Here's an email I recently received from a reader:
As a college freshman, I went crazy with student loans. Although I received a scholarship to attend my college of choice, I was still 10,000 dollars or so short. The total annual tuition for my college was approximately 44,000. In an attempt to close the gap, I took out private student loans except not just for 10,000, but for the maximum that was allowed to me: 30,000. I did this several times. Why? As I sit here, I attempt to find an answer to that question, and the only thing I can say is, I tried too hard to keep up with the Jones’ way of living. My school was full of affluent students who drove Bentleys and Mercedes Benz….and not just one, but multiple cars. I had a beat up old Jeep and I couldn’t stand that I wasn’t fitting in. Seeing as I wanted to spend 4 years there, I decided the best thing to do was to keep up with the pack by getting as many student loans as possible, relying on the fact that I would be able to pay them back on my own schedule (big mistake) later on down the road.
In the end, I totaled $265,000 in student loans (about 56,000 went towards the actual tuition/school). The rest went into paying rent in a place that I had no business staying in as a freshman, sophomore, junior or senior! I spent money making payments towards my Mercedes Benz ML500 and just going out with people I thought were my friends (money changes everything). Adding insult to injury, I ended up using credit cards to fill in the gaps whenever my student loan money ran out and I had to wait another two or three weeks to get another one. When I finally snapped myself out of this utopian nonsense, I realized just how much debt I was in. Armed with only a bachelor’s degree, I was $265,000 in student loan debt, most of which was private.
To make matters worse, the school I attended was for business. Do you know what I do for a living? Well...what I did until I lost my job due to a drunk driver hitting me....I was a State Trooper.
I love my job. Believe me I do; however, never in my wildest dreams would I have seen myself making this career choice. My salary was $41,000 starting. My overtime helped me rake in approximately $70,000 per year. Considering the fact that I had to work 60-70 hours a week, it wasn't the most attractive thing in the world, but it brought in extra cash to help me formulate some type of a plan to attack this debt.
I am almost done with eliminating my credit card debt (I have approximately $12,000 to go---it used to be $23,000). I will begin paying on these loans in a few months. The minimum payment will most likely be upwards of 1800-2100 dollars per month. Now that I am unemployed, I have a problem..
Therein lies the problem….
I guess what I’m asking for is advice….seeing as I am now very much aware of my mistakes and am making an earnest effort to turn everything around. I want to get my Roth IRA fully funded this year. I have the right mindset. I know that now. It’s unfortunate I didn’t have this mindset before college.
What should I be focusing on without completely deteriorating my quality of life? I know I have to pay for my mistakes, and I will; however, I’ve exhausted my brain and I need a new take on things.
If you would, please feature this on your site as I want other people to learn from my mistake. It’s easy to get sucked into the whole keeping up with your neighbor thing. If anything, I may get the satisfaction of knowing I at least prevented someone else from making the same mistake I did.
Any advice to a 23 year old just beginning fresh would be greatly appreciated.
What advice do you have for him?