Student Loans

Me and Scotty are writing a workbook about how to be a good steward of your money. One of the subjects that we are tackling is Student Loans. This has been a big struggle for me so I would to tell you the story of me and my debt. So expect some more blogs in the coming months about money. I hope that you can learn from some of my mistakes.

My Mistakes

I graduated college in 2012, and I joined the ballooning population of college students with student debt. The average student debt for 2012 was $29,000, then rose in 2013 to $33,000. I snuck out with a minimal $15,000. Not bad! I also had a job offer from a programming company earning $55,000 a year.

What’s all the fuss about debt being a bad thing, I thought. I will be able to pay off my debt in no time! I mean going from making $20,000 a year to $55,000 meant I was getting an extra $35,000 a year. I did pretty good in math class :). That’s enough to pay of all my student debt and a new car. Oh, that’s a good idea, I thought, a new car! I need to be able to get to work on time and be reliable, and my old car just wasn’t cutting it anymore. $15,000 later I was ready to enter adult life, with $30,000 in total debt.

Then something happened my first year out of college that I didn’t quite expect. I found out it’s easy to spend money when you have money. I was pretty poor by the time college ended and since you don’t have to start paying back your loans for 6 months, I decided I need to take care of a few things. I needed new shoes, new clothes, new computer upgrades – you get the idea. I bought a lot of stuff I wanted, not things I needed. My first year out of college I wasted a lot of money.

By the time my second year out of college rolled around I had a healthy habit of confusing what I need with what I want. And then I got engaged. That meant fancier dates, saving up for a honeymoon, extravagant presents, etc. I was living the high life. This whole time only paying the minimum payment on my loans $150 a month, half of a car payment. At this point I had only paid $2,000 off my student loans and $6,000 off my car. So much for that extra $35,000 a year…

A Change

Then I got married – year three of debt. This is where things began to change. Something interesting happened, my debt was no longer my debt it was our debt. It was not longer my secret that no one else knew about. When Kate asked, I had to tell her. This was strange for me. I even had to deal with the reality of her love for me though her willingness to take on my debt. In some ways I think Kate did something similar to Jesus, she is paying the penalty for my sin. It’s our debt now. Just to clarify I don’t think debt is sin but my attitude to it was sinful.

I quickly realized the effect of debt. I was worried about losing my job and what would happen to me and Kate if that occurred. How would I pay for rent and feed my family? I also realized being married is expensive, my rent payment went from $200 a month to $700. Pretty much everything became at least twice as expensive. What would I do if my computer broke? I didn’t have an extra $1,000 to blow on a computer. I realized I need the help of my wife.

We talked about my debt: how many loans I had, what was the interest value was, why I haven’t been able to pay it off yet. It was uncomfortable, and I had to be vulnerable. I was met with grace, love, and helpfulness. That changed everything. We left with a plan to become debt-free.

The biggest change I made was going cash-only. We made a budget and figured out how much we needed to live and every month. Kate withdraws that money and we pay for things in cash. We each got a $20 allowance each week and could only use our debit cards for buying gas or similar purchases. There were a lot of other things we did but this was the most impactful – it helped curb my impulse spending. Have we been perfect? No, but it’s a start.

By the end of our first year of marriage we had knocked off an additional $11,000 off my student loans and another $3,000 off my car loan as well as paying off Kate’s $4,000 car loan – a total of $18,000 off our debt! This left me with only $5,000 on my student loans.

Final Thoughts

Student loans are a big deal.

At 18 I made some bad choices with my money. For example one semester I accepted enough to pay my tuition and then a little extra to help pay for my computer, and enough to upgrade my phone. One semester I even took a little more loans out just so I could have a little extra fun at spring break. A couple hundred dollars extra every semester really adds up fast. I just wasnt thinking.

I didn’t understand debt and how it could psychologically affect you, how it could make you so paranoid and anxious. At 18 I didn’t think how it could affect my marriage. I am not a financial expert or a debt expert, and I know I will probably go into debt if I buy a house one day, but to the best of my ability I will try to stay out of debt.

My problem was not debt but that I was a lover of money and a materialist.

Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you; never will I forsake you.”

Hebrews 13:5 New International Version (NIV)



One thought on “Student Loans

  1. Carlell Howard says:

    That was really beautiful Tom. I realized I am a lot like you. I appreciate your helpful tips! Going cash-only must’ve been a big thing to adjust to! I’m working now on constantly checking my budget app, a great start to not indulging in things.

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