My Debt Story: How I Ended Up With $62,000 in Debt

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.AnOctober 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

 

 

 

 

 

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48 thoughts on “My Debt Story: How I Ended Up With $62,000 in Debt

  1. Colleen

    It’s great how candid you are! I love how your paid for “luxuries” as a kid….my dad made my brother and I buy the family TV in the 90’s! :)

    Reply

    1. Amanda

      Thanks Colleen. I think it’s smart when kids pay for the things they use.

      Reply

  2. anonymous

    THANK YOU for sharing this. It’s very honest and explains a lot – most of us 20/30-somethings can relate.

    Reply

    1. Amanda

      You’re very welcome! Hope it helps :)

      Reply

  3. Liquid

    You must have bought a pretty sweet ride by the sounds of it :) Thanks for sharing your debt history. $62K isn’t too bad. The average debt to income ratio in Canada is 163% so for someone making between $30K – $40K a year, this is a normal number :0) There’s nothing embarrassing about having good debt, which is most of what you have :D I’m surprised how quickly you were able to pay down your car loan since 2010. Keep it up! Do the same with your student loans, and you’ll be debt free soon enough ;) And congrats on your 100th post ^_^

    Reply

    1. Amanda

      Thanks Liquid! Good to know that I’m “average” :)
      It’s a lot easier to pay down my car because I don’t have a choice. It’s a pretty nice car; I’m glad I got it but I should have waited at least a few more months to have a bigger downpayment.

      Reply

  4. Janine

    I like how you just layed it all out, put the cards on the table. I feel like sharing your numbers will proably make you more accountable for your debt and hopefully allow you to pay it off faster!

    I look forward to watching your debt diminish – good luck and happy 100th post!

    Reply

    1. Amanda

      Thanks Janine!
      It was scary to actually calculate it all… It was a lot worse then I thought, but at the same time, I had NO IDEA that I was once over $80,000 in debt until I put this post together. Paying off $20,000 of that feels amazing!

      Reply

  5. michelle

    i cant wait to follow you through this journey. i love reading your blog!

    Reply

    1. Amanda

      Thanks so much Michelle!

      Reply

  6. Erin @ My Alternate Life

    Good for you for putting it all out there! I’m planning on coming out of my debt closet in December and I’m terrified.

    Congrats on being part of the blogosphere for a whole year and on 100 posts! You’re doing great :)

    Reply

    1. Amanda

      Thanks Erin. Good luck with coming out with your debt! Everyone’s super supportive (as I’m sure you already know and expect). :)

      Reply

  7. CeCe @Pink Sunshine

    Very interesting read. I’ve always been fascinated the decisions that people make in regards to money. I know it’s not pretty to be in that much debt but I have definitely heard far worse. And it sounds like you did very well with not piling on the consumer debt at least. Education and cars are things that are considered investments or necessities.

    Reply

    1. Amanda

      Thanks Cece. I don’t really “regret” anything, but I know that I could have done it a lot better (and cheaper). Here’s hoping I’ve learned my lesson!

      Reply

  8. Hayley @ A Disease Called Debt

    Thanks for sharing your story Amanda! I know that you’re well on the way to getting things sorted out now. :) I love the fact that your posts are so real and you don’t try to hide anything. Your outline here of how you got into debt is what a lot of people will identify with I’m sure. Your younger self was so sweet saving up for the dishwasher fund by the way!

    Reply

    1. Amanda

      Thanks Hayley. I sometimes worry about being so candid, but that the same time – if I’m going to do it, I’m going to do it right!

      Reply

  9. Dear Debt

    Good job on “coming clean”. I’m rooting for you and you are doing great. Sounds like things have gotten much better and will only continue to get better! Keep it up.

    Reply

    1. Amanda

      Thanks! I knew I had to do something “big” for my 100th post, and considered hosting a give away, but that would make me a bad PF blogger :)

      Reply

  10. Drop that Debt

    I really like the way you laid this post out — very easy to follow, entertaining, and a great way to learn your story! Good luck with everything :) I can’t wait to read more!

    Reply

    1. Amanda

      Thanks so much! I’m excited to actually have progress to report on :)

      Reply

  11. Laurie @thefrugalfarmer

    Thanks for sharing, Amanda! Your story sounds LOTS like ours, at least from the “stupidity” level. :-). It is great though, to have had that wake-up call, isn’t it? What a great story you’ll have to share, too, when the debt is gone!

    Reply

    1. Amanda

      Thanks Laurie! It’s amazing how smart people do stupid things, isn’t it?

      Reply

  12. Tonya

    Thank you for sharing your story, and that’s quite a story. And although many of us are smart, we all occasional make less than stellar financial decisions. It’s just part of life. Glad you found a job you love that pays well too!

    Reply

    1. Amanda

      Thanks Tonya!
      I always thought I “got this” money/personal finance thing, but now I can clearly see how so many of us fall into the debt trap!

