It’s Okay to Be in Debt, Just Not Okay to Stay in Debt
It’s Okay to Be in Debt, Just Not Okay to Stay in Debt
APRIL 26, 2023 Financial Pilgrimage
Ever since college, I have always thought I was good with money. At least, that’s what I’d tell myself in my 20s. At the age of 25, I was completely debt-free! Yet, we accumulated nearly $200,000 in debt by age 30. Most purchases were normal today: a house, student loans, newer cars, a wedding, a condo at the lake. Oh wait, a lake house is not typical, but it happened. While getting into debt was not ideal, I don’t regret any of it, and thankfully we had the financial means to dig out. However, I know not everyone is as fortunate. Regardless, this is our story.
Going Nearly $200,000 in Debt
After graduating with a master’s degree at 25, I started life with a clean slate. I had a little bit of savings in the bank that I could scrape together over the years. My “college fund” was $6,000, and since I never had to use it, my parents gave it to me after graduating.
In addition, I had saved a few thousand dollars more over the years from my job, waiting tables and bartending in college. So at age 25, I had no debt and a decent amount of money to start my life.
If I could do it all over again, there are things I would do differently. Regardless, by my 30th birthday, we had accumulated nearly $200,000 in debt. How did this happen?
Our road to accumulating this debt is not all that uncommon. Many life events can take place soon after graduating from college.
First was the newer car “needed” since I had a better-paying job and could afford it. That, of course, came with a five-figure loan.
Next was planning for a wedding. This included purchasing an engagement ring and paying for our wedding. In total, this cost us somewhere between $20,000 and $25,000. We mostly paid with savings, but it still set us back financially.
Along the way, Mrs. FP returned to school to get her teaching certificate. But unfortunately, we stared at almost $50,000 in student loan debt once she graduated.
Then, of course, we needed to live somewhere. We purchased my grandparents’ old house shortly after my grandmother passed away. The house was purchased below market value though we still ended up with a $100,000 mortgage and a home that needed completely renovated. We are still spending money renovating this house ten years later.
And last but not least, we ended up buying a lake house with family. This also included buying a wave runner and chipping in to buy a boat. My parents paid for the down payment, and we’ve split the monthly payments with my two other brothers for nearly ten years.
Shortly after agreeing to buy the lake house, we found ourselves in a bank lobby taking out a home equity loan because two bathrooms were leaking into our basement.
More debt.
And yes, we went in on the lake house purchase already nearly $200,000 in debt. I’m a terrible personal finance blogger, I know.
Drowning in Debt
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