When I get out of school I’ll be making 50k a year and all my debt will be paid off in 3 months… WRONG

Throughout University I lived a little bit past my means and managed to accrue a nice chunk of debt by the time I was finished; the same can also be said about the other writer for this blog (we met in University). We were both studying computer science and were both fairly intelligent. Our common interest besides our program was photography and we used to travel out of town to shoot photos of bands, buying camera equipment on credit.

We were both young, had no financial responsibility, and were both thinking, “As soon as we graduate, we’ll be making 50k a year. That’s like $1600 a paycheque! I’ll be able to pay off my debt in a few months.” Boy, could we ever be more wrong. . .

It’s been a few years since we graduated, but my personal debt had managed to climb to almost $25,000 just on credit cards and lines of credit. It quickly became very scary.

Once I was finished University, I got a job at $50,000 a year, just like I had planned. However, in the evenings I had a lot more free time, less homework, and more time to spend money. So I tried to pay off a little bit of debt, but other things such as rent, groceries, the fact that I wanted a car, more camera equipment quickly ate up all of my pay. My debt was going down a few hundred dollars at a time, and with the whole notion of “I just won’t spend any money for 3 months so I can pay off my debt” being the most ridiculous one ever. There were too many expenses that were fixed and I just had to pay.

My biggest regret was accruing all that debt in University. I worked part time and did contracts on the side so there was really no reason to be in debt at all except that I lived beyond my means with the false expectations that my 50k a year job would pay off all my debt, no problem.

Fast forward 2 years, both myself and my co-blogger are out of bad debt and now own homes and contribute to regular savings and retirements plans. It was a tough getting out of the hole by that much.

The moral of the story: a new job usually means more money, and with more money you develop more wants and more expensive tastes. At the end of the day, you most likely won’t be paying down your debt any faster.

No Credit Needed made a good post last week with some debt reduction guides.

fivecentnickel.com has a great post about minimizing debt while in university.

Canadian Personal Finance Blog has a post about student debt as well.

Tags: debt, expectations, goals, money, myths