I remember one day in winter 2007 like it was yesterday. It was -20º F in the middle of Alaska, but I barely noticed as I walked home from the post office, right hand wrapped tightly around an envelope in my pocket. Inside it was a check from a private student loan provider made out to me for $25,000.
My mother had the best of intentions (bless her heart) and helped me apply for it—and another $25,000 one year later—but we’d never actually sat down to discuss how much I’d need. Rather, $25,000 sounded like a nice, even number to pay for school and my off-campus living expenses.
In my silly, 19-year-old brain, I thought “living expenses” meant, well, anything I wanted. I was alive, wasn’t I? Besides, I’d pay it back later when I got a smokin’ hot wildlife biologist job offer. (Still waiting on that one...) Since my school expenses were just $3,500 per semester and my rent and utilities were a mere $560 per month, there was about $11,000 left over that first year alone.
How’d I spend it? I’d like to say I invested it and used the proceeds to help pay off the debt later.
Alas, no… unless you count a $1,000 spinning wheel and drum carder (which combs raw wool fibers so it’s easier to spin) as an investment.
Really, it was just a way to feed my knitting addiction. I also hit up my local yarn shop, where I bought all manner of fine and fancy yarns. I didn’t have anything in mind I wanted to make (much less sell). I just liked to hoard the soft skeins and dream of rolling in a pile of them one day.
Next, because I lived in a cabin in the middle of Alaska with no running water, I had a convenient excuse to avoid something I hated: cooking. Instead, I spent my loan money on takeout for nearly every meal. BYO lunches? Um, how about KFC and Pizza Hut every single night.
And the pièce de résistance? One winter break, I went on a month-long visit to meet my then boyfriend’s family, spending thousands on a plane ticket—tickets anywhere out of Alaska aren’t cheap—plus care for my dog and more meals. The relationship didn’t even work out, and now I’m married to someone else.
Looking back at all this frivolous spending, I can’t help but wish for a do-over. I’m constantly reminded of my mistakes with each $390.83 student loan payment. These loans could be a drag on my finances—and my life—for years.
But, as they say, hindsight is 20/20, and I can make better choices today. I already made a lovely retired woman very happy when I sold my spinning wheel and drum carder to her last year for $1,000, and I’m getting ready to sell my yarn collection through eBay, too. I’m also learning to cook—and I even like it sometimes. (Hey, life skill!) This easily saves my husband and me $350 per month, which we funnel directly to our savings account instead.
Most importantly, I’ve learned my lesson when it comes to budgeting. If you don’t have a plan for how to spend your money, your expenses will expand to match your money, or even exceed it. In my case, this was a pretty expensive lesson. But, trust me—it’s not one I’ll need to learn twice.