The Ultimate Guide to Making Money

Tell me a story about your debt

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I’m wondering if you can do me a favor. Tomorrow, I’m giving a talk at the Commonwealth Club in San Francisco about debt for young people, and I’d love to hear your stories about how debt has affected you.

How much debt do you have (and what kind)? How old are you? How did you get into debt? How does it make you feel?

Don’t worry if your stories seems depressing or boring or unusual. I really am interested in hearing it, and in hearing your honest thoughts about how debt has affected you. If you can add a comment with as much detail as possible in the comments, I’ll try to use a couple of the stories tomorrow during the panel.

[Update]: The comments people have already left are amazing.

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165 Comments

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  1. indebt College Graduate Link to this comment

    I am 28 years old, working as a Software Developer.

    I have $50k in college loans. ~14,000 is at 4.5% interest and is actually a loan my mother took out for me, that i am taking responsibility for, the rest is at 3% interest. ~$400 a month in payments Payments total . I also have $5000 in credit card debt, paying ~$300/month…but it never seems to go away lol

    My college debt has really kept me from taking on any other major debt, such as a home or even a car loan. I feel like this large student loan hanging over my head needs to be paid before i can take on more debt! $50k in debt makes me feel like i already bought a really nice car…or a really cheap house.

    The loans also limit my mobility and limit my flexibility. I was trying to start my own business, but the loan payments increase my cost of living artificially by $400/month. I also have to keep it in mind when looking to relocate for work.

    The credit card debt bothers me less, as that can go away…yes i may have a stain on my credit for time, but the debt is gone. The 50k loan cannot be removed by bankruptcy…cant make deals to pay less (like i have done in the past with credit card companies) or anything…though it can be deferred for a limited time if you meet the deferment requirements.

  2. I have a mortgage on my house, about 2/3rds of it’s value. I have a joint mortgage on two other investment properties with some partners. I have line of credit and margin debt near $75K that is invested mostly in the stock market.

    I have zero consumer debt. No car payment or credit cards at all.

    I am excited about my debt because it makes me feel like I’m running a business. I obtain capital and try to get a return on it that is higher than its cost. I have developed a feeling about how much debt I can handle. By doing lots of analysis over the years I get a feeling when the ship becomes a little too tipsy. For example, I feel moderately comfortable leveraging real estate and less comfort leveraging the stocks. At some point it becomes too risky: like if a few bad things happened then I would start to lose money. If I can’t handle the downside I don’t do it.

    I hope to get into larger ventures in the future.

  3. outwiththejive Link to this comment

    I am graduating this week with an undergraduate degree in finance. Of course, to get it I had to take on a good bit of debt. I currently have $20k in student loans, $1,500 in credit card debt, and a $12k car loan. Overall, I think my debt situation isn’t too awful. I’m handling the monthly payments well, and don’t feel too much strain as I prepare my budgets.

    One major point: my church has provided many useful tools to help individuals and families deal with financial issues. You can look it all up at http://providentliving.org. In particular, I like the manual called “One for the Money”. It provides some excellent guidance on getting out of debt without bankruptcy or other extreme means. Of course, not all programs work for all people, but it’s a nice place to start.

  4. I used to have quite a bit of debt when I was out of college. Lets just say I was young and stupid: I made quite a bit of money through some internships and also got a lot of student loans. While I squandered my “fortune” away (mostly on eating out and being very careless on where I spend).

    - When I graduated, I had almost $21000 USD in debt.

    - In addition to that, I had almost ~$600 debt in a credit card. Not much, but my foolishness that was to follow made it twice as much.

    - After graduating (2002) the market was at an all time low, so finding a job was almost impossible. I found a job in India and decided to take it since I thought its better to have some relevant work experience as opposed to working odd jobs (the best option ie. highest paying, that I had, was working at a cheese factory outside of Calgary, AB).

    - The money for the minimum credit card payments ran out and it stressed me so much, that, like an idiot, I ignored it. It went into default and I had to borrow to pay (~$1000).

    - If that was not the end, I neglected to find out how many student loans I had (3 in all) and setup auto-pay for only 2. Naturally, the third went delinquent and I had no clue.

    - Then one day, I got a call from a lady with a North American accent. I thought it was for a job offer (this makes me laugh at myself now). She was from a collections agency. My “third” student loan that I never knew about was now due. Great! $4000 was now ~$6000 due and raking up $100 everyday. This was going to be fun!

    - I had to beg/borrow from family to pay this off. (this was Jan 2003, six months out of college and 1 month into being married). Obviously, my credit score was in the dump.

    - This episode served as a wake up call. I was married, in debt, and had no idea about my finances. Something that just seemed unacceptable.

    - Instead of shirking these responsibilities I decided that before I fix anything, I want a clear picture where I stand and make sure I do not ruin anything further. Then I’ll sit and formulate a strategy on how to fix this self-inflicted mess for good.

    - I started with a very simple excel sheet, writing down all the money I owed in detail. I called each and every financial agency I must have dealt with and asked them if my account had any negative balances. This way I could make sure I did not overlook anyone. Next, I wrote down how much cash I have in my India+canada+USA accounts. This gave me a rough net-worth. (Negative of course)

    - I made sure that there was enough cash in my Canadian accounts to pay my loans and enough in my India accounts for emergencies.

    - After coming back to Canada, I started working crazy hours at odd jobs (not the cheese factory, since I still could not find a regular job) to rack up as much money as I could to pay off my debt. It was simply an obsession for my wife and I to end this feeling of being in debt.

    - We were frugal, but happy. Its not like we did not go out or have a good time. We were just very careful and made sure we met our monthly saving and bill payment targets.

    - Soon I got a job in the US and things improved financially. For the first 8 months into my US-job we saved every single penny we could (for example: for those eight months we had a 11 inch black and white TV in our house that my cousin bought for me for $2. The upside was we did not get addicted to TV and hence did other productive things).

    - I paid off my debt in Canada seven months into my job in the US.

    - Since then, my accounting for personal finances has gone from a simple excel sheet to a complex combination of microsoft money and excel. My wife thinks its an obsession. For me, its just avoiding silly mistakes I made when I was young, and trying to make sure we’re never high n’ dry again.

    - My credit in the US is near stellar. I have no idea about my Canadian credit score. I tried to find out through the equifax.ca site a couple of times, but the site is less than stellar.

  5. I am only very recently debt free as of 2 months ago.

    I graduated from college in December of 2004 and had $10,000 in student loans. (My parents helped pay for some of school, and then i worked part time and paid for most of my living expenses).

    When I first graduated, I received a credit card that had 1 year of interest free use. I knew in my head that I should pay off the card in full every month. But with the mental “safety net” providing me false reassurance, there were a few months where it didn’t get paid off in full which kept rolling over each month thereafter. Towards the end of the first year I almost wasn’t able to pay off the balance in full.

    It wasn’t because I had racked up a huge amount of credit card debt (it was less than $2000 that month total, I use it for everything in order to keep track of expenses/ease of use), it was just a sudden realization that “oh crud, I need to be able to pay all of that off next month” I had forgotten about the interest free portion until it was almost too late. I was only able to salvage the situation by going -incredibly- frugal that month.

    Upon graduation I also bought a used car on a $12,000 loan. I focused on paying this off as quickly as possible. Applying most of my commissions check towards this loan (I’m in sales, 66% base salary, 33% commissions). This took about a year and a half to pay off.

    So having learned that lesson about how to manage a credit card, and paying off my car note. I then went about focusing on eliminating my student loan.

    My motivation for doing all of this was becuse I met a wonderful girl who agreed to marry me. Her other wonderful qualities aside, she is a wonderful spendthrift, and had 0 debts, and great financial habits. I didn’t want to bring any of my debt burden into our marriage so I vowed to pay off my student loan before we got married. (I also made sure to pay for the ring in cash).

    I only accomplished this feat by not raising my standard of living much higher than it was in college.

    I’m pretty good about spending, but I was initially a poor planner. And it requires planning and forethought to remain in good financial standing.

    My situation is far better off than most and I still almost got mired in debt.

    I had 10k of student loans (parents paid for the rest, I am very fortunate there)

    I had a 12k car loan

    I narrowly avoided credit card perils. I paid off 22k of debt in just over two years. It was hard. Very Hard. I figure that I have made about 95k since graduation, which is more than alot of people.

    So if I make more than most, and had less debt than most, and it was this difficult to pay everything off… I can’t imagine the dire straights other people are in. My generation needs help. Spread the word.

  6. My husband and I together have $30k in student loans (my half is a government loan @ 3% interest, his half is a loan through his parents at no interest). We’re both of the opinion that our college educations were entirely worth the debt that we’re in, and the monthly payments ($200/month for both) are quite manageable. We were lucky to have help from family, scholarships, and jobs to pay for most of it. I feel fortunate to have escaped the burden that I see so many students going through now.

    As for consumer debt, we have $6k on our used car (6% interest), and a $1000 helper loan through my parents for this year’s expenses (no interest). We have no credit card debt, of which I am very proud, but we do struggle at times to pay off what we’ve put on the card at the end of every month–cash flow can be an issue.

    I think we have as much debt as we can handle at the moment. We’re looking into what it takes to buy a house, but are despairing because of the exorbitant prices around us, even for a modest 2-bedroom cottage ($300k in our neighborhood) or rowhouse/townhouse ($250+). The prospect of paying off something as enormous and binding as a mortgage is frightening, despite the benefits of owning property and the supposed-guarantee of a return on your investment.

    My husband and I have told ourselves that want to craft a lifestyle where we work to live, not live to work, and biting off more debt than we can chew would prevent that. I’m working on starting a wedding/portrait photography business, and he’s building up clients as a piano technician (currently my business is in a little bit of debt, but he’s sitting pretty). We both want to avoid the 9 to 5 and be creative in how we provide for our future family (there’s a baby on board, did I mention that?).

    We’ve resigned ourselves to not being superstars making 6-figure salaries, and if that means a smaller home, renting for longer, or doing without a few things, we’re completely okay with that. In many ways, growing up with less than what we were accustomed to growing up with has given us a sense of humility, and hopefully worn down the sense of entitlement that gets build up in all the media around us.

    Overall, debt scares me. I don’t want to owe anything to anyone, and the fact that my net worth is in the negatives right now is concerning. It seems strange that most people live this way, without having a heck of a lot in savings, or any way of dealing with an emergency. If anything catastrophic happened to us, we’d be in trouble, and I don’t like htat.

  7. I have about 15k in credit card debt. Some of it is from college and the rest is from trying to keep myself “afloat” during a lengthly unemployment.
    I pay as much as I can every month but it never seems to go away.
    It has been a huge burden on me and has probably cost me a couple of great relationships.
    I am considering taking a second job and cutting my expenses to bare minimums until it is gone.
    It seems every time I think I am getting things under control something else pops up like a car repair or another unexpected expense.
    One thing I have learned is having this “bad” debt is the absolute worst feeling I have ever had I won’t let myself fall into this trap again, once I get out.

  8. I am 23 years old and work as an HIV/AIDS Case Manager for the govt. After taxes, withholdings, heath insurance, etc., I make $1000 biweekly.

    I graduated from college in June 2006. I went to community college for two years, my dad paid for my junior year of University (UCSB), and I paid for my senior year. I graduated with $5500 in loans which are at 6.89% for the next year.

    I’ve paid off around $1800 so far, so now I have $3990 left to pay off. I’m trying to put around $600 a month to them, but I’m also wondering if that money would be better used in a retirement account.

    I haven’t opened up an IRA yet, but I’m looking into a T. Rowe Price Roth IRA.

    I currently have no credit card debt. When I was in my post-graduation job search I lived on my credit card for a couple months, so it was well over $1000 but I finished paying that off last month.

    I have 17 payments left on my car ($244 each).

    That’s it! If you have any questions, feel free to email me!

    Allison

  9. I am 29 years old, have a BA & 1 year of grad school which contributed to student loan debt of $38k. I am not terribly worried about it, as I can’t imagine where I’d be without it. My consolidated interest rate is 5%. I have $18k in retirement and try to save at least 10% of my income in retirement. Overall, I like to save.

    Yet, I can’t seem to keep a liquid savings account for emergencies or save for a down payment on a house. I would have to use a credit card if something major hit. There always seem to be more variable expenses creeping up. I make $52k/yr. I recognize that part of my problem is that I like to treat myself to the typical consumer bs that I don’t really need which really annoys me. How much food & clothing does a girl really need? I spent $20/wk on food in college and luckily vintage clothing was in style. It amazes me how much more I spend on this crap now.

    I don’t have credit card debt, although I did for a time and learned my lesson. I don’t have a car payment and don’t want one and drive my paid for used car very little & ride my bike. I hope to have a house in the future. I like money and hope to get better at taming my demons and reaching my financial goals.

    thanks for the blog!

  10. I have about $16K of student debt. Three years ago it was $26K but my husband and I (really it was him) have made valiant strides to pay it down, though we’re going to ease up a bit. We’re both 25. We don’t have any other debt right now, including car payments, mortgages, or any unsecured debt.
    My only problem with the debt is that it was theoretically supposed to make me be fruitful and bring home a big salary, but that hasn’t really been the case so far. Then again, that’s one of the pitfalls of marrying someone in the military. It’s not insane debt, and we have another 17 years to pay it off, so really, it’s not a concern of mine at all.

  11. I am 25 years old and have been working to pay off all my debt for the past 3 years. I started with $40k in Student Loans and a $20K SUV. After getting serious about owning a home and being wealthy later in life, my wife and I have nearly paid down both debts. We will be completely debt free by the end of July ’07. People said we are completely nuts for paying off debt with such low interest rates, but they are all poor so we tend not to put much stock in their opinion. Together, my wife and I, make appx. $70k a year and rent an apartment. By saving the money we would have normally put toward debt, over the next twenty years, we will be millionaires by our early 40′s.

  12. I am in law school. By the time I graduate, I will have approximately $140k of undergraduate and law school loans at about 5% interest. While my soul hurts from such ridiculously high loans, I am still comfortable enough with my debts that I always max out my Roth IRA and I carry an investment portfolio worth about 10k isntead of paying down my loans. I am assuming that I will meet my minimum payments in the future and that the good ol stock market will return higher than 5% so that my investing will be more profitable than repaying my loans for the time being.

    My big decision was whether to go to graduate school in my (small) home town for free, or to attend law school in a big city at a total cost of over $40,000 (in loans) per year. Already $20,000 in undergrad debt, a full ride to grad school seemed like a much more reasonable choice. However, as a lawyer in a big city, I could be making $55,000 MORE per year than I would be making working back at home with a graduate degree.

    In the end, I decided to go with law school and take the initial $100,000 slap in the face in hopes of prospering in a few years. If law doesn’t work out, I will simply stand outside of various buildings in the financial district solving rubik’s cubes all day until someone hires me as a stock broker.

  13. I am $32,000 CDN in debt and I feel great about it!

    $24,500is from student loans and $7500 is from my parents.

    I am 25 and graduated in 2005 with a Computer Science degree. I spent 16 months in Europe volunteering after graduating and have returned to Canada where I have just landed a well-paying Software developer job (for a recent graduate).

    I recently re-read “The Richest Man in Babylon” and will follow the plan to put 20% of my income towards debt-repayment. At that rate, I figure I can be completely debt-free in 2-3 years.

    I have no car or house and am single.

    I feel great about having this debt because I know it is good debt that has allowed me to learn and earn more. Also, I feel great because I have a plan that allows me to become completely responsible for my finances.

    Although I don’t know my credit rating, I believe it is quite good. I pay off my credit cards every month and the credit card I use the most has just reduced my interest rate to 6.99%.

  14. Hi,
    Well my situation may be a little different but I guess it’s all the same…debt.
    I am now 28 but when I was 19 I had my first experience with debt from yours truly (my mother). In the beginning I guess I was either too young to understand the consequences or too scared to do anything about it.
    It happened when I went out of state for college and my mother forced me to send all of cc homes because she thought I would just spend them on random things and friends.
    Long story short, I followed directions and when I came back I had all of these bills.
    Still at 19-20 this didn’t phase. Trouble started coming when I realized that I couldn’t do anything (get a car, apartment, or nothing).
    It took me about 4 years to get it right. In the end I had to sue my the companies that I sent letters to disputing charges and I won…Some accts. she opened on her own.
    I guess the great lesson to learn is to watch your credit and don’t be afraid ( I was) to stand up to parents that use your ss to obtain credit cards in your name.
    It has affected me so bad that now at 28 I am scared to have debt.
    I currently have students loans at about $36,000 and my big screen that sits on 0% and that’s about it.
    I was so happy to get a credit card at 27…I never experienced and its great! Right now I am looking to buy a car (used) because I am too afraid to pay monthly….
    I feel confident in the debt that I have because I pay it on time and most of the time before it’s even due.
    I am the type that will go broke before having a past due bills.
    I’m sure what happened to me in my younger years has a part in this.

