October marks my one year anniversary of discovering this wonderful personal finance blogging world! As if that wasn’t enough to celebrate, WordPress also tells me that this is my 100th post!
To mark these momentous occasions, I thought it was high time I got real with you guys. As a pseudo personal finance blogger I’ve never really disclosed my debt numbers before, or explained how I got myself in this situation. I’ve alluded to it, posted percentages, etc. but I’ve never flat out admitted before that…
I am $62,000 in debt.
Wow that’s embarrassing (yet somehow also liberating) to admit!
The good news about my debt is that it’s all (so-called) “good debt”. But the even better news is that this number was over $80,000 only a couple of years ago!
So this is a story all about how
my life got flipped, turned upside down I got myself into this situation.
1983-1997: THE CHILDISH YEARS (age 0-14)
I don’t have a lot of memories involving money as a child. I knew that my family wasn’t rich, but in my small town I didn’t really consider any one to be rich. I’m sure my parents had money issues, but I don’t ever remember feeling like I was missing out on something because of it, or feeling like my friends were better off than I was.
When I asked my family to help jog my memory, my younger sister said: “You always had money when I didn’t. Lol. You definitely managed money better than I did.” And it’s true. I have vivid memories of taking my pink bank book to the bank, filling out a deposit slip and depositing my money as often as I could.
It was pretty easy for me to save money growing up. My small town had no malls, no fast food, no movie theatre or hang-out spot. I spent most of my money at the corner store on penny candy and teeny-bopper magazines.
But my sisters and I were pretty ingenious children if I do say so myself. We all hated doing the dishes, so we gave up our allowance to start a dishwasher fund. Once that was paid for and installed, we continued to sacrifice our allowance for this really cool new thing called the Internet.
Debt Amount: $0
1997-2002: THE HIGH SCHOOL YEARS (age 14-19)
Although I was pretty good with saving money, I was also lazy. I babysat a lot but my only other job was a short stint as a cashier at a grocery store.
When I was 16, we moved to a big city. My new high school’s population was the same as my hometown. Instead of saving up for University like I should have been, I was no longer babysitting and was now exposed to malls and fast food.
My grades were pretty good and I probably could have secured a few grants and bursaries, but again, I was too lazy to even apply. Instead, I had to ask my dad to pay my residence deposit for me because I couldn’t even afford that.
And so my debt story begins…
Debt Amount: $0
2002–2007: THE UNIVERSITY YEARS (age 19-24)
One of my first acts as an adult was to sign my financial freedom away with one simple student loan application.
After a bad first year, I changed my major to theatre. Which added another year and another $10,000 or so to my debt. Second year was a lot better. I landed an awesome work study position that turned into a permanent part time job in academic support. (Spoiler alert: I now hate theatre and work in academic support.)
My natural instinct to squirrel my money away still held true.
While I did spend a ridiculous amount of money in bars and restaurants over my university years, that was (and still is) my only problem area. I worked during the school year, and spent every summer scooping ice cream and/or wrangling children. I lived with 2 to 5 other girls in student housing close to campus, so rent was low and transportation was free. And I had a pretty basic desktop computer and a crappy cell phone. The only non-family trips I took were paid for by my sorority dues. (Which were very affordable and worth ever cent.) I rarely went shopping, and when I did I paid in cash. My credit card only saw the light of day when I needed to book a train home for Christmas.
When I finished my degree, I had about $10,000 sitting my bank account.
Unfortunately, saving money was about as financial savvy as I got. That $10,000 sat in a plain old bank account. It earned 8 cents a month in interest instead of working it’s magic for me, or being used to pay off some of this debt. And then I foolishly decided to stick around for a sixth year of school and blew through that money in less than 6 months.
Debt Amount: $41,500
(100% student loans)
2008–2009: THE “I MOVED BACK IN WITH MY PARENTS & TOOK EVEN MORE SCHOOLING FOR SOME REASON” YEARS (age 24-26)
The end of 2007/beginning of 2008 was a pretty crappy time in my life. I didn’t end up finishing that sixth year. Instead I moved back in with mom. I became a full time unemployed couch potato, while waiting for my post-grad program to start in the fall. Yes, you read that right. Instead of looking for a job, I decided to take yet another year of school. Apparently 5 and a half years of post-secondary education wasn’t enough.
I did go back to scooping ice cream over the summer, and briefly worked in retail until my grades started to suffer. Thankfully I was living with my dad and was able to quit working and focus on school instead. I had no money and even less of a social life; it was not an exciting point in my life.
