Story of my Debt

Today I would like to talk a little more about my debt .

My biggest debt to date is my student loan – around $30000. All of this was for grad school. My parents were gracious enough to pay for my undergrad degree at a private school. I chose to go to a state school for my Masters and took out a whopping amount in loans to pay for it. I graduated a year and half ago and I have since then been paying the minimum due on them. While I don’t regret doing my Masters, there are a lot of things about grad school that I wish I had done differently. In retrospect, I could have taken out a much lesser amount in loans – maybe just tuition. I had a part time job to help pay expenses the first year, but I quit soon after since it became too hard work on my academics. However I had worked full-time for 3 years before doing my Masters and I had some money saved up for living expenses. While I didn’t stay in the dorms, I did rent a pretty nice apartment which was fully furnished. I could have lived without the nice end tables and the fancy lamps and just bought some cheap beds and tables from Ikea. But hindsight is 20/20. I graduated and got a job, so I think it’s time to start kicking up the payments to Sallie Mae.

The next biggest debt is my car – a 2009 Hyundai Sonata. I got that during my final semester at school. My old car, a 96 Toyota Corolla was giving me a lot of trouble and it’s upkeep cost me almost $400-500 every month. Everyday I would go to the parking lot, dreading that the car wouldn’t start. By then I had already got a job and impulsively decided to buy a new car. Buying a new car was not a wise decision and I topped it with another stupid move. I took a loan from the dealership for a really high interest rate and stayed on that rate for almost year. Some coworkers knocked some sense into me and I refinanced with a Credit Union for a better interest rate. For the same amount that I was paying the dealership, I got a year knocked off my loan duration. I now owe close to $11000 on my car.

I have virtually no other debt other than these. When I got my first credit card, I went crazy with it and maxed within a couple of months. But thankfully my credit limit was just $2000 and I managed to pay it off quickly. This used to be a cycle for a year or so, until I got sick of it and stopped charging. I am still wary of them, but I use them some time for the rewards. Or to buy that cute dress when there is no money in my checking account but payday is tomorrow! 🙂 But it’s been more than three years since I have carried a balance on any credit card, so I like to think of myself out of their grip.

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8 Responses to Story of my Debt

  1. The book “Total Money Makeover” by Dave Ramsey was an eye opening book for me and I recommend to anyone who has money.

    http://ifiwereawealthygirl.blogspot.com/2009/11/hello.html

    • Ella says:

      Oh I’ve heard of Dave Ramsey, but have not read any of his books. I will try to find this at the library or snag a cheap copy. Thanks for the suggestion

  2. Jessie says:

    I prefer Gail Vaz Oxlade’s wisdom over Dave Ramsey – he’s a little intense for me.

    I think both would agree though, that sorting out exactly how much you owe is a critical step.

    • Ella says:

      I think I will need all the help I can get. Will try to checkout this book too.

      Yes, I need to get some numbers. Right now I just know the approximate numbers I owe.

  3. jolie says:

    I echo Jessie’s thoughts on Gail Vaz Oxlade. She has a great number of tips, tools and resources on her page if you want to check any of them out.

    http://www.gailvazoxlade.com/

    It’s so great that you started. It will be very whirly for the first while, but if you find a system that fits you and you stick with it, eventually it becomes habit.

    • Ella says:

      Wow that’s 2 votes for Gail. A friend said she had her book and would lend it to me soon.

      Thanks for the encouragement. When I look at all the numbers, I really wonder when I would pay them off and if I will ever be debt free.

  4. LBC Teacher says:

    Welcome to the PF blog world! It seems like your debt, while large, is manageable…I am a Dave Ramsey fan in general, but I like to dabble in some other ideas too. I think the trick is finding a way of managing your finances that works for you.

    • Ella says:

      Thanks for the kind words. I am so glad that someone finds my debt manageable! I didn’t think too much about debt while acquiring it, but it worries me a lot now.

      The one thing I struggle with is my budget. I am good at making one up, but I always struggle with implementing it. I always go over. Will write about it in a separate post.

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