Personal finances: My biggest money mistakes

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I’ve made a lot of financial mistakes since I turned 18 and was responsible for my own money. There are a few that really make me cringe and have impacted my financial future more than others and I’d like to talk about them here in case you can identify with them.

Some of these mistakes were made unintentionally, but some of them were truly just bad decisions — putting short term happiness and gratification over having a financially secure future.

Here are my four biggest money mistakes:

Taking out a personal student loan to study abroad: All student loans are awful, but the one that seems to just be salt in the wound is the personal student loan I took out when I took a three-week trip to Thailand the summer after my sophomore year of college. The trip cost about $8,000 and I definitely didn’t have that kind of money lying around to pay for it out of pocket. Of course, the professor played up the importance of taking a trip like this and how I could probably get a student loan to cover it. So, my inexperienced 19-year-old self marched right to the financial aid office and got approved for a $8,000 personal loan through a private bank—not through the government which is what many student loans are through. I wouldn’t learn until after graduation that the loan had been accruing interest for the last two years of college totaling a whopping extra $3,000 to the loan’s total. I JUST NOW am back down to the original principal balance. It’s taken me EIGHT YEARS to pay off $3,000 in interest because the interest still accrues daily. There is also no option for an income-based repayment or any kind of relief or help. Personal student loans have no protections. So, if I could go back in time and not take out that loan I would. I’d really like that $85 I pay on it every month.

Being irresponsible with credit cards: There are some people who can pay off their credit card balance in full every month and never know the anguish of carrying a balance—I am not one of those people. I never have been and I accept that I never will be good with credit cards. I have no self control when it comes to credit cards. Even though I rationally know that I shouldn’t use them for frivolous purchases I have continued to do it all throughout my 20s. It started first with a couple of store credit cards which I racked up and paid off several times before closing them. Then it was a credit card through my bank that I racked up and paid off many times before closing. I actually went about two years with no credit cards and then I opened one when I moved to Pittsburgh…and then another…and then another. I’ve been battling the balances ever since.

Not having a savings account: I know to some people this will be the most shocking mistake of all. I have literally never had a savings account. I just never made it a priority. I always just wanted to spend every dollar I made and honestly never really thought about preparing for a secure financial future. I’m trying to fix that now and start saving more so I don’t depend on credit cards when a big expense comes up.

Not contributing to a 401K or IRA from day one: My first job out of college paid $20,000. My paychecks were about $600 every two weeks. After making all of my bills I barely had enough to survive. I even went without health insurance for the same reason (this was before Obamacare was instituted). I never really had anyone to give me advice or talk with me about how important contributing to a retirement fund is. Now that I’ve explored the topic on my own and have an employer that matches my contributions I have started putting money into a 401K. I feel so behind, but I know I can make it up by contributing a lot more once my debt is paid off.

I’m really enjoying writing about this and I hope you find it helpful in your own money journey!

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Personal finances: This is where I begin

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I’ve wanted to write about this for a while because it’s a huge part of my life, but I just haven’t had the courage to put it all down. I really enjoy reading and learning from other people’s personal finance journeys, so I wanted to start sharing my own in the hopes of accountability and inspiration for others in a similar situation.

My personal finances are, let’s say, less than desirable. I’ve always worked two jobs and paid all my bills, but I’ve never been someone who saves and I just now, as in less than a year ago, started to contribute to my 401K. I also have a lot of debt, both student loans and credit cards. I’ve basically spent my 20s living paycheck to paycheck and charging things when I ran out of money.

I know a lot of people my age (I’m nearing the end of my 20s) are in the same boat. Some people are much better off than I am and some are much worse off, but I think a lot of us millenials have found ourselves somewhere in the middle. We aren’t quite destitute, but we definitely aren’t thriving. I think the statistic is something like most Americans don’t even have enough money saved for a $1,000 emergency.

I graduated from college in 2010 with about $30,000 in student loans. I paid diligently on my loans for three years until I decided to go back to graduate school in 2013. Then they went into deferment for the next two years while I was racking up another $30,000 in loans for graduate school.

Clearly, not the best laid out plan, but I was determined to go to graduate school and move to a bigger city. You can read more on my graduate school journey here. I can’t say it was all for nothing because I got a job that literally doubled my salary after going to grad school. I also plan to use my advanced degree to teach down the line.

And as always, hindsight is 20/20. Would’ve, could’ve, should’ve doesn’t really do much for me now, which brings me to this post.

There’s no sense in looking back and wishing things would have been done differently. What’s done is done. Now, I’m just focused on getting out of debt and to financial freedom.

So, this is where I begin. It seems impossible some days, but other days I’m so motivated to just commit to paying it off. I’m following a modified version of Dave Ramsey’s debt snowball method as well as taking some advice from a few other personal finances books.

Thanks for following along!