  15. I graduated college and had nearly 27,000 dollars in debt. The payments on that debt were killing me. I decided that I was sick of having it and made it my goal to get rid of it. I have worked two jobs (occasionally 3!) shifts of 18-26 hours, most weekends and I budget every cent that comes to me. I live very frugally and I will have the 27,000 paid off in full next month. Total time? 19 months. I make less than 50k, have an apartment and do not borrow or leech off of anyone. Anyone can get out of debt if you are willing to cut your lifestyle to nothing and work your tail off! The pot of gold at the end of that rainbow is sweet indeed.

  16. 28 years old
    married
    combined income: ~$150k
    live in NYC

    credit cards: $35,000
    car loan: $26,000
    personal bank loans: $15,000

    Our debt is my single most frequent concern.

    My wife and I are finally starting to tackle our debt, but it has taken us quite a while to get started. The first step was making some extra $$ (we make about double now what we did a year ago). The second step was acknowledging that we actually had a problem with spending.

    Now, we’re trying to restructure our debt and plan a reasonable monthly budget to pay it off.

    All so that we can hopefully save up some $$ for a down payment on a house, and be in way bigger debt!

  17. I am almost 38. I think we’ve had dumb debt and smart debt. When my husband and I were in college the first time, we got a free t-shirt or something and got credit cards with reasonable limits ($500.00). Sure, I had no income, but that didn’t seem important at the time. Wouldn’t you know it, I was responsible enough to have my limit raised to $2,000 after a very short period of time! Except that I wasn’t, and I paid thousands of dollars in interest and late fees and wrecked my credit rating for several years.

    It took many years for us to clear up this debt. I can’t name one purchase that was truly necessary either.

    After we worked and saved and got rid of most credit card debt, we went back to school. I went to law school and incurred about $30,000 in loans. My husband finished his undergrad and borrowed about $12,000. We’ve been paying on the student loans for almost seven years and the balance is coming down nicely. We bought a home for far less than the amount that we ‘qualified’ to buy and we try to live reasonably. We are doing this on one income because it is important to us to have a parent home with the kids.

    Because the student loan and mortgage rates are low, I am not really trying to pay those off in a hurry, but instead trying to save money for retirement, for emergencies, and for my children’s education. Although a plasma TV would be very nice, we have made some sacrifices. We are not interested in trying to keep up with the Joneses in their McMansions.

    The only advice I give to friends/relatives going to college is NOT to open a credit card account just because you can. It takes a very disciplined college kid to handle that.

  18. I am 23. I have over 300K in unsecured debt. Crazy right?

    I got into some really bad investing habit (ie, forex trading), and over three years I made some huge mistakes. I have a small business that I used to get more funding for my trading addiction.

    I finally started to come to grips with everything a few months ago. It’s been pretty hard, to say the least. My business brings in around 7K a month, but my expenses are still around 9K a month at the moment with all the debt payments.

    I have a house that I am short selling, hopefully that will be going through soon. You can read my journal at: http://www.debtkid.com

  19. my debt scares me. primarily b/c it is not under control. all of my payments are on time, & i am working on reducing credit card debt, but it seems like i’m plugging holes in a poorly built dam. unexpected costs have depleted the savings i spent 2 years building & despite attempts to build it back up, the depletion continues. my debt-to-income ratio is well above what it should be (~60-70%). i’ve paid off two cards in the last year only to have emergencies fill them back up.

    the worst part of my debt is the mental weight that it brings with it. it isolates me. it makes me unhappy. it occupies my time. it forces me to react instead of anticipate. it saps my motivation. it stands as a constant barrier to everything i undertake.

    it keeps me from doing what i love & seeking the one to love.

    it makes me tired….all the time.

  20. I am 28 years old and have been debt free for about 5 months. I got married at 24 and went into the marriage with about $5000 in college loans. We foolishly put about $3000 of wedding-related expenses on our credit cards.

    Although we are both college graduates, my husband and I both had a difficult time finding a decent job. He worked odd jobs and I worked in retail. I quit my job about 6 months into our marriage and started my own business. It was slow starting and before we knew it our debt (mostly credit card) had grown to almost $30,000. Although we lived fairly frugally, we were having to use our credit cards for groceries.

    It took about two years for my business to pick up and we were still in the red during that time, but we were aggressively working down our debt. My business has been doing well for the past almost 2 years and we were able to pay our last debt in Dec. ’06. What a great feeling!!

    Now we’re saving the money that would have gone to credit card payments.

  21. I am 24 years old and two Sundays away from graduation with a BA. I have $11K in student loans, 8K in auto loans, and 1500 in credit card debt.

    Student loans: I went to community college for 4 years, got 2 associate’s degrees, and finally figured out what bachelor’s to get. I have worked throughout my college career and paid everything myself.

    Community college – used the college’s installment plan and paid everything off. State college – loans for all tuition. Paid room/board for my junior year and books for both with cash/credit – a total of about $8500. This kept my credit around $3K for about 18 months, which was stressful on my income. I had to continually scrimp to pay it down – just to make room for more bills.

    Auto loan: Commuting finally killed my car that I had since high school, and I was without a car for 6 weeks in the winter (in NJ, not a good thing). My mechanic dad talked me into a Buick. Not a sexy car at first, but it drives nice and looks mature. 19mpg city, though, so I may sell it.

    With my student loan refund I was able to get my CC debt down to $500 in late Feb. It’s about $1500 right now due to new tires and taxes owed.

    I’m feeling pretty good about my debt. My goals once my job (regulatory consulting) adopts me full-time at $40K are to kill the CC debt, double car payments to reduce the length of the loan from 6 to 3 years, max out a 401K, and move out.

  22. I’ll try to keep it short and sweet since I don’t have a lot of time. Feel free to contact me if you need additional information.

    Starting college in 2001 I was 18 with no debt, but I did have one single credit card I seldom used.

    Fast forward two years, I graduated from county college with an AS and zero debt. No debt on my single credit card.

    Summer before being admitted into school for a BS, my breaks and tires need to be replaced (used car). I didn’t have the money, so I charged the $1K repair. Shortly thereafter, I got in a car accident and I was out ~$2.5K. I’m now sitting with $3.5K in debt and school is around the corner.

    Started school and I was hired for an internship. I figured I’d have the money to pay-off my debt, but I also decided to buy new skis and take a vacation skiing. Now my debt was up to around $5K.

    Over the three years getting my debt under control was tough. I’d pay it down and then rack it back up. Typically these were costs I didn’t anticipate … car repair, maintenance, new clothes for a new job, and items that I “wanted” like a ski trip every winter.

    Now I’m 23, it’s 2007. I’m down to $3K in debt from $5K just in credit cards. I have a auto loan (finally replaced my car) for $13K @ 7.9% interest. My student loans are around ~$70K, but to my parents I’m appreciative as they’ve agreed to pay 1/2.

    I live alone, but on my own. My monthly expenses, plus paying off my debt, and contributing 6% to my 401k … leaves me with $400 for extra gas, groceries, or that 1 night out.

    To help reduce my debt, I do computer consulting work and I’ve just been hired by a boutique consulting firm with a substantial increase in base salary.

    The road is tough, but my credit cards will be paid by July and my auto loan should be paid-off by next year.

    Next goal, save 15% to my 401k and start an emergency fund.

    It’s slow, but progress is being made, it isn’t easy.

  23. At 22 and a year out of college I had over 15K of credit card debt – my job and second job didn’t pay enough to meet my expenses so it just kept going up. Paying off cards with other cards, opening new cards to transfer balances, leaving statements unopened. Thank God a friend helped me get it together to figure out what I owed and to whom, and to consolidate and get it together. I paid the last card off five years later but it’s done, and I have well above average credit at 31. Learned that lesson the hard way and hopefully will never be there again!

  24. I’m 29, got a $280,000 +/- mortgage (with my spouse) and as of lunchtime about 18 bucks on my credit card. Paying down the mortgage at a fair clip gives me a good kick.

    College loans keep coming up in the comments here, so you might find this interesting. I’m from Ireland, where your first crack at 3rd level education is taxpayer funded (if you want a second degree, you pay). Never ceases to amaze and upset me to see young people starting out in life with thousands in college debt. I’ve probably said it before here, but I won the birth lottery for sure.

  25. I’m a 20-year-old college student. Thanks to a lot of scholarship money I don’t have any student loans. My only debt is about $300 that I allowed my boyfriend to charge on my credit card (which is 0% APR for quite a while)

    I normally pay off my credit card at the end of each month, but this past Christmas I didn’t do that. I had 0% APR so it wasn’t a big deal. I hadn’t saved up enough for Christmas and I knew I’d be able to pay it all off after working over winter break.

  26. I am 27, and up until last year I had $135,000 in debt. $71k is mortgage, $15k is credit card debt, $14k is a car loan, $10k personal loan from the bank (at 10% over the 3 year loan) and $25k is a student loan.

    I recently had twin boys born, so I ended up using my credit cards to get things that the boys needed, plus I had a Sears card to get new windows put into my new house to get rid of the draft and noise for the kids.

    Luckily, my job put me in a position to get extra money by going on assignment in another state. Currently I have paid off all of my credit cards and I have set up an IRA. I am getting rid of all but one credit card for emergencies. I have been saving money in an emergency fund, but I am still keeping a card just in case.

    All I have now is a student loan, mortgage, car payment, and my personal loan (which is almost paid off too).

  27. @#19 – I feel for you. I’m 26 with ~40k in student loans and CC debt, just starting to manage to chip away it. It’s awful, having that weight. I feel like i have no freedom; with that $500 due every month, I can’t afford to be without income for a second.
    I live alone, but have no independence; I’d like to have the freedom to move to another town, or another state; to switch careers if I get bored. The college education, as much as it does for my resume, wasn’t worth it – I’d gladly take a 10-20% pay cut to be even. People whose parents can afford to pay for a moderately-priced (ha!) school – I want you to understand how lucky you are.

  28. I am 23, and I am debt free. I own a car, it’s paid off. I worked my butt off and paid my own tuition and other living costs. I worked 3 jobs at times, and took my time to graduate (5 yrs). I don’t own a house, because I don’t need one, my apt is freaking beautiful, a bed is all I need to get by.

  29. Rico (you know THE Rico) Link to this comment

    Age:24

    Education:BFA (Studio Art)

    Debt:$0

    Credit Cards:4 personal 2 business

    Savings:8k roth ira, 5k savings, 2-3k at a time in checking

    Income:~$3K/month

    Living situation:Renting Apartment

    Work situation:Contract IT work (work 9 months, vacation 3, work 9 and so on) Small import business just started this year.

    Cars:2 (89 civic, 03 mustang) both paid for.

    I’ve been working since I was a little kid. I’ve mowed yards, collected glass/paper/cans to recycle for dough, IT work in high school, IT work through college (had to work full time and attend college full time in order to pay it all myself), IT work post college. Working contracts does enable me to vacation and enjoy life quite a bit. It does limit me from being able to own a home (and subsequently more and much nicer vehicles). On the one hand it’s nice to have accomplished everything myself financially, on the other hand I realize I missed out a lot on life because I’ve always worked so much.

  30. I’m 25. I have ~$165,000 in student loan debt. ~$20,000 from undergrad and the rest from law school. My student loan payments are about $1,800 a month.

    Yeah, it stresses me out, big time. They loan you the money like it’s growing on trees, they don’t warn you about paying it back. It’s also inconvenient because I can’t get a home loan. I find that ridiculous because I pay $800/month rent and I’ve heard of some people having house payments in that range. So I have a place to live, but that money isn’t being invested into anything.

    My interest rates on my debt range from about 4.5 – 9.1%.

    I haven’t consolidated my federal loans because I’m hopeful the rate will go down in the future. My understanding is that once you consolidate you can’t consolidate again…so I’d like to get the best possible rate available, even if it means waiting a couple of years. (I’ll be paying for that long anyways.)

    Besides paying it down from highest to lowest interest rates I’m just paying everything I can on it. Anyone have any great tips for student loans?

  31. I am 35, my husband is 38. We live in the Phoenix metro area.

    I make $72k/year
    He makes $55k/year

    We owe $3500 total on two credit cards and $2k on our first new furniture ever.

    We have two car loans: 1. balance 4k @ 200/mo and 2. balance 7k @260/mo

    We own a house with a mortgage of $340k

    We own a rental property with a mortgage of 218k.

    And we owe 130k in student loans. We worked all throughout our 3 degrees, didn’t use CC’s, never got help from our parents, and lived like paupers – yet with interest over the years, here we are at $130k.

    Oh yeah, and we are expecting our first child in July.

    This amount of debt absolutely staggers us to think about. But, between our 401k’s, my 457k, my state retirement plan, and cash we put away every month, we save between 25-30% of our income. I will be eligible to retire with a full pension when I am 55, him at 57, although we will still be paying on our student loans well into retirement. Doesn’t it suck that I have to plan my retirement to include student loan payments?

    The positives of our scenario is that we are saving and we are frugal, we follow a workable budget, and we are getting great tax benefits from owning a rental property, and our incomes will keep going up with our very stable jobs. Both properties we own are in ahigh-demand area college town, and even with the slump, have appreciated nicely. We have about $80k (conservatively) in equity between both.

    The bad news is that our cash flow right now is tight. We are expecting a baby soon and are hardly prepared for this monumental expense. We don’t live much differently now than we did in college. We have never taken a “real” vacation. We got married for under a thousand bucks in Vegas 10 years ago. We’ve never had cable. I cook dinner every night and pack my lunch every day.

    But you know what? I don’t regret any of it. I’m sure we’ve made some stupid decisions, just as I know we’ve made good ones. Our situation is going to be different this year because of having a baby. So, we’ll just stick with our long term goals, plug away as we can, and not beat ourselves up for carrying some CC debt this year.

    Happy budgeting!

  32. I am 29 years old. I am a third year attorney in the field of Mergers and Acquisitions. I make $60,000.00 per year. I am over $100,000 in debt ALL in student loans. I pay over 1,100 per month in student debt payments. I am unable to put any money in my retirement account. I have an insufficient emergency fund. I fail to feel even the slightest satisfaction from my work as nearly all of my money goes to paying off debts instead of creating wealth. While few in this country will shed a tear for whom society deems overpriced dilettantes, I remain nevertheless a real person with real feelings. I look into my future and I see that I will be paying these debts for the balance of my lifetime. I am exceedingly depressed by this. I have wild lottery fantasies (where I win just enough to pay off my debts in one lump sum, big dreams eh?). My debts affect my marriage as well; we are limited in the places on this earth we can live and move to. Every decision I make, every decision, is governed by the looming question of “what will this mean regarding my ability to pay my loans back?” I am incapable of feeling relaxed when I think of my finances. I do not foresee my future children’s lives improving beyond my own (as I will be incapable of providing to them the things I had as a child due to my debts). In essence, I have lost any joy, choice, freedom, liberty, happiness, that have been so lustily promised me in the Declaration of Independence. In fact, I am extremely dependent.

  33. I have no debt. I am a grinch. I sometimes regret not going out with friends to dinners and movies because of the costs. I am scared of paying money. This fear has kept me debt-free, but it has also yoked my life.

    I wish everyone with debt good luck in paying it off (especially the credit card debt – the interest rates are so high!).

  34. I’m in my second year out of law school and am working at a large firm. I currently have $105K in student loans. Approximately $60K are federal loans which I have consolidated at a 3% interest rate; the remainder are private loans that have interest rates from 9-11%. The government loans are not oppressive – the total payment on them is about $300 per month. The private loans are staggering, and the minimum payment on them is aabout $600 per month. I received a half-scholarship to attend law school, so my debts are not as big as some of my former classmate’s.

    I currently have just under $3K in credit card debt (much of which was accumulated in law school on things like groceries, interview suits, text books, etc.). I have been paying this off agressively – I had over $15K 18 months ago. Once this debt is gone, which should be bby July, I will divert the money I was using to pay off the cc debt to go towards my private student loan debt.

    I was able to purchase a house, and so have a mortgage as well. This debt does not bother me, as my mortgage payments are roughly equal to what I was paying in rent, and because of the tax incentives that come with owning vs. renting.

    I think about my debt all the time. I currently allow myself $200 per month of money for personal expenses – the rest goes towards debt repayment and establishing an emergency fund. I do not enjoy the work I do, but at this point cannot see taking a lower paying job. I wonder how I will be able to afford to have kids – not just the expense of a child, but whether it will be feasible for me to take any time off or to work part-time.

    One other thing I worry about is that this debt can make anything seem like an emergency. If I were to lose my job, it would be catastrophic because I would not be able to lower many of the bills I pay every month. That is, I can’t lower my student loan payment or my mortgage payment.

    Overall, I am pretty sad about this whole situation. Law school was insanely expensive, and to pay it off I am doing work that I do not find satisfying.

  35. I am finishing my undergrad degree this may from a top private university. I have 23K in student loans, my parents paid the rest. Luckily my parents also helped with my living expenses. However, I have almost 4K in credit card debt. I’m unsure whether my parents will be paying it off, or if I will be. I’m learning to take control of my money after being taken care of for so many years. The debt doesn’t really bother me yet, but I’m sure that’s because I have not yet entered the “real world” and haven’t had to start paying these things off yet. I am attending a graduate program next year, completely on my own loans. These loans will come to about 35K. I have a feeling the debt will start to stress me out pretty soon.

