First Person: 18 and $40,000 in Debt

by on December 24th, 2010
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I have recently come to the realization that throughout my life l was never taught about credit. Not from my parents, high school, college, or even in business school. Everything that I have learned has been self-taught and recent. I believe that is one of the reasons why I have a dreadful credit score and mounting debt.

When I turned 18 I had already been working for two years at the same place and made a good salary so it was easy to obtain credit. I signed up for every credit card offer that came in the mail and financed two cars, one of which was $20,000. In just a few months that followed my debt had reached $40,000. I was making all of my payments easy enough but I had absolutely no room for error. One missed paycheck would have sent me into a financial spiral down the proverbial toilet. And it did a couple of years later.

After a buyout of the company I was working for in 1999, everyone was let go. It was just one week before I landed another job but that damage was already done. I missed one bill payment, then two, and then the avalanche began. I couldn’t keep up. I tried a strategic voluntary reposition on the cheaper of the two vehicles hoping that it would help, and it did but only briefly. It wasn’t enough to stay afloat.

In the months that followed everything that could go wrong did. My other car was repossessed. And the credit card companies were nagging me for their money and threatening to sue. I stopped paying almost everyone because I just didn’t know what to do. At this point I still didn’t even know what a credit score was.

I hired a lawyer at the ripe age of 20 and went bankrupt. During the bankruptcy I entered college and without even thinking about it signed up for student loans. I started on the same path again without ever knowing what I was getting into, with student loans this time in place of cars and credit cards.

I know if I had a class in high school that taught about credit I would be better off. I believe that it should be mandatory for students in high school to take a course in personal finance, covering credit and not just how to balance a checkbook. Better yet, start teaching about its importance in grade school. At very least, throw it into a freshman orientation class in college.

Now at age 32 I have about $45,000 in student loans and roughly $10,000 in other debt. I have been out of work since 2008 with no signs of improvement. It sounds bad and it is, but I can manage. I’m wiser now and know how to take care of my debts even with being unemployed. I have learned from reading, news, the credit crises, and life that my credit is precious. I wonder how things would have been different if only someone would have said something, anything. For the most part I know what to do now and I will try to teach my future children the same thing so they don’t follow in my oblivious footsteps.


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