There aren’t many personal finance stories without bumps and mine isn’t unique. I have made plenty of financial mistakes that have shaped my story. Though I would be further ahead in my financial journey, it sure gives me something to write about. And I can use this to teach those around me so they can make fresh mistakes, instead of the ones I made.

Some mistakes I made were “typical” of a young person, while others were special! 1) Amassing credit card debt, 2) taking unnecessary loans, and 3) buying a new car.

Credit Card Debt

Who hasn’t made this financial mistake? Did you get a credit card offer in the mail the second you became eligible? I got the offer pretty much as soon as I turned 18. I was so excited! Felt like I was getting a pass into adulthood. I was never taught how to use them responsibly so I used it with wanton abandon. Basically, like someone with no sense. There was no rhyme or reason to my using it. Instead, I used my entire $4,300 limit though I was making nowhere near that amount.

I lived like I had money: buying shoes, clothes, and going out to eat with my friends. Charge, charge, charge to the card. I honestly wasn’t even concerned about it because I didn’t understand how it would affect my financial future.

The one good thing I did was that I never went a month without at least making the minimum payment. So my credit history has no missed payments tarnishing it.

Unnecessary School Loans

As I mentioned in my post on college savings, I was set up pretty well to come out of school with very little debt. When I first started university, it cost about $5,000/semester for a full-time student. I had a scholarship for $5,000/semester as long as I kept my grades up. Between that scholarship and the money my mom had saved up for me, I was covered for two years of school. Afterward, I maybe needed $1,000 a semester, which would amount to about $4,000. However, at minimum, I took out $13,500 in school loans. I don’t have any of my bills so I used CreditKarma to piece my student loan history together.

This happened because I heard from a friend at the time about refund checks. You get a refund check when scholarships and loans overpay the amount you owe the school. So after the bursar takes their cut, they provide you a check for the rest. It felt like a dream come true at the time.

The smart thing to have done is to either decrease the amount borrowed or put the extra in a high-yield saving account so I could make a lump sum payment once it came due. I did the COMPLETE opposite and spent it. I even bought a boy a car. A car!

I also worked per diem while I was in school but didn’t do anything productive with that money either.

Buying a New Car

First, let me preface this by saying, I had a few hoopties prior to my buying a car. However, I honestly didn’t know how to maintain them. Besides oil changes, I did not do any routine maintenance. As a result, I would just fix it when something broke. This made having a used car SUPER unappealing. Besides, in college, when my eyes landed on a gray Mazda 3 and I just KNEW that had to be my car one day. So soon after I landed my first nursing job, I headed to the dealership.

Now looking back, I probably looked like fresh bait when I walked into that dealership. One good thing I did was bring my cousin, who was a more staunch negotiator than I was, and she helped me get to a monthly cost I was comfortable with. Anyway, I was so happy with my $20K+ purchase!

Until I wasn’t. I don’t remember the reason but I eventually traded in my dream Mazda for a new Hyundai Elantra. This means a new loan, of course.

All the while, I still have credit card debt and student loans.

How These Mistakes Made Me Feel

I was completely unfazed and unbothered by my debt until I got married.

When I got married, I had my school loans, a car note, and credit card debt. This was discussed while we were dating so my debt wasn’t a secret. However, once we were married, I became very self-conscious about my debt. I was embarrassed to have debt when my husband was completely debt-free. It made me feel like I was a financial anchor. I was also a little envious that he could actually use the money he earned while I had to hand mine over to people I owed.

He offered to help me pay down my debt, which was extremely supportive of him, but I still felt like a loser.

Today, when I see things online about how much one should have saved by the time they’re thirty, I feel like I’m behind.

Shoulda-Coulda-Woulda’s

There are things I wish I could have done differently.

• Realizing that I shouldn’t spend money that I don’t have. That “spending below your means lesson” missed me for a hot minute. This also means not spending money just because I was with friends that were spending money.
• Surrounding myself with people who could better me financially. At the time, most of the people I was hanging out with had similar financial mindsets and habits as I did. As a result, not only did my environment fail to encourage me to form better habits, it could at times discourage me from doing so.
• Obtaining financial literacy at a younger age. If I looked into personal finance a decade earlier, I would be a decade further into my money journey.

All that being said, I know it could have been worse. I take these as lessons learned and a story to share. Debt is not supposed to be comfortable and it isn’t cool. You don’t need to be overwhelmed by it the situation merits it. However, you don’t want to be so comfortable that you take on unnecessary debt.

How I Rectified These Financial Mistakes

The first step to changing your situation, no matter what it is, is changing your environment. When I got married, I went from a family who was more or less comfortable with debt to one that was anti-debt.

Changing your environment doesn’t require you get married to your opposite. It can be done by reading books or listening to podcasts/seminars that increase your knowledge on a subject you care to know more about. You can also join groups online or in-person with people of similar goals.

Next, balance transfers. They helped me to shift my high-interest credit card debt to lower interest credit card debt. This saved me money is the debt repayment process.

Thirdly, I also refinanced my auto loan and school loan for a lower interest rate. I would also pay more than the amount due every month in order to pay them down faster.

Lessons learned

It took me years to undo the habits that led me to incur all that unnecessary debt. However, it taught me quite a few things.

1. Living below one’s means is not just a saying and it’s not to rain on your parade. It is a way of life so that you don’t take on unnecessary burdens.
2. People who discourage you from accomplishing your goals are not your friends. Your friends encourage the changes you make to better yourself and want the best for you.
3. Save money for the things you want, rather than incur debt in order to obtain them.
4. Educate yourself. The internet has some questionable advice in some places but you can find credible sources for information everywhere if you know how to look. Start with sources you already trust and grow your recommendation list from there. One podcast led me to my listening to other podcasts and reading books on personal finance.

Your turn. What financial mistakes have you made? How have you overcome them? If you’re dealing with some of those mistakes now, how are you managing them? Share in the comments below.

If you haven’t checked out my money journey, click here to learn more.