  36. I started in-between my first real job and college. I got a $20,000 car, then a computer or two ($4,000+) and stereo stuff ($1,500+). After that I was eating out a lot in college, buying stuff I didn’t need for my apartments. Then I didn’t pay anything for a few months (4+) and all my debt was charged off, which ruined my credit. Well I left college and got a good job, paid off all my debt (at about 70% instead of all of it) and bought a house for $120,000 with an FHA loan that ignored my credit. My car has been paid for a few years, I have only 1 credit card (my credit still sucks) and I’m selling my house for a $20,000 loss to move 3,000 miles away and start the best job of my life. I’m selling almost everything I own. Good stuff and I feel awesome. Being debt free is a super great feeling after all that bullshit.

  37. I’m 25. Two years ago I was debt free. Scholarships paid for college. Parents paid living expenses. My car was a graduation present from high school.

    At 23, one year after graduating in business, I was given a diagnosis of possible Multiple Sclerosis. In the last two years I’ve built up more than $20,000 in credit card and medical debt.

    But most of it was travel related. Might as well travel while I feel good. Why the hell not, right?

  38. My fiance and I have 5000 dollars in credit card debt, at ridiculous interest rates (18%), and I also have a student loans for 2750 and 1500, the 2750 one is sitting in the bank building interest until it needs to be repaid, its a form of an emergency fund.

    We make approximately 30,000 year together, both of us in college. I work for tips, he works for an hourly rate at a hardware store.
    He has a 401k set up (courtesy of me, the financial manager of the relationship).

    We pay off our bills each month, and whatever money we have left usually gets split to adding to our savings or going towards our credit card debt, which never goes anywhere. I hate making the minimum payment because I know its mostly paying off the finance charge for that month.

    I’m 20 and my fiance is 21, we both have decent credit. I’d like to lower our interest rates, but our banks won’t let us.

    Debt sucks. But a credit card has definitely saved us in some situations, ie, one of our cars is broken down or we’ve had to make emergency trips for family passings and such.

  39. After a BS and an MA, I found myself in a remarkable amount of student loan debt: $98,000. I had never been educated in financial matters, and I regret that–I had no idea I had accumulated that much debt over my college years; when I went to consolidate my loans (got a pretty good rate, 4.75%) and the woman I was talking to gave me the amount, I could feel my heart drop to my feet. I could have almost bought a house for that amount of money!

    Thankfully, I got a good job and I’m starting to make payments, but I strive every day to put just a bit more aside, so by the time it’s paid off, I

    a. Won’t be 57 and
    b. Will not have paid $70,000 in interest alone

    My warning now to every college student I can reach is don’t take the student loans if you don’t have to–take a lesser amount, get a job, and pay your interest as you go if you can–though I have my debt ‘under-control’ and make monthly payments, I’d certainly rather be saving towards a house right now than speculating what on earth the previous tenants did to the carpet.

  40. Ramit, I have sort of an anti-debt story. For a number of reasons, I went to a public university for two years and a private university for two years, saving a lot of money. I didn ‘t have a lot of money to buy anything, but I avoided accumulating much credit card debt by not buiying stuff. I don’t think I even owned a computer until after graduation. I lived at home for four years before finally moving to New York City, even though I wanted to get out of the house immediately. When I finally moved here, I was able to buy a co-op apartment with the savings. Because of all this, I have always been pretty much debt free aside from the mortgage. This was a sacrifice but it paid off in allowing me to be independent and start two businesses without worrying about college debt.

  41. Well, I’m 29 now and currently have a total of around $50K in debt.

    $16K right now is in student loans (I was able to consolidate last year, so the rates are low and will remain such)

    ~$12K is on a car loan to get me a car some years back furnished by the ‘rents.

    The rest is in credit card debt (~$22K)…the crazy part is I never got a card until age 24. I got stupid on a couple of bad investments/scams, and also have some money tied up in trading on the futures market…which is going OK so far as I’m actually learning about it and not just trading wildly like some may and blow everything up.

    Couple of nice car repairs over the years also didn’t help matters that much either…overall the interest rates on these cards are low (

  42. I’m 22 years old and graduating from college next month. I got a letter today notifying me that I’ve been accepted into graduate school. I want to earn a master’s degree in social work and help improve the lives of people in my community, but I just can’t stand the idea of accumulating more debt, so I’m looking for a job instead.

    I already have over 12K in debt from my undergraduate degree–and my state has a program that covers my tuition. Despite working 20-30 hours per week all through college, I still needed student loans to help cover my living expenses. I got a credit card to help me make it from paycheck to paycheck, which added another 2K in debt. I cut up the card, but soon started having a lot of trouble with overdraft fees from my bank, so I opened up a line of credit that offered overdraft protection. Little by little, it’s added up to about $1500.

    I’ve had a job since I was fifteen, I never had to pay tuition, and I’ve been living below the poverty line since I left my parents’ house at 18. I have not had an extravagant life by any means, and yet, at 22, I owe more than $15,000. As a social worker, it’s unlikely I’ll ever make enough money to justify the debt I’ll accumulate in grad school. I’m starting to wonder if I would have been better off if I’d skipped college altogether and gone straight into the workforce.

  43. I’m 22, and I’m going to graduate in August most likely.

    Current debt: $15,000

    Five thousand is in government loans and the rest is a loan at the same rate from my bank. I also got some grant money.

    I was very lucky because my great-grand parents had invested in savings bonds when I was a baby and that helped me pay for most of college. However, they couldn’t see how much costs would eventually rise.

    I also participated in a study abroad program in the UK. In case you don’t know, the exchange rate right now is 2 pounds to the dollar. So I ended up spending more of my 10,000 than I had originally planned.

    I’m worried about it because I’m coming back in June, and I don’t have a job, my parents are moving to Indiana (I’m from TX), and so I need an apartment almost immediately. Because my dad has decided to join seminary, my parents won’t be availiable to help me out. I’m going to have to rely on my boyfriend when I get back for finances, and I hate that. I like relying on myself. Also, the job market hasn’t been so good, and I don’t want to have to work retail again. Mostly because of the poor pay vs amount of work.

    I don’t have any credit card debt because my parents have had problems with that. Occasionally I use it, but only in amounts I know I can pay off by the end of the month.

    I know I’m not going to have any insurance, and this frightens me, because I won’t be able to afford health care without it. I have no savings at all. Last year, I got in a car accident, and it completely wiped me out, even with my parents helping.

    If I could change something, I wouldn’t have gotten into the apartment complex I did. It was way to expensive for me. If I had gone cheaper I could have saved some money. And had a social life because I wouldn’t had to have been working so much just to eat and pay rent. I think I may have lost some friends because of this and because of my stress level at the time.

    My Ozzie friend gets a freaken check from her government every two weeks for going to school. 0_0 She was all like “wow, you guys work and go to school? Being a student is your job.” Ha, I wish my government thought that.

    I consider myself very lucky – I didn’t have to pay for all of college by myself, and my parents were able to provide insurance, cel phone, and car insurance – without which I wouldn’t have been able to have a job. My grandmother bought me a new used car when my old Honda ’86 (no AC, in TX. Imagine.) died at the ripe old age of 20 (it could legally smoke, and it did). Now I have a Honda ’96, which was $4000. Drives great. Has an AC. I’m not picky. If I can I want to try and pay my grandmother back somehow. I feel bad owing people money – and borrowing money.

    Hopefully by living cheaply I can get rid of debt and live normally.

  44. I’m 27 now and graduated 4 years ago with a bachelor’s degree in engineering. When I graduated I had a few thousand in CC debt and about $21k in student loans.

    The CC debt has fluctuated but I am CC debt free now and down to about $11k in student loans. I own my car outright.

    I bought a house two years ago and have $275k remaining on the mortgage at 5.5%. Conservatively, I have 75k of equity in the house.

    I started saving for retirement last year and am putting away at least 10% of my taxable gross. I’m planning to hit $1M in savings by the time I am 49. The original goal was to be financially independent without having to rely on a company pension as my current employer does not offer one. I’m now reconsidering the $1M figure as I think it is too low to consider myself financially independent in the year 2029.

  45. Well I am 20 and have about 105k in debt. The majority of my debt is in my mortgage, (about 98k.) I purchased a house near campus for when I am going to school. After a few years out of school I plan on moving out of it and then renting it out entirely.

    The rest of my debt was in the form of loans from my parents to help pay for college. This is 5-7k, since I don’t have an online account tracking this I would have to pull up my documentation.. Since your not the IRS that wont happen ;)

    Then on top of that I owe about 1k for stuff relating to my business. That will probably just get paid off at the end of the month though.

    Now this debt is kind of scary and at the same time kind of good. Since most of my debt is on a property that I believe will be a good long term asset for me it makes me feel good about it. However, I am not going to lie, the payments are pretty much over my head and I rely on the rents that it generates to make the payments. Of course I have a couple month buffer, but that scares me.

    The monthly payments on my loan and everything on escrow is around $720..

  46. Wow, I can hardly write this. I have a bit more than $130,000 in student loan debt, from a master’s degree at Cal and a JD from an Ivy league law school. Most of it is consolidated federal loans, so the interest rate is quite low. About $15,000 is private loans, at something like 8%.
    Obviously I don’t really like to think about the details!

    In a way, I’m lucky, since I got two cracks at federal loans, instead of having to fund an equivalent amount with half private loans, like most of my law school class. At the exit session for our loans, the total amount borrowed (just from the 500 or so JDs) was announced – $40 million. Law school is shockingly expensive. I can’t remember the average indebtedness, but it was well into the six figures.

    I’ve also got around $4,000 currently on a zero percent credit card, which I’ll pay when I start working for real (I’m a low paid judicial clerk at the moment). I’m hoping to pay the entire private loan back by the end of the year, then take as long as possible for the consolidated loans. On a 30 year repayment plan, the payments aren’t overwhelming (something like $450), and it’s the cheapest money I’ll ever be able to borrow. So, conceptually that debt doesn’t bother me too much, but the sum is high enough that it sometimes freaks me out.

  47. I’m 19 years old and I am $148,000 in debt. I go to a private school that costs me $47,000 per year. My parents were kind enough to pay the first year of tuition for me, but I am on my own after that.

    The only reason I am staying in this university is that I have an unbelievable job doing research at a nearby ivy-league material school. My only option to remove this debt is to transfer to a state school, which I can’t bring myself to do.

    My solution for solving this debt: 80-hour work weeks for startup companies in exchange for equity only. I’ll give myself three months at a new startup to see if it will make it; if not I’ll move on. I will likely start my own company in a few years, once I learn from the mistakes of the others.

    If anyone that is reading this is interested in a smart, enthusiastic undergrad to join their startup, please don’t hesitate to contact me. I’d be more than willing to drop out if the opportunity strikes.

  48. I am married combined income 48k. 3 kids 15, 11, 7.
    Mortgage 110k, Mortgage 2 35k, Credit card 35 k. We are a mess. I can’t find a job after staying home with kids. Help!

  49. hi Ramit,

    I’m 25, getting married next year, and my fiance and I just bought our own condo last month. I have about $35k in student loan debt, but I think it is entirely worth it since I wouldn’t have gotten my job without it. It would have been higher but I was fortunate to have a tuition scholarship for 4 years, so the debt was for books and room and board and misc fees.

    I’ve gotten my credit card debt down to approx $650 after I started my own PF blog. When I first got out of college I had about $1400 total CC debt, and a federal Perkins loan debt of $890.00. I got it down to $80 after some aggressive payment planning.

    I have a small emergency fund established that I’m trying to grow, and my fiance and I are also paying for most of our wedding ourselves. He took care of the condo downpayment and I’m taking care of the wedding. A twist to this is that last year I was diagnosed with arthritis and after countless blood tests, rheumatologist visits and even a visit to a orthopedic surgeon for another test (they thought it was carpal tunnel), I spent approximately $2300 + prescription medicine cost (generic, so it’s cheap) in after tax money since i didn’t open a health care spending account at work, even though it was available. the $2300 is already after the insurance’s payments and deductibles too. This is why I am fortunate to have the job that I have that has benefits, and also that I had the cash on hand to pay the medical bills. The cash came actually from our wedding fund which is currently at $10k (we are aiming for a $15k Illinois suburban wedding and pay for it in cash), but my fiance said my health is more important and that it was better we pay it off all in full now…rather than let it all add up and put us in even more debt. We are sure anyway that we can easily put the $2300 back via more savings in time for our wedding.

    After all the arthritis drama I had to go through, I understand now that money is nothing when you are not in top health I am ok now, my pain is under control w/ medication and monitoring and I can last thru the work day ok. But I want other young people to understand that without health, they have nothing…because they won’t be able to work, and pay the bills, and save, and plan the rest of your life. Take care of your health and you will be worth millions.

  50. i just want to add that my Sallie Mae (the 35k) debt payment is $227, and I still have $35k on it. The federal Perkins is what I got down to $80 from $890, and I expect it to clear by Memorial Day.

  51. I’m 21, I’ve got roughly $15,000 in education loans (which I don’t yet have to pay back) and I’ll probably be adding on to that to get money for studying abroad for the next academic year.

    I’ve got $3045.82 debt between two credit cards, which I accumulated from paying for a vacation for myself and my exgf last summer, buying plane tickets to go home and visit the current gf and/or my family, and I needed a cash advance to pay off my student account because it came due earlier than I was told it would and I didn’t have the money.
    This credit card debt stresses me a lot out a little, and it definitely makes me feel more cautious about spending with my credit. I’ve got a plan which should pay off all my cards by the end of the summer. As for my school debts, I try not to think of those right now because I just want to graduate and I’ll take whatever money or loans I can to do it. I do plan on consolidating my loans once I graduate, but to do so before means I lose my 6 month grace period and as nice as a lower interest rate may be I’d much rather have the 6 month grace period to get started before having to pay.

    The last credit bill I got had my minimum payment doubled, which I just heard is some new law that was put in place, and I really don’t understand it. This is stressful for me as a student because I’ve been making the minimum payments ech month, but barely so. I get paid once every 2 or 3 months from a research study I take part in, about $300 usually. This is money I spend on bills and food, and it tends to go fast. I’ve lately been considering calling a debt relief company, but I’m not sure if that would be right for my situation but I’ll be doing some research into this topic as well.

  52. $23,000 in student loans at a higher-than-I-would-like-to-admit interest rate. $1000 in CC debt. Graduated grad school in 2006. Before that, was working low paying jobs, so couldn’t save very much. It’s a shame so many young people in the U.S. start their adult lives off with heavy financial burdens. Like others have written, debt is a psychological burden that effects self-esteem and relationships with others.

    I used to think freedom was a highway. Now I know freedom is a bill laying on the kitchen table that says “paid in full”.

  53. I have quite a story to tell as well. I came to this country at the age of 20 to pursue my bachelor’s degree. I did 2 years communit college back home, so only had 2 years left. Fortunately, I come from a society where it is the responsibility of the parents to pay for the childs education. [I value this tremendously now]

    I had no clue about finances and started applying for credit cards so that I can get the free T-Shirts on campus. Ended up getting over 10 credit cards and racked up around $6000 in debts spread over the cards. I could not afford to pay this as a student so i said fuck it! I was hounded for like 6 years by credit card companies and third party credit agencies to pay up…but I never did. Fast forward 11 years.

    My credit score is now at 719, I have about $350K in savings with no debts (apart from the severely late debts accumulated long time back. I have the capability to pay now, but credit companies that I defaulted dont even know what im talking about when i talk to them and besides a financial guru once said that its no use paying them back if u have gone into serious collections unless it makes u feel good to do so.)

    Im 31. So those people out there who fucked up….dont worry, there is still time to salvage the situation. [ONLY if you realise the problem and never repeat it]

  54. I guess I might as well chime in with a story somewhat different than the rest.

    I’m 23, have a bachelor’s in engineering and about to get a master’s in the same field. I go to a public university that is ranked better in engineering and my specific field than most private schools so there was no reason to go private.

    I have absolutely no debt related to my education. I received a 4 year scholarship (state schools DO give away money), worked throughout undergrad, and have a paid research position now.

    I have ~$3,000 debt for a car loan. When my first car died (a 1991 ford escort), I decided I wanted/needed a truck to transport things…and it has come in handy many times since it’s purchase. I put a lot down and have paid down ~half the loan.

    I have ~$4,000 in savings/checking and another $14-15k invested between a roth and non-retirement accounts. I could pay off the car loan but I am making more with the money invested.

    I have no credit card debt, though I use it extensively as I am typically too lazy to carry cash. I have never carried a balance on my card.

    I have an excellent credit score and debt does not scare me. I am completely comfortable with leveraging low-interest debt on higher interest investments. I plan to be a millionaire by 40, with 45 being a slightly more realistic goal based on my calculations.

    So…there it is. I guess after seeing all these comments I should be especially grateful for the scholarship I received and lack of debt.

  55. Worst year for me financially was 2003. Got married and my wife had a preemie baby all in the same year. My son spent his first few days in the hospital ICU until he was strong enough to come home. By year’s end, we had racked up about $15,000 in credit card debt.

    Decided all along that my wife would be a stay-at-home mom, and my gov’t salary was barely getting us by paycheck to paycheck. Fortunately, I invested in the gov’t TSP plan from day-1, so it continued to pull pre-tax money since I started working for them in 2000.

