My Finances Weren’t Always This Good: Part 1

12 Oct

After my last post painted my financial life as practically perfect, I felt the need to elaborate just a bit on my history.  Yes, my finances may be smooth-sailing right now, but that wasn’t always the case…

I’ve been in debt three seperate times in my life:

  • Student Loan Debt to study abroad (2005): $5,500
  • Credit Card Debt (2006): $3,500
  • Car Loan Debt (2005-2008): $17,000

Unlike many personal finance bloggers, I started this blog after I became debt-free.  For this reason, I have to decided to tell you all about my debt history this week.  I learned a lot from being in debt – in fact, I think that debt itself showed me the way to financial peace.


I’ve mentioned before that I was lucky enough to have my parents pay for my college experience.  I realize this is a huge blessing and many people come out of college with tens of thousands of dollars in student loan debt (including Lloyd!).

My junior year of college, I was given the opportunity to study abroad in the beautiful country of Spain.  (Side note – if you ever get the chance to study abroad, do it!  It’s a life-changing experience that only presents itself during the college years.)

My parents had always agreed to pay for 4 years of college and no more.  Studying abroad didn’t fit into that category, so I took out a student loan for $5,500.  The loan covered room & board with a host family, round-trip flight, classes at the Spanish college, excursions, and spending money in Spain (including many, many nights out on the town that I can’t detail on my blog 😉 ).

Just over five-thousand dollars seemed like a great deal for everything I was getting – and it was!

Of course, I had no money to pay off the loan during my senior year of college so I waited until I had graduated to start paying towards the loan.

After college, I endured living with my parents for about a year to get my finances under control.  I remember feeling just sick to myself that I had five thousand dollars sitting out there that I owed to the federal government (you know that sick feeling that debt gives you?  That’s what I mean).  I hated having debt so much that some months I threw 75% of my income to my debt.  My biweekly paychecks were about $950 at the time and I always had a goal to put at least $700 of that to my loan.  Sometimes I met that goal, sometimes I didn’t.  I didn’t even care that I couldn’t buy a fancy new wardrobe for my new full-time career.  I had a debt to pay off and I was going to do it fast.

Living with your parents is the best thing you can do for your finances.  On the flip side, it can sometimes be disastrous to your relationship with your parents after you’ve been on your own at college for 4 years! 😉  Since I had no expenses whatsoever when I was living with them, I was able to pay off my student loan debt in about 6 months – from July through November of the same year I graduated.

This seemed like quite an accomplishment to me!  I think at this point, getting into debt again in the future didn’t really cross my mind.  I think I figured that student loan debt was it and I wouldn’t have to deal with anything like that anymore.  Wrong…

Very soon after I became debt-free for the first time, I turned around and took on the biggest debt I’ve ever had: a new car loan.

Stay tuned for Part 2!

12 Responses to “My Finances Weren’t Always This Good: Part 1”

  1. FB @ October 12, 2009 at 6:35 am #

    You really were lucky to have parents who were so generous!

    And Spain? I’m jealous.

  2. eemusings October 12, 2009 at 3:21 pm #

    Spain! I’m hella jealous too! 😛 And 5k is a steal for a semester abroad. Just sayin’ 🙂

    • Carrie October 13, 2009 at 11:34 am #

      Yeah it was a great deal!! But it was just a summer, not a semester. But still, it was a great deal.

  3. BDO October 12, 2009 at 4:40 pm #

    Ahh…the new car loan. Even though Cash for Clunkers was widely accepted and a success for bailing out Detroit, I hope we teach people that a late model used car can be “just as green” and save a lot more money/debt expense than a new car.

  4. Tracy October 12, 2009 at 9:59 pm #

    Your semester abroad in Spain sounds absolutely wonderful! That is something that I will never be able to do as I am married with children now, but hopefully one day we can at least travel there as a family.

  5. MPP October 13, 2009 at 10:51 am #

    Oooh I’m so interested in this “Carrie before Carrie on the Cheap” series. And I too had to pay for my own study abroad for a summer in Europe. It cost me many many months of saving, but it was so worth it! Can’t wait to hear Part 2!

  6. SS4BC October 13, 2009 at 5:59 pm #

    Great post. I also encourage EVERYONE to take a semester/summer abroad if they can while in college. It is one thing that I desperately regret doing. However, no one that I’ve ever met has said that this wish they hadn’t. Which leads me to believe that everyone who want to go, should.

    I’m eagerly anticipating part 2!

  7. SS4BC October 13, 2009 at 6:00 pm #

    regret *NOT* doing


  1. My Finances Weren’t Always This Good: Part 2 « Carrie…On The Cheap - October 13, 2009

    […] October 13, 2009 by Carrie This is the second of a “My Debt History” series this week.  If you missed Part 1, check it out here! […]

  2. My Finances Weren’t Always This Good: Part 3 « Carrie…On The Cheap - October 15, 2009

    […] a “My Debt History” series this week.  If you missed Part 1 or Part 2, check them out here  and […]

  3. My Finances Weren’t Always This Good: The Finale « Carrie…On The Cheap - October 19, 2009

    […] a “My Debt History” series this week.  If you missed Part 1, Part 2 or Part 3, check them out here, here, and […]

  4. More Fabulous Q&As! « - February 23, 2010

    […] I had credit card, car loan, and a small amount of student loan debt. In total, my debt was about $26,000. What motivated me? Hmmm…being "owned" by other people. Not living paycheck to paycheck. Not having a savings account. I hated my financial situation and wanted control of my money. I worked hard for my money and wanted to keep it. So, I stopped spendind money and got my butt in gear. You can see my debt payoff history starting here: […]

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