      Reply

  13. Friday's Fab Links #15 | A Disease called Debt

    […] from My Life I Guess explained how she got into debt in her post: My Debt Story (and 100th Post!). I really like how Amanda tells it like it is and I’m sure lots of people will be able to […]

    Reply

  14. Eva @ Girl Counting Pennies

    Thank you for sharing your story, Amanda. I wrote a similar post some time ago and it was not an easy one to write! It honestly amazes me how much education costs these days! I was lucky enough to get my education paid for by the government but I could’ve easily been in a similar situation. I am glad that you are working hard towards becoming debt free, and with your determination and hard work you will be debt free in no time! Keep up the good work! :P

    Reply

    1. Amanda

      Thanks so much, Eva!
      You are really lucky to have your education paid for! It’s really a flawed system to start off your adult life in debt like this. One paycheck at a time, it will be gone!

      Reply

  15. anna

    Thanks for sharing such a personal story with us, Amanda. I’ve thought about sharing my own, but have always been embarrassed and didn’t really know how to outline it. Your format and courage is compelling, that I might try to emulate it. Looking forward to reading the rest of your journey out of debt. You’re such a strong person, thanks again for sharing!

    Reply

    1. Amanda

      Thanks Anna. That’s so kind of you to say!
      It can be embarrassing, but everyone has been so supportive. I was more concerned about anonymity, to be honest. I found laying it out in this format made it super easy for me to “fill in the blanks” and keep it legible. If you decide to share your story, feel free to copy!

      Reply

  16. Daisy @ Add Vodka

    Yikes, that’s a lot of debt! Stick with paying it off, and take it one month at a time. There are so many bloggers that had a lot of success in paying off large amounts of debt by opening up the flood gate and admitting to the debt.

    Reply

    1. Amanda

      Thanks Daisy. I’m hoping that having a a much clearer number will help me get rid of it!

      Reply

  17. DC @ Young Adult Money

    I really like how you laid out your debt accumulation by various times in your life. My wife and I essentially took on all of our debt during college, when tuition was too high for us to pay for it ourselves (this also was before we were married, I should point out). We’ve been working really hard the past couple years to build up savings, but it’s really tough with a big debt load (as I’m sure you can relate to). At the very least I figure we’ll have a story to tell people and I definitely feel like living with a lot of debt and paying it down will make me a better person. Wow, a pessimist looking at the positive in things, that doesn’t happen every day ;)

    Reply

    1. Amanda

      Haha – yes, it’s funny how debt can be a “good” thing, isn’t it?
      Laying it out like this was the easiest way for me see flat out that all of my debt was accumulated within a 7 year span (all around university and shortly thereafter). Hopefully I’ve learned my lesson!

      Reply

  18. Tara @ Streets Ahead Living

    I do have to say that it’s amazing to read stories like yours to people like me who also went through the same, holy shit I don’t have enough money to pay the bills years. I know with your new job you can do this!

    I’m supposed to be on a more significant payment on my loan method but have not been able to do that quite yet because of too many dang weddings this past fall but like you I’m hoping to save a significant portion of my paycheck this month and the months following. :)

    Reply

    1. Amanda

      It can be so hard to make bigger payments when “life” gets in the way. But who misses a wedding because they made an extra payment on their loan? And now with Christmas approaching, that “extra” money is going to go quickly…

      Best of luck!

      Reply

  19. Holly@ClubThrifty

    I’m sure it’s hard to admit you have that much debt…but you’re making progress! Glad you like your new job!

    Reply

  20. Blair@LifeDollarsandSense

    New reader here. It can be very scary to share you true debt numbers (trust me I know). You have an inspiring story with many lessons to share. I look forward to reading about what life holds for you next.

    Reply

  21. Little Miss Money

    I know how it feels to put your debt out there in print! There’s no denying it anymore, but it kinda feels like you’re ready now to tackle it with all the strength in you. I recall wanting to do some Kung Fu moves that day :) Congratulations with this 100th post, and for making it such a remarkable one!

    Reply

  22. Abigail

    Congrats! And I automatically love any blog post with a Fresh Prince reference.

    Reply

  23. TJ

    What made you hate theatre? Did studying it ruin it for you?

    Reply

  24. Tracy

    wow…thanks for sharing this honest post…wish you all the best!

    Reply

  25. Tammy Dalley

    Wow what a great post, thanks for sharing!! Everyone has debt and sometimes it so hard to admit it, hope everything works out for you! :)

    Reply

  26. ms.

    Wow, this is really comprehensive. I like how you broke it down by era. Are you going to update this page as you head into 2014?

    Reply

  27. Jane Hammill Gray

    What a great post very inspirational as this situation is so common it is so easy to get into debt but not so easy to get out of it huge thanks for sharing!

    Reply

  28. Tara Gauthier

    Thank you for sharing your story. I am lucky in that my ability to save money as a child has continued into adulthood. I have actually had to learn to relax it a little in order to enjoy life and not be so worried about solely saving money. Glad to see you are getting things turned around.

    Reply

  29. yahoo search

    I couldn’t refrain from commenting. Very well written!

    Reply

  30. Morgaine

    Just found your blog. I made so many financial mistakes in my 20s as well and spent the better part of my late 20s early 30s cleaning it up. I just got to debt free this year after 5 years of trying to pay it all off and its so worth it in the end. You’ll get there one day too! :)

    Reply

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