    In 2005, I accepted a transfer to Japan, which came with a lot of benefits… many financial ones (rent and utilities paid, tax free allowances for cost of living, etc). I also got a 3-month salary advance that helped us get over here from the USA. Part of that I used to pay down debt, the rest we used to get settled in Japan.

    By early 2006, we were completely out of debt. I maxed out my TSP and put additional money into a money market acct each paycheck so we can save for our future first home down payment.

    Now, we’ve got about $100K in my TSP retirement account, another $10K in my son’s 529 college savings account, and nearly $15K saved up for our future home down-payment.

    Best thing is that in the next 3 years, we plan to see much of Japan, and also visit China, Thailand, Singapore, Australia and New Zealand.

  56. I am 27 years old and finishing my PhD before heading back to medical school to finish the last years of my medical degree.

    I am in £4500 (~$9000US) credit card debt with an overdraft of about £2000 (~$4000US). I also have £10000 ($20000US) of student loans which will increase when I go back to finish medical school.

    I am lucky enough to have incredibly supportive parents, but sponging from them any more is not realistic at their age.

    Thanks for all the positive stories, they really help. On to creating a zero based budget!

  57. I feel very lucky, reading all these stories of six-figure school loans and so on. I have no debt. I had a GBP5K student loan which I paid off within a year or so of finishing my MSc (I worked full-time whilst completing that). I paid cash for my car, and I was lucky enough to find a wonderful high earning SO who also has an additional private income so we have no mortgage or rent payments. I make GBP30K a year, she makes GBP43K, and has an income of another GBP30K or so. I’m saving as hard as I can for retirement and an emergency fund because I don’t want to waste the opportunity we have to save now since we might have a family or other problems in the future (sick parents etc). Good luck to all those trying to get themselves debt-free. It certainly inspires me to plan for the future.

  58. I just graduated in December. I’ve got 15K in student loans at 3.25% and 2,500 at 6.89%. I have no credit card debt.

    I’ll be doing Teach for America over the next two years which means my loans are deferred and the gov’t pays the interest. I plan on saving up to pay the 2,500 as soon as I have to start paying loans again. The 3.25% I’ll pay the minimum amount until the loans are done. I can make more just having that $$ in a savings accn’t.

  59. I can’t help but to read all the posts about people with $1,000 to $3,000 that finally get there balance to $0 only to have an emergencies come up and they need to charge it. After struggling for 3 yrs with the same situation I found a solution that I recommend to all. First you have to stop the bleeding! Next month when your credit card statement arrives with a total balance ignore it! PAY THE MINIMUM and put the difference between that and the amount you really would like to pay in a ing direct savings account or equivalent. WE are all young do this for 6 to 9 months you should be able to save more than you did in cash in a long time. Do this without charging more in the mean time and it will lead to no need for credit cards again. I know this is very unconventional and outside the box thinking. I may even get ripped dearly for this but I’m sure it will prove beneficial to at least one of you.

  60. Age: 33

    Mortgage: $150k

    No car debt, school loan or any other debts at all. I do owe the cable company 150bux, but i’ll pay that when I get annoyed by them enough.

  61. I racked up a quite large credit card balance when I was an undergrad. Here are a few things I wish I had learned a little earlier:

    1) Credit cards are not for Amazon.com

    2) Credit cards are not for fast food

    3) Credit cards are not for internet porn (or so I hear…)

    4) Credit cards are not for gasoline

    I am still paying off my original balance for all this garbage.

  62. I am 32, make $28,000/yr and I have $33,000 in student loans to pay back and I’ve been going through a divorce over the past 4 years and have $180,000 in lawyer fees that won’t stop growing until the appeals are done.

    It becomes overwhelming to think about so I usually put it on the back burner… denial! But they are there and always on my mind. I want to do things like… eat, have electricity, take a hot shower, take my kids out for ice cream… etc, and feel guilty about it because that is all money that should be going towards bills. I have only 1 credit card and $800 on it which really shouldn’t be overly hard on me, but I cannot seem to get out from under it either… It’s all psychological, right?

    Lately, I’ve been of the “scr…w it” nature and have been much happier with life, but it really doesn’t change the debt, just my attitude towards it.

  63. A little late in the game but my story has been outlined and is being outlined on an LJ community I made. I figure I’m as open as I can be about my debt without risk of ID theft.

    http://community.livejournal.com/goingdebtfree/?skip=20

    As of this point in time, I’ve been airing my financial situation for 16 weeks. All of the steps up and down are there including the latest crash.

  64. Right now, I have about $85k in debt, $75k of which is a mortgage, and $10k is credit cards. I own a car that is paid off.

    I bought a house in 1999 on a 30 year mortgage. When interest rates dropped in 2003, I refied to a 15 and have 11 years left to pay on it.

    I’m working with a singleminded intensity at this point to pay off the credit card debt, at which point I plan to begin paying additional principal on the mortgage.

    I’ve been saving 7% per paycheck automatically into a 401k (with 6% match) and recently bumped that up to 10%. I plan to up that to about 19% once the credit cards are paid off, and plan at that point to begin regular contributions to a planned expense account and to an investment account.

    The house has been a mixed blessing. On the one hand, it’s perhaps my biggest asset, but on the other, it’s my biggest reason for not relocating, and I think I’d really like to relocate.

    I’ve made so much progress on paying it off, that I don’t want to reset the clock.

    I’m 33 years old, and while I don’t feel overwhelmed by debt, I don’t feel like I’m doing nearly as well as I ought to.

    Something clicked in my head back in January. I feel like I’m wasting my life working to pay off debt, and working to save enough money so that I can retire without worry.

    I know that I’m doing better than many people in terms of finances (at least I’m less underwater), but sure feel like I’m letting life live me, rather than the other way round.

  65. I graduated with BFA in animation and film last year.
    At the moment I have 132 K in loans for my education. The APR on it is 9.25 %, making the monthly payment at least $1 100 . I had to put in on forbearance last month because I could not afford paying it and all of my bills.

    At the moment I work as a VFX Supervisor making $42 K a year. I live in LA which makes the living expenses pretty high.

    I own a paid off car. I’ve paid off a $2000 balance on one of my credit cards last month, leaving me with $500 worth of debt.

    Just today I opened a Roth IRA with a plan to put $50 every month.

    I try to conserve on everything and be smart about my finances, but with such ridiculous interest rates on my student loan I can barely survive.

    I know how the system works and that student loans are not just free money, and I do want to pay them off promptly, but I don’t know how I am expected to pay a house-mortgage sized loan with an entry level income.

  66. [...] Here’s the article I was reading from about young people’s debt and their feelings towar…. The 65+ comments are stunning. [...]

  67. I went to a state school for undergrad and had no debt after finishing that. I’m 22 years old pursuing a MA in Economics and have about 50k in debt and might take on about 10k more for my last semester if I don’t get any scholarships. I know that I’ll have a lot to pay off, but I follow economics enough to have heard of something called the Permanent Income Hypothesis. I think I’m going to make a lot of money from my investment in education and therefore it will be worth it to take this much debt. I feel no sympathy for anyone paying 100k for an MBA or JD. They should all be making at least 100k after three years on the job and should easily be able to comfortably meet any payments.

    However, I have sympathy for the people getting MAs in Art or other subjects that are less marketable. But then again, how much did you learn that you couldn’t have read in a library?

  68. [...] I Will Teach You To Be Rich » Tell me a story about your debt Ramit asks his readers: “How much debt do you have (and what kind)? How old are you? How did you get into debt? How does it make you feel?” THIS IS WHY I WRITE THIS BLOG! (tags: stories debt pfblogs) [...]

  69. My husband and I are both 23 and haven’t been out of college (or married) for a full year yet. We have ~$13K in school debt. We refuse to ever have a car payment, or carry a credit card balance, so right now we’re working to pay off the school loans as well as save about a third of our income toward a first house, which we hope to move into in the next 6-12 months. Only I have a 401K opportunity at work, and we’re funding that to the employer’s match.

    We figured, if we start right, it’ll be easier to continue in the right financial path. Pretty early on we went on a ‘cash system’ for day-to-day budget things, and that has probably helped a lot. Another thing that has helped is my discovery of a love of cooking :)

  70. I am 23 and will be graduating from the U of MN in three weeks. The one thing that has been consistently weighing on my mind is finances. I have been obsessing, reading every blog about money I can, but it simply has not taken much of the worry away.
    I am graduating with approximately $43,000 in student loans, both public and private (with varying interest rates) and I am currently carrying a balance of about $4500 in credit card debt.
    Even worse, I worry about my boyfriends debt (over $60,000 in loans and credit cards). I often wonder how I will even make minimum payments and begin to think about if I will ever be out of debt.
    I know that it will take a lot of hard work and dedication, but with those sorts of numbers in front of me, it makes it difficult to imagine being debt free. Hopefully I am on the right track thanks to many suggestions I have found on websites such as these.

  71. I’m 30 years old. My wife and I exited college with 42k in student loans between us. We added a few thousand more from graduate school later on.

    Last year, we were in a car accident. We had an emergency fund but didn’t use it to pay the insurance deductible for the accident repairs. I put it on my credit card instead. I figured I’d make interest on the float, and then pay it off. Other expenses came up, the emergency fund went untouched, and I didn’t pay the CC balance in full. I got the next bill, saw the interest charge and thought, “This is crazy! What are you doing!”

    I decided that was the last time I would pay a fee I could have easily avoided but didn’t due to a dumb decision. I also decided that holding low interest debt and working the spread on investments wasn’t working for me; the numbers came out, but it caused too much stress. And that stress provoked some silly mistakes.

    My wife and I agreed to take a KISS approach.

    So we made our informal budget more clear cut, stuck to it, grew our income, and paid off our remaining debt (32k) over the next 8 months. Now we’re able to save and invest about 40% of our gross income, with other money set aside for personal spending and interesting projects.

    The truth is, we pay more attention to the flow of our money now than we did before, but spend less time and energy on it.

  72. I will be graduating from college in about one year. Thanks to my two years of being a slacker, by the time I graduate I will have had to take out $55k in student loans, and thanks to the current administration, the interest rate is very high.

    I recently founded a Roth IRA account and am funding it regularly. I have met the girl of my dreams and she and I together have sat down and attempted to figure out how we are going to pay for life together. She has additional student loans. Neither of us has Credit Card debt. We both have successfully paid off car loans of 2-10k each. We think our educations are worth it, and she is going back for her doctorate in a year, and I will be getting a Masters when she is done.

    We manage our money via online banking, and once we are married will be consolidating our loans into one payment.

  73. 40YO single male
    ~$25k left on consolidated school loan for BFA in graphic design. Currently working as a web developer for a Fortune 500 and running a little web design side business
    ~$100k left on mortgage, but probably getting another $20k this year in an equity loan to remodel
    $2k Home Depot card at 0% interest for hardwood flooring (I’ll probably move that to the equity loan before the 0% expires)
    $6900 left on last credit card – mostly motorcycle-related expenses
    4 cars are paid for. 1 truck paid for.
    Bike is paid for except for the “accessories bill” mentioned above.
    No other debt.

    My side business doesn’t make me much money right now so I’m pouring my salary into bills and relying on the business income for “extras.”

  74. 23 years old – after a BM in Voice Performance (yeah, singing….useful?) and one year of graduate school living expenses (tuition and fees were covered by an assistantship and scholarship) I have about 30K in consolidated student loans. My father is paying the remainder of my debt from undergrad.

    I have 13k outstanding on a car loan. Had I known then what I know now, I may not have bought this car. However, it’s a great car that I can drive for another 140,000 miles. And I intend to.

    No credit card debt.

    I’ve begun to aggressively attack my debt with the ‘snowball method.’ In my plans to be debt free by 30, I have given myself 3 years to pay off the car completely (while I build my business as a self-employed classical musician and voice teacher) and another 3-4 years to kill the student loans.

    I’m currently saving 10% of my primary income for retirement and have taken a second job specifically for savings (emergency fund first then debt reduction and IRA contributions.)

    I live frugally and work a lot but I love seeing financial freedom in the future.

  75. I am 23 years old and will finish my MA in Sociology next month. I owe 17k at 3.25% and 8,600 at 6.89%, all from undergraduate loans.

    Since I graduated from a liberal arts school without knowing what I wanted to do in life, I decided to continue going to school in a field that interested me but not to pay for it. Fortunately I have been able to do this by taking a full-time union job at my university’s library for about 27k/year. Since I live in NYC, that amount is not as comfortable as it might be elsewhere.

    Though I have had to pay taxes on my graduate tuition as if it were income I have managed to do so (partially due to deferring my loan repayment) and still save a bit of money for a trip to Europe to visit relatives this summer without resorting to credit cards. I have also received a small promotion recently that should help to cover the impending loan payments for the time being.

    My debt is not nearly as overwhelming as that of some of the commenters above, but it remains a source of strain and fear. I am still not sure what career path I should choose, and know that my student loans will likely be a presence in my life for a long, long time no matter which of the available choices I make. I am trying to educate myself to make good financial decisions, and at the same time remember that my eventual goal is happiness.

  76. [...] Bookmarks: del.icio.us, digg, reddit Over at I Will Teach You To Be Rich, Ramit is collecting stories about debt, and as the first anniversary of my financial armageddon approaches, it feels like the right time [...]

  77. I’m 27. My only debt is my mortgage, which is currently about $120,000 USD @ 6.25%. Otherwise, I pay off my (2) credit cards monthly, my car is paid for, and I was fortunate enough to have state school tuition paid for by my parents.

    As for how it makes me feel…I don’t like owing $120,000 USD, but I keep telling myself it is better than paying rent. I’m sure I’ll feel better once I get a little deeper into my mortgage and see the interest payments level out.

  78. I am 29 years old female. I am currently in $51,900.00 in debt.

    I decided that instead of going to college full time, i decided that i could also work. Which lead me to believe that i would have money all the time for anything that i wanted. Well as i found out – that is not the case.

    So finally my living expenses started to out weigh my income and I compensated by using the old credit card.

    I, being young, thought – well i can pay this off – so i kept charging more.

    Now my minimum payments are 460.00 to the creidt card

    230.00 to a car loan and 178.00 to a student loan

    This has made for a very stressful situation..

    Finally i have learned to budget and just recently started to dig myself out – but this was a very hard lesson to learn and has brought me much depression but at the same time – i know there is light at the end of this tunnel.. there is no easy way out :(

    I would suggest to anyone young – Be responsible with your money – it will help you -years from now!!!

    I rent – and hopefully after i get out of this debt – i will be able to buy a house.

  79. I am a 27 years old single male graduate from college. I went to a private college and accrued $45k in student loans. I have $800 at 5% interest, $3000 at ~10% and the rest at 3%. I owe $600 in store cc, and $1800 on a line of credit for taxes.

    Since I am self-employed I am shooting towards paying off all but my 3% student loan by the end of the year and the rest of the student loans paid off before I’m 30.

    Although I hae my student loan debt, I am grateful to go to the private college I did. I am putting off buying a house until my student loans are paid off.

    I wish there was a better system to fund college that would help college students with a leg up on life. Unfortunately I don’t think that will happen any time soon.

  80. 27 year old female, single

    $9,600 in credit card debt – which is actually good for me, as I was in over $18k of cc debt just 2 years ago. The interest rates are: 0%, 6%, 7%, and 9%. I plan to have all of my credit card debt paid off by the end of this year. I am extremely anxious to get them paid off!

    Other: No student loan debt. I lease my car (2004 VW Jetta) for $323/mo. I plan to buy and pay off my car next year. I rent a decent apartment with cheap rent ($575/mo.). I put 3% of my salary into a 401k.

  81. Marriend 5 months
    Me: 27
    Husband:24

    Debts:
    -Credit Card $6,700
    - My student loans: $68,000
    -His student loans: $4,200
    -His Parents: $3,200

    Income: 72K/yr

    When I got married five months ago, I had a finacial breakdown when I looked at the debt we we’re going to be carrying. It’s also when I felt like I could start doing something about it because of the double in income.

    I made a lot of stupid mistakes. I was raised poor and I was told to expect credit card debt and other debt the rest of your life. I didn’t have the awareness to look into things myself. My first mistake was to go to a private collage, my second was to go to grad school without a real consideration to how much it would cost me. And my third, I used grad school loan money to pay off the credit card without changing my spending habits and ended up with more CC debt than before.

    The good news is that my husband and I have finanally got on the right track. When we got married we stayed in the same little apartment and actually went down to one car. We’ve read and learned alot about personal finance.

    The results are astounding to us. In the past 5 months we’ve paid off 6K in credit card debt. My husband has decided to return to school and we have been paying for it in cash. We’ve been able to pay for our formal wedding in cash. We are currenlty on schedule to have paid off the credit card in octobter of this year, and the parents and his student loan by February 07. Plus we’ve upped contributions to retirment and personal savings.

    My debt freaked me out 5 months ago. But since I’ve focused my energies on being finacial free the payoffs have been enormous. we currenlty pay 52% of our takehome towards this debt & my husbands school and our modest wedding savings. However, the end is only 8 months away and I’ve learned that if need be we can live well on 50% of our income which takes a way a lot stress and fear of lossing a job or taking a gamble on a life dream of business.

