It’s All My Fault

As an adult in debt that is not related to absolute necessity (i.e. medical debt), I am fully aware that my debt is my fault. Not my parents’ fault because they didn’t tell me what to do with my money, not my school’s fault because proper financial education was not required, and not the big bad credit card companies’ fault for giving me credit when I was young and irresponsible. Mine.

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At the age of 18, we are officially declared adults. We can vote, smoke, have holes drilled into our bodies, and obtain credit with little to no income. I did all of these things. With this power comes great responsibility (thank you, Uncle Ben!). Adults are in charge of themselves. Therefore, whatever happens to them is directly influenced by the way they choose to live their lives.

Sallie Mae did not hide the fact that I would eventually owe the money I was borrowing back with interest. Neither did Visa. They gave me paperwork that laid this information out, and I signed it.

I am in a heap of debt. While it’s frustrating sometimes, the one thing I don’t do is play the victim. If you blame everything and everyone around you and do not take responsibility for your debt, you are essentially saying “I am not an adult. I am a child who ate too much candy and got a tummy ache.”

Grow. The. Fuck. Up.

If I may quote a movie (and I may because I’m the one writing this), “Stop feeling sorry for yourself. Okay, ‘cause I don’t associate with people who blame the world for their problems. Because you’re your problem Annie, and you’re also your solution.” If you don’t know which movie this came from, we probably can’t be friends. It’s not personal, I just really can’t associate with people who don’t watch awesome movies.

Own every decision you make in adulthood. You should be proud of and/or learn from every single thing you do. When I get mad about my HUGE amount of debt, it’s at myself. No one else spent that money for me. No one else over drafted my checking account like twenty times freshman year. No one else decided to max out my credit card buying spray paint. I did ALL of it and I own it. Because blaming it on someone else would be me waving the white flag to adulthood. It would be saying, “I can’t make my own decisions”. It would be the easy way out and I would lose all respect for myself.

So please, stop blaming:

Your parents

Your teachers

The economy

Marketers

Credit card companies

Banks

God/Allah/Buddha/Satan/Nature/Dave Ramsey/Me/Whomever or whatever the hell you believe in

You’re your problem. And you’re also your solution. Decide today to own your life.

Wanna save money? Get married young!

Truth time: 80% of the reason I decided to write this article is because I knew Bridget would go into stat overload when she saw it. I know, I know. There is a 50% divorce rate, that percentage increases for younger couples, yadda yadda yadda.

(Bridget: ….. lol, Erin.)

In my introduction post, one reader pointed out that I am the youngest writer on the site but the only one that is married. While more of my peers are getting engaged and married now, it was not normal when I got married at the tender age of 20. From a purely statistical standpoint, getting married at such a young age is a terrible idea. (Right, Bridget?) However, it does come with some serious financial benefits.*

- Financial aid. If your parents make a decent income but aren’t helping you with tuition, you get screwed over in financial aid. I didn’t have an issue getting loans (evidenced by the $40,000 of student loan debt I managed to accumulate), but grants were much harder to come by. As soon as I got married, financial aid was based solely upon mine and my husband’s income. Two college kids aren’t really flush with cash so I started getting the maximum amount of grants. If only I didn’t take out additional student loans to pay for…whatever the hell I blew them on.

- Double the (meager) income. College students do not make anything much. But when you go from one meager income paying for your crap apartment to two meager incomes paying for your crap apartment, it really does make a difference. Same goes for utilities, cable, Internet, what have you. Aren’t roommates the same thing? No, because unless you are super close you will need extra space, i.e. a second bedroom. Which costs extra money. Also, they get mad when you eat their food. I prefer the “what’s yours is mine” relationship that can typically only be found in committed relationships.

- Taxation. When you are making the salary of one adult combined but claiming the exemptions of two, your tax liability is slim to none. It’s beautiful. While popping out children young can also be beneficial for tax purposes, I don’t recommend this as a way to save money (to the dismay of my mother and MIL). I’m not sure if you know this, but the cost of a child actually outweighs the $3,800 exemption. I’m pretty sure that only pays for like three weeks of diapers…

So that’s my financial advice for the day to you young college students. Just get married!**

Did you get married young? Do you have any additional financial benefits to share? Everyone else: share your favorite “raining on someone else’s parade” statistic!

*I am well aware that marrying young can come with a host of downsides as well, many of which are financial. But in a world of hyper-responsible PFers, I wanted to offer the rebel perspective. Because let’s be honest, we aren’t always going to make our decisions based on statistics and plenty of us “irresponsible youngins” turn out just fine.

**Please do not get married young just because you want to reap the financial benefits or because I’m your idol and you want to be just like me. Marriage is kinda a big deal and should not be taken lightly. Unless you are a celebrity, in which case it’s not really a big deal. Go nuts.

Bridget: remember this:

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Gillian : An Introduction

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’ve made over $5,000 in extra payments towards my student loans

While I regularly keep track of how much I put towards my student loans, I sat down recently to calculate how much I was actually required to pay. My student loans entered repayment in March 2012, but I’ve been throwing money at them since September 2011. The result? I’ve paid nearly $5,000 more than I had to:

um.. wow!

I spend so much time looking at how much further I have to go ($15,000+! GAH!) that it’s easy to forget how far I’ve come. Five thousand dollars is a lot of money, and to think it’s money I could have spent instead of put towards debt makes me feel just a little bit proud of the self-discipline it took NOT to go on a spending spree.

I mean, let’s be real here: there’s a lot things I would love to buy for $5,000.

  • Another 3+ week European vacation.
  • A new iPhone and maybe pre-pay my cellphone bill for the next oh I don’t know, six years!
  • A car! Yeah, I said it.
  • Some income generating stocks. How lovely would it be to see $5,000 become even MORE money?
  • Louboutins. Why not? Imma get 4 pairs!
  • Seven iPads! BECAUSE I CAN!

Ok well maybe I wouldn’t do all of those things but another jaunt in Europe and maybe one iPad sure does sound nice. I probably wouldn’t get any Louboutins unless I find them in some discount designer consignment shop, but it’s nice to dream!

Student Loans: Making It Automatic

I did something a little crazy last week: I made my aggressive student loan payments automatic. Since my provincial student loan was already automatically deducting $97.29 from my account every month, I decided I needed to make the Federal loan payment automatic too — except at nearly 5x the minimum required payment:

OH YES I DID.

Why? Because after being an awesome debt attacker for 8 months, I started to burn out. I didn’t want to put money towards my student debt, I wanted to buy dresses and go out with my friends. Last month I didn’t come close to what I was putting towards my debt in all the months prior. Experiencing minor debt fatigue this early in the game could mean that I was sacrificing too much, but I really think it just means I need to kick my own ass.

I scheduled 8 payments of $502.71 from just next week until January 2013.

Why $502.71? Because my provincial student loan is $97.29/mo and my OCD personality needs to see an even $600/mo go towards debt or I experience intense anxiety all day long. I decided to stop in January 2013 for a few reasons:

  • I will still try to make extra payments when I can, paying down the balance even faster.
  • I can’t predict right now how much I’ll owe at the beginning of 2013, but I’m hoping it’s small!
  • I don’t want to schedule payments past that deadline because I might end up over-paying OR worse, I’ll feel unmotivated to pay extra because I’ll let the automatic payments just go through.
But as for now…

$600/mo x 8 mo = $4,800 of COMMITTED debt repayments

Srs debt biznez happening here! I feel like I need to change my relationship status on Facebook. I am married to my debt I won’t be cheating on it with the mall anymore until I see this through.