from a 4 year nursing school so I know where you are. It is tough but the loans will eventually be gone! And when they are just think of all of the things you can do with that extra money every month!
You’re right. I was thinking today about how I could be putting away so much if I keep a similar lifestyle once I’m done paying down the debt !!
Hi Gillian! I felt like I was reading about myself :) I was totally the same way and just assumed that once I got out of university I’d make loads of money and pay off my debt in no time. HA, didn’t happen. My reality check came about two years ago when I was spending like I was rich even though I wasn’t working and heading back to school. Finally smartened up and became debt free this year. You can too, I know it!
I was lucky to have a family that drilled “don’t take on too much debt for school” into my head, but many of my friends are in similar situations to what you’ve described. Unfortunately, a lot of them are NOT taking control of their finances…
You can do it! It seems slow at first, but those payments will add up, and before you know it your balances will be dwindling away to nothing!
It took me a long time to finally decide to give Dexter a try…but once I watched the first season, I was hooked! I don’t want to pay to watch the last season just once, though, so I’ll wait until the DVD comes out :(
Gotta work Dexter into your schedule no matter what right? Can’t blame you (^_~). You might also like Breaking Bad then. I used a similar strategy to get rid of my student debt, by paying smaller increments first, then gradually bigger payments later on when I made more money. I believe if you make SMART goals you will pay off your debt faster than you planned. You’re on the right track so far, good luck.
Good for you and keep up the hard work. Getting out of debt for most is possible with a plan if you can stick to it and truly want the freedom. I’ve talked to many grads especially since I just graduated and they are in the same boat with lots of debt. Coming out of University doesn’t mean the bucks start rolling in. Everything takes time and experience is also a key factor. Mr.CBB
Its tough to be in debt but hopefully you have found something you enjoy doing. It would be even more difficult to have gone to school for four years, become an accountant and THEN have to start all over. It’s better to make a few mistakes when you are young, you have time to recover.
It is disgusting that an education in Canada is leaving our young people in this mess…..even tho’ some of it was self imposed. Glad to see you owning up to your past missteps.
It is so unfortunate that a good education costs so much money these days. You are off to a good start in organizing your budget and your debt repayment strategy. Sorry you have to deal with it, but I’m sure you will do well.