I first got into debt at the age of 16! Almost 15 years later, I had finally come to the conclusion that debt isn’t necessary. I know it sounds common sense but millions of people haven’t grasped this concept. And, though we are constantly inundated with news that it is necessary—it isn’t. I didn’t consider my debt as bad as the average person, but it was still debt nonetheless. Unfortunately, inexperience and a series of poor financial decisions taught me that hard truth about the importance of financial management.
At 16, I purchased my first car and I took out my first loan. It was the cutest 5-speed Nissan 200SX that I happily zipped around town in. I was happy until the expense of owning a car became a burden.
Lesson Learned – I should have saved my money and bought my car with cash. When you are working a part-time job in high school, paying for car repairs, a car note and gas was extremely taxing to a meager income. Thankfully, my car insurance was covered, so that was one less bill I had to deal with.
Today, I drive an old Ford Explorer that I paid cash for through eBay back when President Obama was inaugurated, the first time. Sure, the locks act up, only half the A/C works, the speakers don’t play in the rear and it has a host of other trivial issues, but it is solid and reliable. It doesn’t have to be the latest and greatest it just needs to get me from one place to another safely. Mission accomplished!
EDUCATION - UNDERGRADUATE
At 17, I had the choice of going to one university on a partial scholarship, and another with no scholarship. The second university didn’t offer any money, but I thought its prestige would be advantageous after I graduated (or, so I thought). I decided to go to the school with more prestige, knowing what I know now, I certainly regret the decision. To finance my education, my mother and I took out loans to cover the $14,000 a year tuition. Ouch!
Lesson Learned – If I was going to start at a four-year university, I should have gone to the school that offered some money and been more aggressive pursuing scholarships. Though I ultimately wish I’d taken transferable classes at a community college the first two-years, and finished my degree at a four-year school. Loan repayment began in 2006; I deferred twice thereafter, and if I paid the minimum I wouldn’t be finished paying my student loans until 2022!
EDUCATION - GRADUATE
With a college degree, I was struggling to find a job with a decent salary to live on. I figured going to graduate school would make me more competitive and increase my job prospects. Instead of going to school for something I enjoyed, I primarily went back to school to make more money, so that I could improve my livelihood.
Lesson Learned – If you are going to gamble make sure the cards are stacked in your favor. I’ll admit I went into graduate school without fully thinking it through. I was too stuck on a fanciful outcome of a better salary as opposed to the realities of my situation. More education does not automatically equate to more money. I still hope to use my degree to teach, but what I expected and what actually happened after graduate school were polar opposites. And, I took out more loans to finance graduate school, which only added to my overall debt. If I were to do it again I would have looked for employers who offer tuition remission and, again, pursued more scholarships.
Shortly after I got my first job out of undergrad I decided to buy my first property. I was following the housing trend, and my real estate agent was like family so I couldn’t lose. I jumped head first into a mortgage without doing the proper research or planning. I was stuck on, “It’s a buyer market. Now, is the time to buy!” And, having a killer real estate agent how could I go wrong? The answer VERY WRONG!
Lesson Learned – Don’t follow costly trends unless you know what you are getting into. Within six months of buying my property, my mortgage was under water. All my efforts to resolve the issue amicably were fruitless and almost 10 years later I am still dealing with the fall out. Also, if you decide to do business with family or close friends really question their intent and abilities to carry out their part. You do not want strong personal relationship ruined over business dealings. All in all, I can accept responsibility for the situation I put myself in because I was young, inexperienced and too eager when I bought my first property. What a heavy price to pay—literally!
Thankfully I have always been pretty good with my credit cards. Though there were times when I was less financially secure and relied on my credit cards for the day-to-day living. My credit card limit was very low by credit card standards, but for me, I often carried a high balance. This was due to only being able to pay the minimum and/or having to use it regularly. To be honest, it was upsetting only being able to pay $25 on a $500 credit card balance. It seemed like an endless cycle where I could never pay off the credit card.
Lesson Learned – It is best to pay off credit cards in their entirety every month. If I couldn’t pay it off I paid as much as I could. This helped to reduce my principal balance and the interest I owed. Now, I only use my credit card if I can pay it off before interest accrues, or if I don’t have enough money to pay for a necessary item with cash in that moment. In the world of credit, cash is king!
I have gone through my share of trial and error with managing my finances, and there is still a lot of room for growth. But, thankfully, I’ve learned from my mistakes and I am making better decisions today because of it. Hopefully, the lessons I’ve learned can help you too.
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HI. I'M AWET.
A simple soul who likes to engage the world in meaningful ways in the hopes of inspiring others.
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