    I am uncomfortable with my student loan debt. Had this debt not been here I could be moving more towards recogoning my dreams, but I’ve learned alot in the process.

    Our goal for financial freedom is to be able to move out of the country to a developing one and spend our lives doing good works. After the debt is paid (sans my student loans) we’ll be able to sock about about 45% of our takehome pay for our dreams, and that’s what is exciting!

  82. I just turned 23 a couple weeks ago and I also just went through a period of life changing events. So here’s my current situation:

    -18k in personal student loans @ 4.75%

    -18k in parents student loans for me @ 5.75% (I’m assuming payments soon)

    -16k in car loan @ 6.75%

    -3k in credit cards @ 11%

    -145k in home mortgage @ 5.75%

    -0 in the bank

    -1k in investments

    -9k in equity from paid off life insurance

    Overall, I’m about at -250k net worth. I don’t think it’s such a bad position though, because the house was a good value, I love my car, and I all my interest rates are pretty low.

    The only things I regret are not saving more from when I was working in high school, and also going to college.

    Yes I regret getting a B.Sc. in Computer Science, because it didn’t really get me anywhere I couldn’t have gone on my own. I didn’t learn anything thats not already on the internet. And I don’t plan to go to grad school (as of now, maybe IP at law school, we’ll see).

    The good parts about college were more environmental and personal experience things. I’ve met some of the best people I know at MSU and I definitely increased my professional and personal network. I just wish I didn’t pay 40k for it … maybe 15 would be ok ;-)

  83. I am 27, engaged, a grad student with no debt. I got my first credit card at age 22 because I had no credit history and I wanted to buy a car. (I ended up paying cash for it, although I am still using the credit cards to build up a credit history.)

    My fiance is the same age and racked up several thousand dollars of credit card debt by the time *he* was 22. Since he quit the credit cards cold turkey, years before I met him, I helped him pay it off. He still has about $60,000 of student loans from his bachelor’s and MFA programs (both private schools), and is working at a coffeeshop. With my encouragement he now has over $2000 in a savings account, but is still only making payments on the interest of his student loans. We haven’t come to an agreement on how those are going to get paid off, but I suspect that he will come around to the idea of getting a better-paying job when he realizes that the house and kids he is so eager for aren’t going to happen without it.

  84. Law school student Link to this comment

    I was blessed to graduate from a fantastic college with no student loans, but I must say that taking on law school debt has been the best thing for me in terms of teaching me financial responsibility. Before I applied to schools, my husband’s and my income — about $60,000 in all– covered our living expenses and credit card charges, but we never seemed to save anything. Last year, however, we began saving with gusto and managed to squirrel away $20k for my education. This year, we’ve taken out the full amount of loans for which I qualify, $53,000, but only because my school will help me pay them back, guaranteed, if I take a job after I graduate that pays less than $100k a year (and it lets me keep assets, which was the point of taking it out). This year, we’ve managed to live on about $25k in a major metropolitan area, including rent, gas and groceries — let’s just say it takes a whole lot of cheap pasta and virtually no dining out — buy a car for $9k and we still have $13k in a CD to either a. keep as assets, if I take a lower paying job, or b. pay off my loans, if I take a firm job with a salary of $150k a year. We have no credit card debt but put all of our expenses on our Blue Cash card, which we pay off in full each month. The cash back, about $500 a year, is awarded in December and covers our Christmas gifts plus a few much-deserved nights on the town.
    This year, we plan to funnel the extra money we save — perhaps $15k — into our retirement accounts. I think taking on debt has helped me recognize the sheer power of saving.

  85. I’m a first year student in grad school, getting my MBA and have an undergrad degree in biotech…I currently have around $50,000 in student debt and I have forecasted a total net present value of my debt to be around $75,000 when I finish…I also was foolish enough to take out an $10,000 loan to get a motorcycle because apparently my ‘debt’ counts as ‘good credit’ and since i’ve been dying to get a bike, they allowed me too…so now I pay off my motorcycle interest payments with student loans…interesting huh? but I took that financial debt leverage risk because I am confident in my future and career goals and know that I’ll easily be able to pay this off within 3-4 years after I graduate, mainly because of my excellent networking skills and connections in the industry…not to mention my investment skills and ability to analyze market opportunities.

  86. I am 27 years old. I graduated with my undergrad degree with no student loan debt and a tiny amount of credit card debt that was paid off as a graduation present. That was 5 years ago.

    I spent a year volunteering for a pittance of a stipend ($850 a month GROSS) and using my credit cards to buy food and other necessitites. Then I went back to college to get my Masters in Teaching – another year of no money, living off my credit cards AND adding almost $30,000 in student loans. I now have roughly $25,000 in student loans and another $15,000 in credit card debt and a loan from my mom when I bought my house. Oh yeah – that pesky $210,000 intrest only mortgage. And my family wonders why I have trouble sleeping. I make really really good money for someone my age (incidently, not teaching, managing an office because it pays so much better), but it all goes to pay down debt and the debt never seems to get any smaller. I’ve cut up the credit cards, and I’m seeing a little bit of progress, but it feels like two steps forward, one step back. I’ve pared my budget to the bone, and other than living on peanut butter sandwitches and top ramen, I”m not sure how to divert more money to my debt. I have a 4 year plan which so far I’ve been sticking to. I hope to buy another house before I’m thirty, but that’s not looking like it’s going to happen unless I get a drastic raise or something radical happens.

  87. I am 28 and have zero debt. My wife is the same age and is also debtless.

    We don’t own a home yet.

    We don’t owe anything on our credit cards (we pay them off every month.)

    We don’t have any car payments, both of our cars are paid for.

    We don’t have any student loans.

    While I was fortunate to have my parents help pay my tuition (I supported all my other expenses including housing/food) she had to take out loans for her last 2 years of school. These loans were paid off within 3 years of graduating.

    Neither of us are MBAs (though my wife is getting hers…free courtesy of her work), PhDs, or anything fancy; we do however work at 2 companies in Fortunes Top 100 Companies To Work For list though neither of us make 6 figure incomes or anything.

    We both fund our 401ks aggressively (we’ll each max them out this year) and save a considerable amount of money each month and invest it in some stocks, mutual funds, and tax free interest municipal bonds.

    We live in a small but nice 1 bedroom apartment in an expensive area (Burlingame, CA – SF Bay Area.)

    So how does this make us feel to be debt free and really on top of our finances? It feels great honestly! You don’t feel overwhelmed by money at all and it allows us to live well within our means. Spend less than you make is the best rule we have and we honestly never have to go without anything. We make sure that if we buy something (last year we bought a plasma TV) that we can either pay cash for it, or put it on a credit card and pay it off at the end of the month. Don’t buy things you don’t need on credit, ever.

    Being successful financially isn’t rocket science, there is no trick to it….just pay off all your debt and spend less than you make.

  88. My husband and I are 30, we have one small child and another on the way in a few weeks.

    Income: $48K (I currently work part-time, partially because we can’t afford daycare, and partially because I’m back in school going for another degree.)

    Mortgage: $138K @ 5.875%

    Student loans: $40K combined for both of our degrees

    Car loan: $8K

    Credit cards: $7,300

    We had a plan when we had our first child so we wouldn’t fall into debt, but we didn’t count on my job going through layoffs and me having to find other work (I was a telecommuter, so we had no daycare costs even though I worked full-time). We burned through our emergency fund pretty quickly and then resorted to credit cards when we couldn’t afford things. Since then, we’ve never been able to fully recover.

    For babysitting we rely on friends and family, although we just lost one of our caregivers unexpectedly, so it’s possible I may not be able to go back to work after maternity leave because we can’t even afford part-time daycare for two.

    We’re at the point right now where the credit card amounts are going down instead of up, but it seems like we’ll never get them paid off. We know it’s going to be tight for at least another 2 years, until I finish school and can have a career that pays more than anything I could get now.

  89. I am 24 with $25k debt. $15k left on my car loan (5.39%), $10k left on my student loans (5%). I have two bachelor’s and a master’s from a top engineering school.

    I would like my debt paid off, but it does not bother me much. Instead of paying it down faster, I am maxing my retirement accounts and saving the rest in a 5% savings account. I have enough in the savings account now to pay off the car completely, but I read that it’s better for your credit score if you don’t pay your loans off entirely less than a year after getting them. I am aggressively trying to build my credit so I can buy a house (and take on more debt… hmm).

  90. Here’s a story of someone with just a little bit of debt.

    I’m 22, and graduating from college in a month. I have no student loans because I was lucky enough to have free tuition. I have about $1000 in credit card debt, which I racked up after my summer job ended and when Christmas came around. I’m not really worried about this debt. I can work a few odd jobs (like petsitting) over the summer to pay it off. Cheers (and reading the comments makes me realize how lucky I am.)

  91. I am 26, I graduated from law school nine months ago.

    My grandmother, God rest her soul, left me a $100K life insurance policy when she died my second year of law school. I used that to pay down all my undergrad debt and about 5K in 0% credit card debt. Without that money, I don’t know what I would have done.

    I graduated from law school with $95K in student loan debt, and I took out $25K to buy a car (neccessity). I make over 100K and have paid down the higher-interest student loan debt to $50K, but I have barely touched the principal on the car loan. I also seem to have accrued 8K in 0% credit card debt moving and starting a new job and such.

    I think about this debt all the time. I check the websites once or twice a day. I feel guilty buying clothes for work. I feel guilty eating out at lunch. And I make a ton of money! I don’t see how I can possibly ever buy a home with my huge tax bracket and no cash for a down payment.

  92. I’m 31 and my husband’s 29. We have about $25K in credit card debt and $60K in student loans. We’ve paid off about $12K over the last year.

    We’ve set up a good payment plan, but it’s going to take a few years. In the meantime, we can’t buy a house, or really do much of anything. Our standard of living is way below our peers.

    The worst part is that we feel like we’re ready for a second child, but can’t afford it. This really stinks because I’m not getting any younger. The longer I wait, the more dangerous it is for me and the baby.

    I’d actually prefer to adopt, but I don’t ever see us being in a position to do that.

    It’s really painful to have our family plans crippled by this debt.

    We made big mistakes with our money early on, of course. The problem now is that we’re paying this off much more slowly than we could because we’ve chosen fulfilling careers that pay next to nothing. It’s easy to say we should just switch, but we have advanced degrees in our chosen fields, and no education or experience in anything else.

    We plan to encourage our daughter to study math, science, and business. We’ll be very disappointed if she follows in our footsteps.

  93. I graduated college with NO debt – worked my way through school (it was even a Private Institution!) However, when I graduated I was socked with $15k in credit card debt due to massive dental work I had to have. You cant plan for that! As I am drudging myself out (only a little bit left) I am realizing the importance of an emergency fund – regardless of where you are in your life. Stuff happens!

  94. I’m young, so I’ll start with my parents. I didn’t realize it growing up, but my dad was pretty out of touch with the reality of “yes, you have to pay off what you put on a credit card.”

    When I was in middle school and early high school, my parents were convinced to join Amway (not a good choice, especially for their personalities). They were very open about it having caused them to run up $6K on the credit card(s?).

    Neither of my parents finished college (though my mom is working on it right now), so they borrowed against their retirement to cover what I couldn’t cover with scholarships and jobs. Thankfully, I was too afraid/dependent to get credit cards from any of the campus offers.

    I got my BA in English because I liked the program, but didn’t have any plan for what I wanted to do after that. Oops. So after graduation, I worked my old PT campus job, took enrichment classes, lived in subsidized housing (with a church friend who needed another warm body there to keep her subsidy), and barely scraped by. When my old car broke down, my mom gave me a few $500 interest-free loans, knowing I’d pay her back but couldn’t cover it then. The 2 old cars I owned (not at once :) at that point in my life I contributed only $500 toward; the rest they covered.

    A year out of undergrad, I was accepted into a MA program (digital rhetoric and professional writing, not that you’ll know what that is). My assistantship paid a bit more than I needed to live on (for the first time), but because of my desire to match my then-boyfriend’s tendency for eating out and expensive gifts, I saved very little and still tended to live at the bottom of my checking account.

    Anyway, ended up at an editing/writing/misc. gig at a small business that went from a part-time job my last semester to a full-time job. (Also broke up with boy and ended up with someone more mature and frugally minded — but that’s another story.) Joined the local credit union, got a savings account and a credit card, keeping the latter paid in full, for fear of total parent-esque meltdown.

    Last fall, I started following personal finance blogs and started investing (and having money to do it with). Yay Sharebuilder promos. I just paid off the first car I’ve ever bought for myself (a ’98 Camry, bought last August) and started a Roth IRA … and I’m finally salaried ($40K, in a mid-sized Midwestern city).

    I don’t have a lot in savings … especially since I think marriage may be in my near future … but I feel like I’m making good progress. I’m scared, though, that I’ll get seduced by the desire to have nice things at the expense of my future, or that of others (my family, groups to whom I value giving). I’m encouraged by how far I’ve come in such a short span of years (I’m 26), but still tend to worry that I’m going to blow it somehow. I also recognize how much my parents have sacrificed to help me get to where I am today. I would never have called myself spoiled, when I was in college — I certainly wasn’t living like it! — but I was blessed, for sure.

  95. Wow. These comments are really interesting, and it blows me away to see what kind of debt people have to deal with. But to be honest, I’m perplexed. I see people pursuing graduate degrees that might not help their future earning potential, or continuing to live a consumer-driven lifestyle, while still carrying massive credit card debt (the worst kind!)

    I graduated college debt free due to the kindness of my parents. I went to a liberal arts institution, but when it came time to decide what to major in I added what I perceived to be a “useful” field in addition my my passion, thus double majoring. After graduating I got a job at a great company with a good salary, but I have tried not to change my lifestyle too much. i still drive the same old car I drove in college. I max out my 401k. I save a lot of what I earn.

    I know that I was lucky, in that my parents paid for college. But I’m in a position right now where if they hadn’t, i could easily pay them back. And I got to this position by working really hard in school. It bewilders me to see people making choices that increase their debt so heavily. There are really good, cheap state schools. Buying a house or a new car is probably not the best idea when you’re carrying credit card debt. There are cheaper cities, and there are more expensive cities.

    I understand that a lot of people did everything right and still ended up with debt, and it’s a heavy weight to have around your neck. But there are also different kinds of debt — it’s reasonable to carry student loans for a while, especially if your interest rate is

  96. Very interesting stories to read.

    Seeing a couple of good debt stories, figured I’d add my two cents. We have a $215k mortgage in California, on a $600k house. I love this debt, as it has locked in a low price of housing in a VERY expensive area. The purchase price was closer to $300k in 2002. But anyway, in our younger years we paid down a lot on our mortgage and these days we really don’t see the point with such a low fixed interest rates and having such low housing costs in general, for the area. We have been using the money for retirement and investing instead, which has paid off far more. We are 30 today – owned our first home at 23. We made it a general rule never to take on debt – with the exception of the mortgage. We would rather both work 2 jobs than have any consumer debt, etc. Taking that attitude young has brought us tremendous wealth and felxibility in a short amount of time. These days we are realy slowing down to enjoy life more, but have that luxury with no debts.

    Anyway, talked about moving to Oregon and cashing out much our equity, but we would keep a mortgage at these interest rates, would buy us much time and flexibility with our young kids, etc.

    I think we used to be anti-debt to a fault. In recent years we took a 0% loan for a year to pay for a car, and the experience was so good, we have decided to borrow $10-$20k from credit cards at 0% and invest the money in the bank at 5%+. You have to play the game carefully, but you can really use credit cards to your advantage if you are willing to read and understand the fine print. We expect to make $1k – $1500 this year from our ccs – rewards and 0% money in the bank.

    For us our debt is good, but I know all it takes is a turn of bad luck for the tides to turn.

  97. Wow, I’ve always known there were people with similar problems as mine. I’m glad I’ve found this site, however I wish it had been available 15 years ago.

    As a teen, I always had good credit. I lived in a small town and my family was well known, so I had my own charge accounts at the gas station, grocery store, hardware store, and so on. I worked hard and I always paid the account when I got the bill.

    My first experience with debt came about the fall after I got married. My wife decided we needed living room furniture and went and purchased a living room set on credit. Since I had done business with the furniture store, the owner knew me and new I would pay for it.

    It was 3 months interest free, but we didn’t get it paid off and the interest accrued and then it snowballed from there. At some point we got in a bit of a spending competition and, due to the easily available credit, eventually ended up with $87,000 in consumer debt (not counting our mortgage). This created other problems, like me working all the time, and eventually we divorced.

    I assumed responsibility for all of the consumer debt since I had a higer income, but I was unable to meet the payments. I left her the house. I had a neg. net worth of around $75,000.00
    I took anther job and ended up working 14-18 hours a day to keep up. I eventually got to a break even point and seven years after my divorce I had a positive net worth.

    I’ve dedicated the past two years to making a concerted effort to GETTING OUT OF DEBT. I’m tired of being enslaved to the creditors. I’ve fallen behind in my taxes and finally filed a current return when it was due this year.

