Welcome to the Wednesday Debt Discussion at Six Figures Under. I started these Debt Discussions based on my philosophy that when burdens are shared, some heartache is spared. As usual, all are welcome, whether you are debt-free or weighed down heavy with debt, though I’m specifically addressing the latter.
They say that hindsight is 20/20. Looking back at how you got yourself into debt, would you do anything differently? Are there habits you wish you had avoided? Would you have patiently waited and saved instead of spending on credit?
Since this is a positive and encouraging place to discuss debt, I won’t say “regrets,” but I do want to talk about things we would do differently if we knew then what we know now. Discussing debt prevention can not only help us from making the same mistakes again, but it can help others to not make similar mistakes in the first place.
My husband and I both had frugal upbringings that carried over to our marriage. We both graduated debt-free with undergraduate degrees. We had a low-maintenance lifestyle and were money-conscious.
After working a couple years at a “real” post-college job, my husband felt like he needed to go back to school for more education. We knew some debt would be necessary, but it turned out being much more than we figured.
(You can get more details in the longer version of our debt story.)
During our law school years, we lived frugally. Still, there are some areas where we could have done better.
Things I would change
We tracked our spending, but we didn’t really budget. My excuse was that since we didn’t have a real income, we didn’t need a real budget. To our credit, I did have a goal of $200 per month on food, which we stuck to pretty faithfully. In everything else, I just tried to spend as little as possible.
Since we have been living on even less now, I can really see the benefit of having a budget. The challenge of keeping spending down is empowering. Instead, without a budget I felt powerless to make anything happen.
I was involved in our finances in more of a passive role. I tracked our spending and that’s about it. If I had been actively budgeting, I would have had a better idea of how much we should take out in student loans.
Take out less
We always took out the maximum that we qualified for. Having a family and a house and not knowing what the future held, we felt safer having money on hand.
Near the end of school, we still took out the full amount even though according to our bank account we probably didn’t need it. The job market was looking bleaker than it had in years past. On top of that, we didn’t know when our house would sell. The thought of owning a house while we were trying to build a business across the country was a scary prospect.
We were very blessed to sell our house within a month. My husband did get a job, and though he makes commission, he receives a draw which prevents irregularity in his income. Knowing that everything had a happy ending, it is easy to say that we would have done things differently. However, since we wouldn’t be able to see the future, it would be hard to make the decision to take out less.
Seeing what we’ve been able to accomplish as we’ve set goals and given them our all, I feel like we could have had more faith and worked harder so we wouldn’t have had to take out so much.
It’s Your Turn
- If you could go back it time, what would you do differently to prevent or lessen your current debt burden?
- What hindsight advice would you give to someone else who is now in the position you were?