My Personal Finance Journey (my early 20s)

by Joseph · 2 comments

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Man walking up railroad tracks

Today I’m going to continue to talk about my personal finance journey, this time focusing on the financial mistakes I made in my early 20s. If you haven’t already read part 1 of my personal finance journey don’t forget to check it out.

Mistake Number 1: Student Loans

After high school I took some time off from going to school full-time. I took a few classes at a local community college, while maintaining a part-time job. I didn’t take school as seriously as I could have; of course that was no surprise considering how seriously I took high school (read: not seriously at all). All the while I was living at home with the parents enjoying a rent-free life and blowing a good chunk of my money on who-knows-what. I did manage to save a portion of it for college, so I did fairly well in that regard, but unfortunately not well enough.

I lived in this perpetual state of nothingness for about a year and a half and then decided I would dedicate some time to service. I spent just about two years doing service and then decided I’d better get on with my life… specifically my education. So I went back to school.

Here was my first financial mistake. I didn’t have nearly enough money saved up to pay for a full-time education as I hadn’t had a source of income the whole time I was doing service. So I took out my first student loan and started a habit of relying far too much on student loans.

Now don’t get me wrong. I couldn’t have completed school without any student loans, but that doesn’t mean that I needed to take out as many as I did. I spent way more money than I should have, figuring I could just live off of the money I made from work and use student loans to pay for tuition, books and supplies. I became dependent on those loans, and didn’t consider the fact that they would eventually come to an end and that I’d have to pay them off.

Mistake Number 2: Lafawnduh

Lafawnduh in the park with KipWhile I was going to school and working part-time I decided it’d be a good idea to go to the dealership to look at cars… for fun. I left six hours later with a new car (which I named after Kip’s girlfriend from the movie Napoleon Dynamite). A very expensive car, with a huge car payment. In fact by the time I left I had more than doubled my original car payment and left with a loan that was nearly $30,000 dollars. I consider this the worst financial mistake I’ve ever made.

In fact, my car payment was taking up around half of my monthly income. Talk about a bad situation. At the time I lived in my parents house (they had since moved away to Tennessee) with my brother and a couple of friends. Rent was cheap, so I could technically afford my car payment. What would happen though if I had to move out for some reason, say my parents wanted to sell their home?

My problem in my early 20s was that I just didn’t think things through. I simply expected the status quo and didn’t consider that life might throw a curve ball (or two) at me.

Here comes a curve: I get married!

Not long after I bought my car I started dating a good friend. We fell in love and decided to get married. (I kind of ruined the surprise in that header didn’t I?) I won’t bore you with all of the details, but needless to say we started out pretty poor. She (understandably) did not want to live in the “bachelor pad” with my brother and buddies, so we moved in with her sister until we could save up enough money to get our own place.

She couldn’t believe how much debt I had between my car and student loans, but for some reason decided to marry me anyway. I appreciated that. We worked hard at getting my debt paid off and with a lot of hard work, several years time and quite a bit of luck we managed to finally pay off my car and a decent chunk of my student loans. Of course in that time, we also took on a mortgage. That’s another story.

That’s it for today’s edition of My Personal Finance Journey.

Please let me know what issues you’ve encountered in your own life and what mistakes you’ve made and lessons you’ve learned in the comments below. I’d love to hear from you! :)

{ 2 comments… read them below or add one }

Andrea @SoOverDebt September 19, 2011 at 8:00 pm

Is it wrong that I totally wanted mistake #2 to be about dating a girl you met on the internet? Preferably one named Lafawnduh? I am crushed by the disappointment of realizing you were only talking about a car.


Joseph September 19, 2011 at 8:06 pm

Nothing wrong with that. I think that would have made my story just a little more interesting. Next time I’ll just have to lie to spice things up a bit! haha

Thanks for the comment Andrea :)


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