    I currently live in a 32 foot camper trailer (I’ve upgraded from the tent trailer I lived in for six months). The Idaho winters are cold but the knowlege that I’m going to be 100% out of debt by the end of this year warms me at night.

    My target out of debt day is Nov. 1st 2007. Almost 10 years after my divorce and well over 15 years since we borrowed money for that living room set. I hope this site will continue to caution young people about the dangers of debt, even as small as a $300 loan for a couch!

    I don’t know who said it, but it was a quote that was said to me when I was younger. “Interested is a matter of understanding, those who understand it earn it, those who don’t pay it!”

    Thanks for all the good information and keep up the good work.

  98. I’m currently 23.

    My parents sent me to a private university through the money of a few rental houses I maintained. I still maintain them and give all the profits to them.

    I worked full time to pay for all my living expenses, including books, food, etc.

    I went to full time school and graduated in 3 1/2 years. I have saved over 17k in retirement funds (401k and Roth IRAs).

    I have saved over 25k and put them all in short term cds in hopes of buying a house.

    I have been working at my job making 50k for a little less than 2 years.

    I have had a credit card since I was 18 and have no late payments (wanted to build credit). I bought an expensive car at an auction for about 75% of what it was worth where I paid 12k cash with all the money I saved. I have no car payments and no debt.

    I have less than a thousand dollars in little investments like stocks, mutual funds and DRIPS.

    I am in the process of getting engaged and moving from the US to Canada in hopes of making double than I currently make in Toronto. I was born and raised in NYC.

    I feel so lucky after reading these comments and have gotten here by reading blogs like these and by also being smart and staying out of debt. I also feel grateful for my parents who allowed me to stay out of debt.

    I feel that paying off your debt is more important than anything! I take my lunches to work and can’t understand how people are in debt at my job and continue to buy $10 lunches every day! I don’t understand why people take vacations when they can’t afford it! When I was in college, I can’t understand why people didn’t cook more often especially when they bought everything off credit. I don’t understand how people my age buy outfits on credit cards and wear them a total of 5 to 10 times and can’t afford them! I really don’t understand people paying 20k for a car when they know they can buy something for considerably less that still does the same job (that’s only if you can’t afford it). Why does the 22-26 year old have to buy a BMW and spend half their pay check paying for it when they say they don’t have no money to save?!

  99. I found myself pregnant my last year of graduate school. My husband, 3 years my senior, has a 3 year late start in school. So I finished in 2005 and he will finish his masters in 2008. I have 32k in loans for my degree. We will have 23k for his. Our second baby is coming tomorrow.

    3 months ago I felt like we were in financial armageddon because I calculated how long it will take to pay off the 55k in loans. My loans have a 1.625% interest rate but its the principal that is killing us. We live below the poverty line and don’t have much money for food. But at this point I refuse to take out any more loans. Because my husband is studying engineeringing everyone I have confided in tells me I am “overreacting” and we will be just fine. But I don’t feel that way – especially with two other mouths to feed. We have been able to break even the last three months by raiding what food we had on hand, and not replacing household items. Next month we add child #2 diaper bill. In some ways though I am feeling more optimistic. Its the first budget I have tried in the last 6 years that has lasted more than a week. My current dream – to get a minivan so that I can stop bending over to get kids in and out of the car – I have back problems.

  100. I’m 28 with a BA in Hisotry. Graduated from a 4 year private university which, in retrospect was not the right place for me. I have about 30k in student loans (I haven’t run the numbers in a few months so it might’ve dipped below that number I hope I hope). I could’ve gone to a huge public university for free, but I’d rather be in debt for a good education than not in debt for a mediocre one.

    Just paid off about $4k in CC debt that had started accumulating when I was living abroad. Took me about a year to fully pay off.

    My car has around $400 left to pay but that will be done before too long.

    I’m not maried, don’t have a mortgage but will be starting graduate school in a year.

  101. I am 25 and am trying to be debt free. My husband and I have 21k in student loans, and 190k left on our mortgage. I just quit my job to be a stay at home mom. So far we paid off 48k in debt, including two cars, a small student loan, credit card, and a HELOC. We paid all of that 48k off in about 18 months.

    Now that I no longer have a job (which dropped our income by more than half) it will be a lot harder to pay off the last of our debt. But I can’t imagine keeping it for 20 years. I am trying to talk to all of my friends and they just think I am nuts and they continue to buy things on credit cards that they cannot afford. If they only knew how much money they were throwing away on interest!

  102. I am an immigrant in this country, came here to study 7 yrs ago. By the time I graduated, I had $20,000 in debt. Most of the credit cards I had were used for paying my tuition. I dont remember ever spending for something which I didnt feel was necessary. Out of college, the job market was pretty bad, it took me a while to find a job, and hence I missed some of the credit cards payments back then. That was an aweful period, feeling of being broke, no sense of security about future. It took me 3 yrs to repay all the debt and get my credit on track.

    Now I am debt free and have positive net worth. I mostly use excel to track my budget, spendings, credit cards, investments etc. My wife thinks I am addicted to this and that calculator is my best friend. Our past is somewhat responsible in how we behave/act in the present. I am just little extra careful so that I dont experience those days ever again.

  103. I’m 31; husband is 45 and brought a LOT of consumer debt (about $50K) into our relationship. We have paid down $35K of that over the past five years. Our consumer debt is still around $28K.

    I have about $30K in student loan debt (I have a B.A., two Master’s, and a Ph.D.). We racked up some of our consumer debt during the lean years of grad school–mostly spent on moving, car repairs, dental work, and vet bills.

    Our debt worries me a lot. We have taken steps to pay it down, but each month we barely break even–even though our combined income is comfortable by most standards. But we live in an expensive state, rent, and send our son to daycare part of the week because we both work. It’s tough.

    I see us being in a much better place in 5-7 years, as we are now paying down debt regularly and not racking up new debt. Still, it’s frustrating.

  104. With the tax deposit refunded overnight, I paid off the last of what had been better than $26,000 in credit card debt this morning.

    It took 3 and a hlf years and let me tell yah, it feels good. Damned Good

    I still have a $5,500 401K loan to pay down, but at least I am paying myself. Now I will park what I had been paying towards the card debt in an HSBC savings account until I build up the lump sum to pay it off. Goal for that is December. I found it vital to establish concrete goals.

    When I turned 50 last September , is when I got real motivated. Kinda figured it was a better way to spend my midlife crisis than lurking about in topless bars. I was in a CCCS plan that was structured to pay off the highest interest rate cards (2 Discover accounts at 16%-they don’t come off their rates for CCCS plans) last.
    Rueful words of wisdom:get educated and take control even if you are under CCCS!!! They have no vested interest in saving you every dime that could be saved.

    Anyway, I paid off over 10 grand of that 26 since September. I was lucky in that plenty of overtime was available.

    As I watched the balances dwindle, I did find it difficult to stay disciplined. Since the beginning of the year I have put myself on a strict budget and have found the YNAB software program to be quite helpful in sustaining the motivation.

  105. Wow! I am shocked by all the debt stories. I guess mine is much more positive. I’m 24, female, single, and living by myself (no roomates) in a high cost area (SF Bay Area).

    I have about $15k in retirement savings, and about $25k in regular savings. I do have some debt $2.5k in 2.5% student loan, $13k in a 1.9% car loan, and about $9k in 0% credit cards. I have enough money to pay off all of my debt, but choose not to since I’m making 5%+ on the money while it sits in savings accounts. I make about $75k/year.

    I was lucky enough to live in a state with an excellent public university system and have my parents pay for the majority of my education. Still, I think I actually live very, very well and could definitely save a whole lot more than I do. I take an international trip every year, have a very large 1 bedroom apartment all to myself, drive a new car, go out to eat often, have completely furnished my apartment with all new furniture over the last 2 years, visit a spa regularly (mostly for manicures and haircuts, but the occasional massage for a treat as well).

    My only real concern is that I’d really like to own a home someday, but in this area, anything I would consider buying is between $400k-800k (this is 1-2 bedroom condos I’m talking about, nothing fancy). I am confident that I will be able to save for a down payment, but with housing prices this high, even my (very high for a single 20-something) income won’t qualify me for the mortgage I would need!

  106. Wow – great stories! I’ve got a doozy that should help everyone feel good!

    Husband & Wife – early 30s
    Total debt: ~124K !

    Why does this not keep me up at nights? Well first, 2 yrs ago it was much worse (IRS bills, high interest rates, etc), so progress always helps!

    Second, 17K is student loans, locked in at @3%

    Third, 55K is business debt (we own a small internet dev biz) which will hopefully be paid off in the next 10mths

    Finally, our personal debt is now under $50K with most on 0% CCs.

    Do I still worry? Yes-Everyday! But the last 18mths has taught me many financial lessons. And know with patience, determination and ingenuity, we will be debt free.

  107. I am 34, single, and $6,900 in debt (grad school loans, paid down from $18,000 over four years, while working full time trying to finish a PhD).

    On the plus side, I have $65,000 in a 401k, $29,000 in mutual funds, $20,000 in savings and $3,000 or so on average in checking. Car with only 30,000 miles paid in full.

    The 401k gets fed 15% of my pay each month, with another 5% match. The mutual funds get only $200/month; savings, $500; and about $400-$500 towards the student loan each month.

    I am saving to buy a home, use coupons, track all my spending, pay cc’s in full each month, and have a credit rating of 785 last I checked.

  108. I have no debt. I have never had any debt. My father was a working class guy that paid cash for everything. He taught me how to invest in stocks. I help others do the same. I don’t promise to “make you rich”. I promise to change your way of thinking about money and lifes little challenges. I am not a guru. I simply run the numbers and show you how I did it, as I do it. I have no links to try to make money from my blog. I don’t view you as a potential click-for-cash. I have a real job. If you’d prefer to wallow in your debt and the pity you enjoy, do not visit my blog. We have no room for that.

    Note from Ramit: BxCapricorn is referring to his post where he comments that “Stupid people have debt” and I leave a comment.

  109. Bunch of fuckin crybabies. You should have thought twice and spent once. I have debt, I own a house in Vegas so it’s a couple hundred grand. Something else I have is….a ton of money, cash money. I’m a money making machine. The best advice for any young person is get rid of all credit cards. If you don’t have cash you can’t have it even if you need it. Don’t get married and don’t have kids until you are debt free. Learn how to make money. Stocks, mutuals, whatever, just make money. People who say money isn’t everything are fucking idiots. Money makes the world go ’round. Hold on peeps, I’m driving.

  110. It blows my mind seeing the education debt people rack up these days. Makes you wonder the value of a degree if it cost you a mortgage-sized debt when you graduate. I worked part time and went to a public university. My dad gave me $50 a week to help out and I graduated with $3,000 in student loans.

    At one point in my life my wife and I carried $250,000 in total debt – mortgage, home equity loan, vehicle loans, credit card debt. It was stupid, we were making very good money and still spending more than we earned.

    Now our debt is limited to $120,000 in mortgage debt, financed 30 years at 6% and that’s it.

    My wife saves over 20% of her salary in retirement accounts; I put away 15%. We both also put away another 5 – 10% into taxable investments and cash savings. I give another 10% of my gross pay to charity every week.

    Here’s how my attitude about money has changed: every dollar I spend or consider borrowing I carry forward 30 years to see what it will cost me in retirement had I invested the money instead.

    That $27,000 in credit card debt I was carrying 3 years ago cost me over $470,000 in retirement funds I won’t have 30 years from now.

  111. [...] Debt Stories(iwillteachyoutoberich) I have $50k in college loans. ~14,000 is at 4.5% interest and is actually a loan my mother took out for me, that i am taking responsibility for, the rest is at 3% interest. ~$400 a month in payments Payments total . I also have $5000 in credit card debt, paying ~$300/month…but it never seems to go away lol [...]

  112. I graduated from an Ivy League law school a year ago. I make about $80k and have about $70k in federal loans at 4.5% and $60k in private loans at about 7.5%. I pay the minimum on the federal ($500/month) and as much as I can on the private (about $1500/month). I don’t enjoy thinking about the fact that I owe $130,000 but I have no problem making the payments and my degree allowed me to get a job I really enjoy. So overall I think it was worth it.

  113. I have a fancy wedding coming up in Vegas and I refuse to get myself into a massive amount of debt for the rest of my life, so we are doing a bunch of fundraising ideas to reach a savings goal of $5000 for our wedding. Too much debt is scary.
    Saving for a Wedding

  114. Working Toward Freedom Link to this comment

    I’m 30 and my husband is 38.

    I attended college and had scholarships that covered most of my tuition. I left college with $3000 in student loan debt that I paid off soon after graduating.

    Unfortunately, I succumbed to the temptation to sign up for credit cards while in college. I did have a part time job at the university bookstore, so my credit limit was $500.

    I spent more than I should and eventually reached the point where my paycheck barely covered the minimum payment. I missed paying the minimum by a day (payment mailed too late) and the interest rate jumped to a very high rate. I received a collection call at my parents house one night and after having to explain what had happened (the missed payment), I worked additional hours at my part time job to pay it off quickly.

    Ever since then, I have been scrupulous at paying down my debts. However, I never became completely debt free before something else presented itself for purchase.

    For example, I paid off my student loan debt, but I was in a car wreck in my fiance’s car soon after we had paid it off. We went to a dealership and purchased a new car (stupid .. should have gotten a used car), which put us back in debt.

    That car is now paid off, but we have a mortgage, credit card debt, and a small auto loan for a truck we made a 70% downpayment on.

    My husband and I have no children and we are paying down our debt steadily (Dave Ramsey fans).

    This time, when I pay off credit cards, I cancel the account when the zero balance statement arrives.

    This time, we have an emergency fund of $1000 and we’re putting our 95k annual income toward basic living expenses and sending the rest toward our smallest debt.

    Following Dave Ramsey’s plan, we will be debt free in 3 years, with a paid off home, no other debt, and two paid off vehicles in good condition.

    Our 401ks are funded with 6% of our income, but that will raise to 15% of our income in 2 years.

    I’m looking forward to the day when I have no debt and no payments.

  115. I earn minimum wage and have almost $10K in student loans, plus about the same in credit card debt which came from pulling cash to make student loan payments (in an ultimately futile attempt to avoid default on the student loans) and a business startup which ultimately failed due to an extended illness and ospitalization.

    I have never made much more than minimum wage, and I have no idea how (or even IF) I will ever get out of debt.

  116. I’m 35. Married 9 years, two kids.

    Family income is about $110,000.

    We owe about $145,000 on a first mortgage of a house that’s probably worth 3X that, so we decided to fix it up with a home equity line. New bathrooms, kitchen, windows and roof later, we’ll have spent about $100K on the HELOC. I don’t like the additional debt, but the rise in value of the house makes it possible.

    First mortgage is in year 4 of a 7-year ARM at under 5%. Some time in the next three years, we’ll probably roll the HELOC and mortgage together into a new 30-year. I don’t mind carrying the mortgage debt as long as I’ve still got a healthy amount of equity in the house.

    No credit card debt. We charge everything we can to an airline-miles card but pay the balance in full each month.

    I graduated from college with a job that paid pennies and $2K in CC debt from general stupidity — CDs, bar tabs, things I didn’t need/couldn’t afford. As soon as I got a job, I devised a plan to pay the balance in full over the course of the next 18 months or so. It wasn’t easy (I was making NOTHING!!!) and I had to work hard and sacrifice to pull it off. And that is the last time I ever paid a penny in CC interest.

  117. 28 years old. $161k in student loans. About $100k is federal consolidated at around 5%. Made the mistake of thinking that a second-tier law school in the Bay Area would be worth it. I’m second guessing that decision. I and most of my colleagues don’t have job commitments after the bar exam this summer. Not looking forward to loan repayment while doing temp work. And big firm or Ivy-educated young lawyers think they have it rough? Please.

  118. Here is a story from a parent who couldn’t qualify to take out a loan for child’s college education. I owned my own business which failed in 1987, so I had to file bankruptcy. Due to that, I could never get a loan or credit card again for almost 15 years. So, my child had to apply for student loans. When child graduated in 2003, child had over 50k in student loans. It was a heart breaker. The good news is that child went to the college and career of child’s choice. Not like me. My parents forced me into a career I hated, thus I never worked in the field and never made a decent salary, thus my try at self-employment. Child’s choice of career paid off because by now, child’s annual bonuses have helped pay down college loans (@2%).
    My child has learned, probably by living through my mistakes, the value of a dollar and manages child’s money extremely well. Child still has 1st buck made from first summer job.
    Things improved for me also. I learned more about financial management and have helped child pay down student loan a few thousand. Neither one of us have charge cards. They are the ruination of everyone.
    I feel for all who have posted on this site. it is not an easy road. Good luck to all.

  119. Debt from college started with $15,600 and now with interest it is $20k due to insufficient funds, WOW. I have an IT degree and it took time to get due to economic downsizing in 2002. I have credit card debt right under $5k and a SUV payment at $460 a month. No more worries from this day forth. I pay myself first by increasing my assets and decreasing my liabilities. That’s life in simple terms. Now, the funny part I never made a loan payment due to no job at the time with my credit score between 660-700 in 2007 but was wondering how can I pay this loan off in full . If you have the proper solution please respond. In conclusion, to everyone enjoy what lies within pay your self first(by investing) and do what you can on other expenses (liabilities). The plan for life should be Financial Literacy, not job, career, or social secuirty, but happiness to you and yours.

