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.

    • 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.

    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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