Debt Amount: $53,000
(100% student loans)
Summer 2009: THE SUMMER OF MOVING ACROSS THE PROVINCE & ENTERING THE REAL WORLD (age 26)
Turns out that being a hermit paid off. The teachers in my post-grad program told us from day one that finding a job in the arts was going to be next-to-impossible and encouraged us to start looking early. So I did. And long story short, I had moved across the province and was working in the exact field I wanted before graduating.
I had used the little money I still had saved to fly to the new city to find an apartment and the rest to pay for the 1,500km move. And since I had no savings and hadn’t actually started working yet, I immediately put $2,500 worth of new furniture on a store credit.
Text book example of what not to do.
Debt Amount: $55,500
(95% student loans, 5% consumer debt)
March 2010: THE MONTH WHERE ENTITLEMENT GOT THE BETTER OF ME (age 26)
After only 7 months of full-time employment, I bought a car.
When the bank wouldn’t give me a line of credit to buy a used car, I went to the dealership, asked my dad to co-sign the loan, and a week later I was driving around in my shiny brand new $25,000 debt-mobile.
You’d think that someone with 6.5 years of post-secondary education would be smart enough to realize that it’s a bad sign to be turned down by the bank. Instead, I convinced myself that getting a part time job meant that I could now afford my new car. It didn’t really occur to me that I would have to keep working this second job.
Seriously, someone needs to do a case study on how financially stupid I was…
Debt Amount: $80,500
(66% student loans, 31% car loan, 3% consumer debt)
March 2010–June 2013: THE “I WORK 60+ HOURS A WEEK AND STILL CAN’T PAY MY BILLS” YEARS (age 26-30)
It’s well documented in the previous 99 posts on this blog that my last job sucked. A lot.
I was working 60+ hours a week between two jobs where I was underpaid, under-appreciated, and still not able to get ahead. And I did this for almost 4 years!
(I realize that the whole car loan/second job thing was my own stupid fault.)
In this time, I had paid off my furniture to avoid being charged hundreds of dollars in interest. I was paying down my car loan each month because they made me, but I was hardly paying anything towards my student loan. I was continuously put on Repayment Assistance (in which they provide an affordable monthly payment based on your income, interest is covered by the government, and payments made go directly towards the principle), so there were big chunks of time where I was paying back nothing.
In these four years after graduation, I had only paid back about 5% of my student loan.
Debt Amount: $63,500
(79% student loan, 21% car loan)
Summer 2013: THE BREAK DOWN (age 30)
For those of you that are new here or simply needed a refresher, the stress finally caught up to me and I more or less broke down this summer. I was put on medical leave from work, which was the best thing for me mentally and physically, but not so much financially. I was able to collect sickness benefits which helped a lot. But I still put a $2000 dent in my already too-small savings, stopped paying off my student loan, and had very little hope for my financial and employment future…
Debt Amount: $62,500
(80% student loan, 20% car loan)
September 2013: THE F*CK THAT! MONTH WHERE EVERYTHING CHANGED (age 30)
…But you regular readers and/or stalker of mine will know that things completely turned around for me last month! I started a new job that I’m loving and that pays me oh so very well. For the first time in my adult life, I actually have money left over at the end of the month. I’ve been squirreling it away once again – but I’m much wiser now and I’m putting it all into a TFSA. Oh, and I now also have health benefits and a pension.
Debt Amount: $62,000
(80% student loan, 20% car loan)
October 2013–Unknown: THE FUTURE
This is where I really wanted to announce my anticipated Debt Free Date, but I honestly have no idea when that will be.
My new job is only a contract position and I may find myself unemployed in the spring. I’m hesitant to “spend” this money on extra debt payments, so I’m putting it all in a TFSA. If/when my contract is renewed, the plan is to pay off the balance on my car loan as quickly as possible, and then make bigger student loan payments. Hopefully that will allow me say goodbye to this student loan debt for good!! (But I’m sure by the time that happens I’ll just be swapping out these debts for a mortgage and tiny mouths to feed instead…)
Anticipated Debt Amount: $0
Amanda Kay, an Employment Specialist and founder of My Life, I Guess, strives to keep the "person" in personal finance by writing about money, mistakes, and making a living. She focuses on what it’s like being in debt, living paycheck to paycheck, and surviving unemployment while also offering advice and support for others in similar situations - including a FREE library of career & job search resources.