  120. Unless the US provides choice and access to medical care to every citizen, it is very difficult for the citizenry to maintain solvency. In addition to this, the credit agencies and the public perception that credit scores matter are things that do not serve us.I had excellent credit at one time, and acquired a debt of over $200,000 on credit cards due to health issues that prevented me from working. The debt was comprised of living expenses, not medical expenses and covered over 5 years. The majority of that debt is out of statute, but I now have $12,000 of medical debt (excluding a related doctor bill I may or may not receive) from an emergency room visit that resulted in my being admitted for 18 hours, treated for a heart attack I didn’t have, and leaving with no diagnosis. All of this could have been prevented if I could go to the doctor of my choice rather than the emergency room.I have no intention of paying any of these debts, am not employed and do not plan to be, as it would not serve our household. I live with a man who supports us on an income equal to employment at McDonald’s in a non-managerial position. We both need medical, dental and vision care, and believe these things to be entitlements. We do exceptionally well on the income and do not care about credit reports or scores, and would never finance anything or arrange for payment plans. Saving is worth doing; paying professionals would be about the biggest sin I can think of.

  121. We’re better off than most families. We were lucky in our real estate deals; selling one home on the west coast at the top of that market; but then we bought our new home at the market peak in our current town. Due to the cost of living differences, we still came out ahead in that deal.

    We currently have no credit card debt (we converted it into a 8.5% interest equity loan) and no car payments. We have a 30yr 6.25% mortgage that is approximately 50% of the value of the house. My wife and I have lived in the house for a year but spent the first 2 months of ownership doing upgrades and repairs. At some point we lost track of our spending and what was to be $10K-15K in improvements became $30K+ then add in some medical bills and we were suddenly looking at $40K in credit card debt with payments beginning to balloon out of control.

    The wisest thing we did was to convert that CC debt into the Home Equity Loan. We now have essentially mortgaged 66% of our home and can afford to make the monthly payments with no problem. But our credit rating dropped a bit due to a few late bills. Further financing is not an option for the next 5-7 years. I think the next step is to set a budget and find savings that don’t compromise our lifestyle too much. The reason we moved to our current location is so we could live the lifestyle we want.

    We’re a two-income family with one child. We’ve been married 4 years but never had a budget. This month marks the first time when we’re actually living within our means. However, my wife wants to go part time when our son enters Pre-Kindergarten in a few months. That will put a strain on our finances as not only will we lose half her income, but we’ll also lose her health insurance. This while I am struggling building my hobby (a blog) into a second job with enough extra income to pay down our home equity debt and build up some savings. I’m hoping it’s not unreasonable to ask my wife to continue working full time, even if it means our son will be in day care longer than we would both like.

    How can I convince my wife that we need her income and that as much as we’d like to have our son at home with her instead of in Day Care, we have to face reality or severely cut back our lifestyle.

  122. I have another anti-debt story.

    My parents are paying for my tuition for undergrad so my debt is $0 from there.

    I have a credit card linked to my parents. Virtually the only things I put on it are public transportation costs (I don’t drive). It helps that they are constantly auditing it to keep me careful.

    For small expenses (laundry, small food purchases, etc.), I pay with cash using the dividends I get from my investments.

    Current debt level: $0

  123. I think a comparison of me and my partner sheds a lot of light on the problem with borrowing to pay for education.

    I got a BA from a good University. I owe about $22k on student loans and about $6k on other debts I got while going to school. Now I make about $50k-$60k a year at a good job.

    My partner dropped out of college, and has no debt at all. He makes between $35k-$40k working at a coffee shop.

    Yes, I make more than him and have a good job, but after taxes and all of my debt bills, he has MORE money to save and for living than I do.

    Makes me wonder if college was really worth it.

  124. To they guy who says that “stupid people have debt” — I would point out that the majority of debt described in these comments are student loans.

    And the people who went to Ivy League Universities are leading the pack.

  125. I graduated 4 years ago with over $40,000 in debt from a prestigious Ivy League university. I consolidated the loans and pay 3.25% interest on them. I work for a hedge fund on Wall Street and made over $500,000 last year and will make much more this year. I could never have gotten my job without going to a top Ivy League school. By the time I’m 30 I’ll have a couple million in the bank. Anyone who thinks college loans are a waste and you should go to a lesser college is a fool who will one day look back and wonder why they never amounted to anything.

  126. I’m 33, married, and owe about $900,000 in mortgage debt – $600,000 for our house outside Boston and $300,000 for a two family we rent out. My husband and I make about $280,000 a year between salary, rent – fortunately it is enough to max out the 401ks, pay mortgage and taxes and keep an emergency fund. I also pay an extra $500 a month on the house mortgage. I went to public school with scholarships for college and medical school, and was able to pay off my $16,000 student loan with money I managed to save during my residency. I was crazy frugal during college and med school and residency. It is nice to have it all pay off… I do worry about the enormous mortgage in case of an emergency (it’s bizarre to think we owe almost a million dollars!), but we have life insurance and disability insurance so we should be covered in case of something dire.

  127. I am 36/female/childless and live in the Seattle area!
    Basically I am debt free minus $2000 in cc debt. I just transferred that to a no interest credit card and cancelled the other card. I will have that paid off by August 2007.
    I went on scholarship to a great university and paid off a decent car in a pretty short amount of time. (Bought my parents 1998 Avalon for blue book value! I don’t care about having a new car anyways. Pointless)
    Best thing anyone can do is save for retirement, invest and graduate from a great university. Also don’t run up cc debt. Forget about living beyond your means also.
    The only thing I am in slight limbo about is that I rent instead of own a house/ condo. I have all the amenities at my complex so I don’t have to go to the health club etc…Anyhow, I don’t plan on having a child and marriage isn’t a priority so I am thinking renting isn’t so bad for me right now. I max out everything else (investing/retiring/emergency fund) and I manage my money very well and live way below my means except for the rent I pay here. Its worth the trade-off in my view.
    I feel for people who are in over the heads for debt. I couldn’t live that way seriously. I made it a point to never be in credit card debt beyond what was reasonable. Anything beyond $3000k is unreasonable credit card debt to me. Everyone is different though.

  128. My debt threatens to drag me under, every day.

    I owe
    $35K in credit card debt
    as well as $13K for a loan, which was originally intended to get me out of debt.

    I moved to a new state this year, for a relationship, and have been unable to find work- even minimum wage. I’ve worked a few odd jobs here and there, but my total earnings this year are around $5K.

    About $22K of the debt was incurred this year, for living and medical expenses.

    I also owe about $9K on my car loan.

    I just got a job, back in my home state. I will be making around $23K a year.

    I am really committed now to digging myself out of this debt in whatever way I can.

    I want to educate myself about personal finance, because I have been living with my eyes shut for far too long.

    I am 35 years old.
    I am embarrassed every time my bills come. I know it’s my own fault. Sometimes it feels like I will never get out of debt.

  129. [...] More stories from iwillteachyoutoberich readers about their debt. [...]

  130. Thanks for the anti-debt advice, Zian! I will just call up my parents about paying my student loans and start using the dividends from my investments for cash! Why didn’t I think of that before?

    Hey BxCapricorn and Guns, I’d rather be in debt than be an asshole. If these comments are so pathetic and dumb, why are you reading them? Isn’t your time valuable or something?

  131. [...] I Will Teach You To Be Rich encourages his readers to sound off their own stories – and many of their experiences on debt are [...]

  132. Hi,

    I’m 29 married with a wife, 28. We are currently residing in Australia. Before Australia, we are living in Singapore.

    We have about USD$5,674.89 in debt, but they have been refinance (balance transfer), so that the interest is about 2.5% per year. These debts incurred as migration cost to Australia.

    We also bought a 4 bedroom apartment (in Singapore, 80% or more lived in apartment), and rent it out. The reason why we do it is the rental is more than enough to cover the mortages + misc fees. Housing interest is about 3 to 4 % pa, rental yeild is about 7%. When we bought the apartment, the housing interest is near 1%; too bad we didn’t get the interest fix; on variable interest rate.

    We are expecting a baby on Jan 08. We shouldn’t have to worry much since hospitals (checkup) are paid by the govt; we do not need to get private insurance. AUD$5k for baby bonus + parenting payment + rental assist payment.

    We are aiming to save 50% of net salary, and pay back the Singapore debt by the end of this year. Then our next goal is to gather a sum of money $10k to $20k to either do stocks or property investment. If we were to buy a house and rent it out, we could claim tax deductions of maintenaning the house as well as get rent assist.

    We are on a single income, and my income is average graduate level. Even by saving 50%, we are able to live comfortably.

    Car is a 1990 Mitsubishi Magna Auto Sedan 2.6l, bought at USD$1.5k and runs well.

    I bring my own lunch to office.

    I wear thick glasses and it’s horribly expensive to get it done in Australia. I get the prescription in Australia (A$30 – free since it’s covered by the govt), and get it made in China and air mailed it back to me; it takes about a week – same if it were done in Australia. In Australia, the lens will cost about A$250 excluding the frame. In China, the total (+ shipping) will only cost A$60. The lens are of the same type/features.

    Bit by bit, we are trying to hold onto our money. I had wanted to get a big screen TV + an additional PC for Media Centre. But she holds me back. I think it’s good since I’m working (doing offence), and she’s frugal (defense).

    We make good teamwork! :)

  133. I’m 22 and just starting grad school with a $30k/year stipend. In student loans, I have $5500 at 6.8% and ~$9k at 4.875%… once I get the paperwork straight to get them back into deferral, I will probably just work on the smaller one with the lower balance if there’s anything left after credit-card debt, fully funding a Roth IRA, and rebuilding my emergency cushion. At the beginning of senior year, I had about $5k in savings, but between reduced financial aid (due to parents’ income increasing), slightly higher living expenses, fewer hours available at my job, over $1000 in application costs, moving to a new state, and unexpected car repairs, I’ve accumulated $3500 in credit-card debt. I did, however, reserve enough to float my rent and other expenses for the summer — if I wiped out savings and checking, I’d have around $1500 on the cards. (No debt on the car, but its value is negligible.)

    Once my stipend kicks in (or even the rest of my summer earnings), I should be able to knock out the cc debt in a month or two, so intellectually I’m not too worried about it. However, I’ve always paid my cards in full, so emotionally it’s driving me a little crazy. I thought about taking out a short-term personal loan, but the closing costs (or whatever they’re called) would have been a significant chunk of the finance charges I’ve paid over 3-4 months, plus my life was pretty scattered for a few months and I didn’t know how much I’d end up needing.

    I am a little disappointed that I worked part-time through college and hoarded any extra financial aid only to end up with debt instead of a cushion at this point, but that will improve soon (partly because I cast a wide, expensive net with grad-school apps).

    Even though I accrued some interest by taking more loans than I needed, I felt that I had to be prepared since there wasn’t anyone I could borrow money from in an emergency. In particular, I was concerned about medical expenses and the need to bail my mother out of debt. Both of these things happened — before the mentioned $5k savings milestone, actually — so my concerns were not unfounded. However, if I hadn’t ‘loaned’ her money, she would have just declared bankruptcy a few months earlier and I would have ~3k less in debt.

    I guess this is the issue I feel weirdest about, because it isn’t going away — at some point she will have no means of support (no retirement plan/savings, not-so-great health), and I won’t let her become homeless, etc. But I also can’t make her be responsible…

  134. I’m 26, and my girlfriend is 28.

    I just graduated from law school with $155,000 in school loan debt. She’s in medical school with some $400,000 in total school loan debt (med and undergrad).

    I like to joke that if we won a million dollars in the lottery we’d pay off our loans and buy a candy bar.

    I think for not being foolish (and not counting mortgages)… I win.

  135. I’m 35 and married (husband is 36). I make a little over 100k/yr and my husband stays home full time with our kid. I own my own business and have a regular 9-5 professional job (so I work 2 jobs total).

    I graduated from grad school with 30k in debt. When I was 26 years old and fresh out of grad school I made some smart investments (ie I bought a house) and made $150k off the sale of it. I then paid off my student loan debt (never had credit card debt) and reinvested the rest of the money. I used that reinvested money to pay off our current mortgage in full last December. We have zero debt, and that includes owning 2 cars, a motorcycle, and our house. We never carry a balance on our credit card but you can believe I use it as a free loan every month and put the $ I into an ING account.

    I have always contributed to my 401k, since I was 26 years old. I now have over $89,000 in it. My best piece of advice is to start that 401k right after school (even if you start w/ $200/month, which is what I did!) whether you think you can afford it or not. This is KEY. It’s not fun but do it.

  136. BTW-anyone who says that you have to go to an Ivy league college to be successful is full of crap and needs to read up a little more about who the millionaires in this country actually ARE and where most of them actually received their educations. Don’t believe this utter BS. The biggest predictor as to being a millionaire is *owning your own business* not going to an Ivy league college.

  137. Little different story…

    I dropped out of college (relative paid tuition) because all the IT tech support jobs kept getting in college would close shop and move to India. Joined the army and got out, had no where to go so i slept in my car and showered at the university gym (apparently I’m a gym member for life paying tuition for years). Got a low paying sales jobs, rented a couch for $100/mo, got a second sales job and rented a room for $350/mo.

    While doing business-to-business sales I walked in a real estate office and sold them a bunch of junk. They were so impressed they hired me, paying me hourly while i went to RE school. Did loans for them too in their mortgage office. Figured out how important credit was and slowly paid off some of the smaller debts, and got CD loans to build my score. After two years I could used RE license and high credit score to purchase rehab properties. First house my grandmother gave me the money for 15k. I refinanced a year later for 50k and paid her back. Bought another house few months later for 20 and sold for 35. Now i’m buying a house for 18k that’s worth 70k+, but i’ll probably flip it for 50k.

    I don’t even have a steady job and at this rate I’ll be a millionaire before i’m 35. My fiancee is much younger than me and we’ve already started working on her credit, she’ll be a millionaire before she’s 25.

    Only debt I have is my mortgage.

  138. [...] For more on this, check out the 130+ unbelievable stories about debt from iwillteachyoutoberich readers here. [...]

  139. Hi Ramit,

    Great site! This is a very interesting post. I have enjoyed reading the responses people have given; it’s an interesting psychological study. Sometimes, I want to yell out “Duhh”, and other times I feel guilty because I’ve fallen into similar traps. It’s interesting how my perception of debt has evolved at different stages of my life, and I’ve come full circle to where I abhor debt – it sucks the life out of you, closes options, and robs your peace of mind. To all those who have said that they are fine with their debt, I would suggest you reconsider, and work to get out of debt as quickly as possible. Most likely, at some point, you will wish you didn’t have the anchor tied to your ankle.

    Here’s my story. I’m 33 years old, divorced, with a graduate degree, and ~$30K in debt, which thankfully is much less than some people who have replied to your post. The interesting thing about my story is that I had no debt coming out of undergrad, and it’s not because I had scholarships or parents to help pay my way. I worked part time the whole way through undergrad and lived very frugally. It had been ingrained in my head growing up not to get into debt, and I set a goal when I started undergrad to graduate without debt. I achieved that goal. Then came grad school…

    In grad school, I still lived frugally, and with a stipend, I didn’t have to take out any loans to make ends meet. However, about this time I started rethinking my attitudes toward debt. Given that I had been working for around $8 per hour as an undergraduate, and now with a degree, I could easily get a job paying 3x – 4x that amount, it occurred to me that taking on debt wasn’t such a bad thing in order to enjoy life a little more, rather than work all the time, especially when I expected to get another multiple increase in pay with a graduate degree. So I relaxed my stance on debt, and took on $15K of student loans, which I justified as being smart since it was 0% interest for the life of the loan. I put the money in the bank to earn interest and thought I was smart to be making money off the loan. My, how things change…

    Halfway through grad school, I got married. Turns out it was a bad decision and by the time I was ready to graduate, I was also going through a divorce. Bad timing would be an understatement. Although I had my degree in hand, I also found myself without a job, and no desire to continue in my field of study. I didn’t know what I wanted to do, and quite frankly didn’t want to do anything, because I was depressed about the divorce. And of course, as you guessed it, I was the one who got saddled with the student loan. Since I didn’t have a job, I ended up spending all the loan money that I had been collecting interest on, and had to resort to a credit card to make ends meet. My parents also lent me some money, and add on the child support payments, the total debt ballooned to close to $30K before I was able to pull myself out of my funk, and find a job to get myself back together again. I’m now working to get back in the black, and thank goodness all my loans are 0% interest (I was able to put all my credit card debt in one account using a free automatic transfer with 0% interest the first year). So, while I’m no longer being killed by interest payments, I still don’t like the fact that I’m paying over $1K a month paying off my debts. I could do some very interesting things with that money, but instead I will have to wait. I now understand why my dad drummed into my head while I was growing up to stay out of debt. Sometimes, we have to learn the hard way, rather than listening to those who have already traveled the path.

