WORST COLLEGE MONEY MISTAKES FEATURING ERIC FROM FINANCES WITH FAMILY
College life is complicated and with so many changes going on in our lives at the time we begin college we often feel lost and confused. We must choose a major, pay for college, learn to do many things on our own that we have never done before and finance it all with very little money and time. If only we had a magic wand or three wishes from a genie to help us through these many obstacles. Well I don't have a magic wand or wishes to grant, however I have something that can be beneficial to help you through this trying time. I have asked some other great bloggers to help me create some posts to hopefully help you recognize and avoid some errors we all make. This series will provide you with some short stories of times where we made a financial mistake in college that you may be able to learn from and hopefully we can help you prevent some of the same mistakes. If you are like us and have made some of these same mistakes as well at least maybe it will help you to realize that you are not alone in this journey towards financial freedom. Even with mistakes like these you can turn your financial situation around and begin to build a brighter future.
During my time in college I took out $26,000 in student loans. Of that I spent $18,000 on my education and $8,000 was spent on food, fun and travel. It was reckless and my unfortunate introduction to debt. Soon after taking out my first student loan, I opened my first credit card. It came to me in the mail and had a limit of $500! I told myself that I would only use it for every day expenses such as groceries and gas.
Soon I was spending money I didn’t have until my card was maxed out. I opened another credit card through my bank in order to pay off the balance on the first. This time I had a limit of $3,000 and soon it too was maxed out. I had put myself into an endless debt cycle and it was about to get worse.
I started taking out cash advances to pay down my cards. Now I was stuck. Relying on cash advances to help pay my bills each month. It wasn't too long before there were a couple missed payments on a few bills. I needed some new income and fast and at the time I wasn't allowed to work overtime. The smart thing to do would have been to pick up a second job. However, me in my infinite wisdom decided to take out the maximum amount I could at a second payday lending company ($600 dollars in the state of Michigan). I then took it to the casino! I ended up winning which was one of the worst things that could have happened.
I was able to pay my bills for about 2 months using this method until that fateful day that I ended up losing. Now I couldn't pay my bills and I now owed money to 2 payday lenders, 2 credit cards, 4 student loan, and now my gambling losses! One of the biggest eye opening experiences I had was when my heat was shut off in the dead of winter. I had put on 4 layers of clothes just to stay warm. You know it's really bad when you can see your breath in your own apartment and eating half a package of ramen noodles to make them last. Was this the wake up call I needed?
In order to make headway, I moved into a smaller apartment that was about $300 less a month. I had opened a 3rd credit card to pay my bills so I could use my check to pay off the payday lenders, put my student loans on financial hardship, and started chipping away at my other debts until I was at a comfortable level of balancing my expenses. It was exhausting. After moving into my new place, a friend and I decided to get away from our problems and go on vacation. Only I didn't have any money to do so. However, I had recently found out that you could borrow money from your 401k. Can you guess what I did next. Withdrew $3,500 from my 401k and went on vacation of course.
If I were to do it all again, I would have never gone in debt. Knowing what I know now, I have robbed myself of time, effort, and money. To this day, I do not carry any debt and have a credit score of ZERO. I am able to purchase things with ease and never spend more than I make. My fiance and I are teaching our little boy to stay away from debt and will teach our future kids as well. The only good that did come from my experiences is my expertise on what not to do, and the creation of my passion to teach others! Don’t follow my example and stay away from debt!
Thank you so much Eric for taking the time to share your story with us today. As you can see the choices we make in life and our mistakes can either break us or make us who we are today. Eric has overcome the challenges that he experienced and the bad decisions he has made by going on to start his amazing website where he helps others learn to deal with their finances.
You can also check out Eric on:
Twitter @financeswithfam
Instagram https://www.instagram.com/financeswithfamily/
Facebook https://m.facebook.com/financeswithfamily/
If any of you have a story that you would like to share about your own college money mistakes please feel free to leave a comment a short story below or tweet your story to me @savingjoyfully You do not have to be a blogger either and I may possibly feature your responses in an upcoming blog post to share your story with my readers.