    Take my advice, work a part time job to get through school if you have to, forget about the ski trips, forget about a nice wardrobe, just live simply during school and focus on studying and working hard. You’ll be much happier with no debt hanging over your head, and you’ll be in a great position to start life in the real world. You never know what can happen. Things can be going great, but within 2 or 3 years totally turn for the worst. You don’t want to be further hampered by debt if that ever happens. Debt will make a bad situation unbearable. Don’t fall victim to the lies people will tell you. Anyone recommending a large debt load, especially for undergraduate is only looking out for their own interests, at your expense. And talk about law school! The one post which said the cumulative debt of his graduating class was close to $40M, blew me away. Tell me the university presidents and other university administrators don’t have a conflict of interest! It’s a lie. Take the government loans only if absolutely necessary, but avoid the private loans at all costs. They’re not worth it.

  140. Now I see why 70% of Americans are broke. 100+ comments on debts. Mainly school debt.

    My advice as soon as you get out of school, pay down those loans regardless of how low the interest rate is.

    And also do not get financial advice from broke people.

  141. I am 21, one year from graduating with a master in applied economics and have no debt. Actually I have 15K euro saved, but reluctant to put it in the market at the moment (also with the possible outcome of buying a cheap piece of real estate soon).

    I am fortunate the system (I live in Europe) and my parents pay for education and living costs, respectively. However, a car, a student room and vacations are not standard living costs. I tackle that by not owning one, tutoring for my student room (and saving 100% of what’s left) and being a ski monitor instead of paying for the ski trips.

    Sometimes I do think I work and plan too hard, but that’s just me. I am eager to enter the labor market after graduation. I will either go into management consultancy (I am doing an internship at M/B/B) or join a start-up. Life can be a tough game but I enjoy playing it!

  142. My story is alittle new and i dont know if anything i put online will help but here i go. Okay i am a single mother of two great kids. There dad was just killed in iraq this past month. I got alot of debt that is stopping me from moving outta his parents house but this week Children and Youth were at my house because they found i am am living with someone who drinks alot and who beats his son when he is drunk and he is drunk everyday but i will say he has never put his hands on my kids ori would kill him but children and youth still want me out of here for safety of kids. So they are giving me 90 days to move out or they will be taken my kids but here is the thing. I owe $2500 in pay day loans from my kids dad getting them in my name also i got a house ready to move into but i need $2500 down for that house so total i need $5000 and am out of ideas on how to get this money. I went to family they said no and i am going to die if they take my kids from me. I got to bad of credit to get a loan from banks. Any Ideas how i can get $5000 as fast as possilbe?

  143. I have some debt, but I’m working a plan to be rid of it. Dave ramseys plan… it works… its not easy.. .it’s hard work, but over time it works.

  144. [...] Used irresponsibly, a credit card can ruin your credit score and leave you with a high-rate compounding debt. People who cannot or do not pay their statements can face late fees and over a 20% APR (this is about a 22% APY; see my interest rate article on how to convert APY and APR). It’s not hard to fall into bad debt—just read some of the comments (smart) young people wrote to this article. [...]

  145. I dropped out of college after one year without any debt. I have since been accepted to 3 major photography schools (sometimes without my knowing) but have not been able to attend because I just can’t get a private (read: non-government) loan for any school. My parents don’t make enough to co-sign, and I have very little credit history. Right now I have ~$300 in credit card debt @ roughly 20% interest (which, in my opinion, is almost criminal, and I don’t even have the massive amounts that many/most people have), and I owe about another $2,000 towards a computer I purchased for my photography work, which is at no interest (borrowed from relative). My spending habits are pretty much awful, as most of it goes towards food or random odds and ends, and while I make enough to pay down this computer in about 3-4 months if I’m smart, the fact is I’m just forgetful and don’t remember to write out the check every month, so it goes for 3-4 months without making the payment, and then I remember it and have to write one big check and take a big hit.

    Not sure if this is the best place to ask, but anybody know a good program for keeping track of spending/bills/etc. for Mac? I know what I need to do to get out of the debts I’ve got (obviously, since I’m killing off the very last of my credit card today), but it’s just the organization that I lack. Since a 3/4 of my work time is spent in front of the computer, having something that pops up and says “write a check out for x right now would be very helpful.

  146. [...] I’ve thought about my student loans (thanks to auto-pay), but I was reminded of them after reading all 141 comments left when Ramit Sethi asked his readers to tell him about their debt. The stories were just [...]

  147. Age: 24

    Credit Card debt: $0
    Student Loans: I have no student loans as I was on a full ride at a public university for graphic design.
    Miscellanious Debt: $1200 to my parents for my car. Interest free loan that I pay $300/month to them.

    JUST yesterday I sent off $4000 in payments to my three credit cards, paying off all of them. I had been wallowing in debt from them since I was 19, mostly because I had used them to buy things I didn’t need (two computers, a couch, video game stuff) and also because I used them to buy things when I could have paid cash (fast food, school books, etc).

    I just paid the minimums on these cards throughout college and also while I had my first job out of college. In fact, once I got my first job, I got into even more debt because I felt like I was rich and could buy nice things. I couldn’t, and I bought them on credit anyway (which was stupid). I was making $32,000 a year before taxes and insurance and stuff, and I was buying so much crap.

    Then about a year ago I met my boyfriend who has taught me how to save. I moved in with him in June and we are on a tight budget.

    We cook all of our meals, spend $400/month on food (costs a bit more because we buy healthy food and fresh produce), don’t really go out much, and don’t buy many extraneous things.

    I also got a new job that pays $50,000/year, though I have to take out about 40% of that in self-employment taxes (I am a contractor). However, I keep this money in an interest-bearing savings account and also save more than I need to. (I need to save about $800/month and I manage to save about $1200).

    My boyfriend helped me set up a payment plan for my credit cards that would minimize my interest and get them paid off in a year. I was paying about $500/month to them, but I got to the point where I had about $6000 in my savings, and I decided that I would save more money in the long run to just pay off the $4000 I had in CC debt and get it out of my hair, so that’s what I did. My credit cards had terrible interest rates (18%, 21%, 15%) so it was time for them to go. Now I’m saving $500 a month from them and I don’t have to worry about them anymore. I feel great.

    I will never have another credit card again, and now I can save even more money each month and start earning even more interest off of what I have saved. It’s exciting.

  148. Hello. I am an 18 year old, hoping to go to universtiy next year, and I am terrified of going into debt. Which is why I’m saving up so I can pay off school fees at the start of term, so I get a 20% discount. I am interested in getting a credit card; not to buy things really, but only for things that require one (like over the phone or online.) But I have a plan so I never have to pay interest – immediately pay it off. Not purchase anything without full knowlegde that I have the availible funds.

  149. My debt started with CD mail order accounts before I graduated high school and even though I managed to avoid the credit card pit with only $1000 on two cards it was the College “scam” that has my head under water. I attended a private college the first year out of high school at $7000 a term. I came off the streets. All poverty got me was student loans.

    Disillusionment and misdirection, with a giant whole where mentorship should have been, left me twisting in the wind for 7 years and 5 colleges with 3 different majors. Before I could finish any of the programs I began I ran out of money and had to drop out with a series of reconsolidations the only positive on the horizon. After pooling the 7 years into a pile I’ll spend the next 20 years paying over $80K for nothing; not even a two year degree.

    The choices were mine but the knowledge needed to make wise choices is not an award given in a little box that comes with a high school diploma.

  150. I have $23,000 in credit card debt that my husband doesn’t know about. I don’t even know what I bought-that is the crazy part. I just want someone to pay it off so I can start over and finally be responsible. It makes me sick when I think about it. I just want to start over.

  151. I am 18 years old and so far owe about 4000$ in personal bank loans. I don’t owe any for mortgage or student loans. Although it isn’t that much I still wish I never got myself into this situation. Originally I got the $5000 loan to pay for my laptop and a trip that I would make payments on and expected to only use about 2500$ on but dwindled away another $1500 on useless items.. I now realize that I need to get it paid off as soon as I can. I am wanting to get a new car, but have made a deal with myself that I am not going to get into any further debt until I get this one paid off. I am trying to make 500 payments on it a month, sometimes more, and am hoping to have it paid in full by September. I have since gotten rid of my credit card, which I would use my loan to pay off, and stopped using money I don’t have to pay for things that I don’t need.

  152. My parents always claimed that their folks didn’t teach them how to manage money. And between my father’s ADD and my mother’s depression, neither of them ever seemed able to pull their socks up and take on the overwhelming task of getting a grip on their finances.
    It was difficult, but bearable in my childhood. But it became unbearable when my father got laid off from his job when I was in undergrad, and decided to pass up all the job offers in order to start his own company. He over-mortgaged the house (which needed increasingly expensive repairs as the years went by) and instead of downsizing to more affordable housing and cutting back, my mother resentfully seemed to spend MORE of her teachers salary on luxuries and refused to leave the home they could no longer afford “unless she was in a pine box”.
    At this point I became ill and no doctor could say what it was.
    I also aged out of my parents health insurance at 21, and my parents were too overwhelmed and underfunded to help. My most heartbreaking memory is of my father, standing in the doorway of my room, weeping as he thought I was asleep. I had developed pneumonia, and the house’s furnace was broken with no money to fix it There was no money to send me to a doctor, and he had just placed the last blanket in the house over me so I could stay warm.
    I am now 37, and am in the final rounds of treatment for the illness that started so long ago. It turned out to be an odd combination of environmental and mercury poisoning that would take a lawyer and a long fight to get my insurer to cover. I have spent all my savings on medical treatments to regain my health.
    I am married to a wonderful man who is financially stable…and I am slowly learning how to manage money carefully and well as I finish my masters in Public Health. I am determined to spend my life making a good salary and advocating for universal health care so no one else has to lose years of savings and work to illness like I did.
    My parents are 65, “upside down” in that house, and still working. I got them both diagnosed and helped for their depression and ADD over the years, and they are improving….but
    nothing will ever replace the years of lost savings for either of us.
    My parent’s lack of money smarts has cost two generations financial security. I hope my story will show the people on this site two important things:
    #1- It’s not just about you. It’s about your kids and grandkids too.
    #2- You can’t get wealth without good health. The stability and wealth of our nation’s citizens depends on access to health care.

  153. [...] what will happen when her husbands student loan debts become due.  Similarly, a lot of people who commented at iwillteachyoutoberich.com got into debt because of their quest to get an education.  This, of [...]

  154. Im 22 years old. 23 in September.

    I graduated high school with a small scholarship for a local college. I went there 2 years and incurred 10,000 in debt.

    I decided to pursue an arts degree in graphic design in Philadelphia, an hour away. I wanted to get away from home just like everyone else was doing.

    Now its my biggest mistake.

    Im just about $100,000 in debt from a school that assured us all that we would easily be able to pay that off. Im making 11 an hour doing graphic design in my home town. I cant afford my payments and 2 of my loan companies wont allow consolidation anymore.

    Im going to have to go through a bank to try to get them to consolidate the loans and work out some sort of deal. The total paid will definitely be over 100k before i am out of debt. Why did a school allow me to get so much money in loans without knowing I could pay it off? These places do not tell you much. The loan company was given to me by my school, I trusted them. Now I’ll have about $600 a month to pay for most of my life. It hurts.

  155. I’m a 33 yr. old, single mother of 2 teenage daughters. I have $24,00 in school loans, $19,000 vehicle loan, and about $8000 in credit card debt. My income is only $35,000/ yr and the debt is overwhelming. I have always used a budget….but somehow that isn’t good enough.

  156. I turned 31 in May. Once I hit 30, it really changed my mindset as far as my finances go. I had a rough start financially. I had to completely pay for my entire college education and living expenses since the age of 17. I’ve always worked full time all through school. Living off of a meager salary and commuting to college was very overwhelming financially but I managed. By the time I finished up my bachelors degree, I had $47000 in student loans and $25000 in credit card debt. Fortunately, I am very diligent about paying my credit card debt on time. I’ve never had a late payment. I currently have two credit cards with 9% APR and a balance of $20000. I make about $45000 a year, contribute 14% to my 401K, $50 a month automatically in a ROTH, and $100 a month in a savings account. In a year and a half, I’ve built up almost $6000 in my 401k, and over $1000 in my savings and ROTH while trying to slowly eliminate my debt. My debt won’t go away overnight and I recognize the importance of saving while I try to pay it down. I’m optimistic that I can make very strong financial strides in the next 2 years so I can focus on my next goal: saving for a condo. I know that slowly I will get my credit card debt eliminated. It sucks but I feel lucky that at least I have a good interest rate and a job that I enjoy. Good luck to everyone. :)

  157. Wow. I guess I’m not alone. I’m 28, and I have $60,000 of student loan debt for both bachelor’s (journalism) and master’s degrees. Add to that $7,000 in credit card debt and $12,000 for a car loan. I was so desperate to pay off my loans that I enlisted for a five year term in the military as a broadcast journalist. I paid off my credit card debt with part of my $12,000 bonus, and now I’m waiting for my loan repayment benefit to kick in (the army pays back up to $65,000 of loan debt – one third of it after each year of service). I’ve only been in for ten months now, so I haven’t seen the first payment yet. Right now I’m just trying to keep up with the accruing interest on my student loans, which totals over $200 a month. Joining the military was a drastic move, but I was serious about getting rid of my debt. I hope that in four years all my debt will be gone, I’ll have money saved, and I’ll hopefully have enough job experience to get a decent paying job in broadcasting as a civilian.

  158. First off, i would like to say that is a fantastic blog where people can tell their stories. I am 21 living in Canada. I am currently a student enrolled in University. I have no debt and have money in savings. What i can tell people is don’t live beyond your means and try to save as much as you can, if you can even if it is a penny. Living in Canada helps because health care is covered. Anything can happen in life, therefore, you have to expect the unexpected. People with student loans, have those student loans because they want to better their education, in hopes for a better life. Student loans and Mortgages are debt for the better(but still debt) People who have credit card debt should pay it off as soon as possible. I can only read what people are going through. I can only suggest that live within your means and try to pay off your debt as soon as possible. Some people are fortunate than others and i can only wish the best to people that have debt. It is not the end of the world if you have debt, even though you might think so. Just pull through and stay positive and please if you are in debt , don’t spend money on things you can’t afford. It will only make things worse for you and your family.

  159. Hello my gross list is as follows:

    Student loans..around 32K..
    CCdebt 5100,4100,7800
    Personal Loan 20K
    car 1-5800
    car2-24K
    Savings 17K
    ed savings 1K
    Annual income…95K
    We are on a serious get debt free route…we moved from our beautiful home into a shack of an apartment with our two children to get out of debt and provide for them better. We will buy a new home as soon as this is all cleared up…1 year goal for all debt except student loans.

  160. I’m in the Marines, and make $1500 a month. My only bills are my nephew’s school tuition at $250 a month (my sister and I share the cost), Internet at $50, cell phone at $60, and credit card debt (3000)at $200. I save 20% of my monthly income in an IRA. I plan to extend my tour in Iraq to a year so I can pay off my debt, buy a used car cash down, fund a trip to Europe, and still have enough left over to invest. Before I get out, I’ll do doing another tour so I can save money to study abroad when I get out to go to college. I have a free ride to college all the way to master’s. I already have my associate’s degree. I have a partial scholarship for four years that pays for 75% of tuition and fees. With a part-time job, I’ll be good to go financially. I can get two BAs. Then with the new GI bill, I can get my master’s.

  161. The purpose of your debt and how you manage it determine the outcome. I am 25 years old and over one million dollars in debt. However, I don’t let it stress me out or bring negative energy into my life. I am young, successful and determined to live the lifestyle I have envisioned for myself by the age of 30. I am using leverage and maximizing the use of the great credit I have earned through consistent payments on mortgages, auto loans and credit cards. I have been blogging for the past two months on some of the current things I am involved in. Please check it out and leave your comments at: http://www.amillionindebt.blogspot.com/

  162. My question isn’t about my debt, but potentially my future debt when I get married. My fiance has 50,000 in loans almost all of his pay check is gone in bills. His situation is complicated: he got a 30,000 dollar student loan. He used 10,000 for school expenses then his mom asked for 20,000 dollars that was left so he wired it to her. She sad she was going to use that money to buy a new car. He was going to use that money for a used vehicle. He still needed a vehicle so he ended up taking out more money to buy a vehicle. He’s family has bad finacial practises it seems. I am scared to get into a huge finical debt. I have asked him to try to get the money back from his mom, but since then his parents have gone through a divorce. What should be done about this situation? Should his mom be paying some money back? Should his dad who now has the car sell it to put towards the payment? Is this something that could ruin our marriage down the road? I need some help!

  163. [...] Originally posted here: Tell me a story about your debt « I Will Teach You To Be Rich [...]

  164. Me and my husband are very much in debt…and no signs of getting out soon. He is the only one working as we have 3 kids and one that has epilepsy and needs tons of time and attention. He brings home roughly 4k a month..we have a mortgage, 2 cars and all of the normal bills people generally have. Then we have our credit card debt. One card is maxed out at 9k….the other is maxed at 7k and then we transferred some debt into a loan that is at 20 k …..we are barely keeping our heads above water…is there anything you can tell us to do differently to help us learn to swim again.

  165. [...] This arti­cle and it’s com­ments are quite sad. [...]