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Matt’s Debt Introduction

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Note: Matt has put together this introductory post in his quest to become the next blogger on BAD. Feel free to make comments or ask questions on what he’s written. More information about the new blogger position can be found here

Hi! My name is Matt and I’d like to start by telling the world why I want out of this debt-ridden lifestyle: I hate the financial prison it’s held me in since graduating from college in 2009. My reason for being out of debt is primarily for selfish reasons (until I have a wife and potential family); I would love the freedom of knowing I have more options than living a “9-5”, “5 day a week” lifestyle for 40+ years before retiring and only then realizing I would be too old to enjoy it. That being said, I enjoy what I do and love my employer, which at least makes my debt burden a little lighter.

I graduated from college, with a BS in mechanical engineering, into one of the worst job markets this economy has ever seen. Thankfully, I was able to find a position in the public sector (only 1/2 my graduating class could say they found a job in our field immediately upon graduation, and some still haven’t). Unfortunately, this is where most of my debt lies- from a higher education that may or may not have been worth the price of admission. I currently have ~87K in student loans, which are down from the ~110K I started with. I have since switched positions to the private sector (bringing home $3,200 a month), bought a (used) car, bought some furniture on a credit card (paid off) and took on a mortgage. I owe ~10.5K on the car and ~71.5K on the mortgage.

The burden I put on myself didn’t hit me until my first payment on the student loans came due and while I was doing what I could to pay off my debts as quickly as I could on my minimal government salary, I fought (for the better part of two years) with the realization that it all could have been avoided. I could have paid attention to the money I was “spending” and went to a state school. I could have not gone to school at all. I also spent the last 4 years on a financial roller coaster either paying off debt, quickly, with little regard of anything or anyone else and spending money as if a pending apocalypse were approaching (to an extent. I don’t use credit cards so I could only spend the cash I had in various accounts.) But now, knowing there’s 1,000’s of young adults in the same position as myself, I own my debt and I’m not afraid of telling anyone who’s willing to listen of my situation. I’ve always felt honesty is the best policy- I use this in my day job and I would use it here.

I currently live in a small metropolitan with low living costs with my wonderful girlfriend of 1.5 yrs (we met on OK Cupid) and our ‘children’- 2 of the most loving, wonderful rescue dogs in the world. In my spare time I love outdoor activities including surfing, mountain biking, longboarding, and golf and love playing my guitar (which I do everyday). Debt tracking and budgeting have also quickly become some of my favorite things to do. Watching those debt totals fall may be the closest to nirvana I’ll ever come.

I became inspired in September after reading BAD, Mr. Money Mustache, and Man vs. Debt to get rid of debt for good, come hell or high water. Since my epiphany, I’ve paid off 5K of debt, built an emergency fund of 5K and increased my net worth by 15K. I’m hoping that I can build even more steam with the help I’ll get here.


13 Comments

  • Reply Mary |

    I like your story. You also seem serious about debt reduction (a plus). I think you’d may a good blogger.

      • Reply Matt |

        Thanks Mary! I do have some previous experience blogging, but about subjects other than debt (urban exploring, mountain biking, etc).

  • Reply Katrina |

    Your story hits home with me. I also graduated as an ME with ~110k in debt mostly high interest. Unfortunately, I also married someone with the same background so it quickly doubled to over 200k in student loans. Its a lot more difficult to grasp that high amount of student loans because you sign for them when you are 17 or 18. I’m guessing your parents were like mine and didn’t really advise much when choosing schools and signing up for a lifetime of debt.

    I’m warning you now its a long battle. We’ve been in semi-aggressive payoff since 2008, down to 65k now. I’ve pretty much given up on snowballing them now though so I guess I won’t be very encouraging!

    It would be a nice contrast to have someone on here who didn’t gather their debt simply by running up credit cards. For the most part credit card debt is preventable and is a result of hundreds of poor decisions or spending during a rough time. Student loan debt is also preventable, but the results stem from one initial decision of school choice which you’re pretty much stuck with for 4 years after that. (I’ve found expensive private schools typically make your credits incredibly difficult to transfer. So yes, you are “stuck”.

    • Reply Matt |

      There’s no question it’s a long battle. I’ve already been at it for almost 5 years now. You’re right about my parents- They offered little to no guidance when I was trying to figure out what I want do with my life after high school. The little guidance I received were in the forms of such gems as “Follow your dreams, the money part will take care of itself…”, “Go to the school you want, don’t worry about cost…”. Which was also more or less the same guidance I received from high school officials. Given enough time, I could write a dissertation about how the youth aren’t being properly prepared to make the kind of choice, of this magnitude, that will ultimately effect the rest of their lives. But no excuses- my debt is my debt, and nobody else’s.

      That being said, I would like to say congratulations on the debt pay-off thus far. I long to be at 65k of debt and, hopefully, will be soon.

  • Reply OneFamily |

    Good for you for tackling your debt and paying down what you have so far. As a 50 year old, (and a parent with a soon to be college student) I come from an age where we didn’t take on those huge student loans. (I worked my way through college and got a job at a company that paid my tuition while I went to school part time and nights). I am curious as to the mindset that college students now have to rack up over $100,000 to get a degree. Do they take into account the salary they will be making and how long it will take to pay off?

    From your stated take home pay, I’m guessing you make in the neighborhood of $50k a year or so. Maybe it’s just the area of the country you live in or I’m just totally out of touch, but that seems low for a person with 4 years experience/degree in engineering? I realize different areas of the country have different salaries and cost of living, but I find it sad that no matter where you live, the education has to come at a price of $100,000 in debt and subsequent salaries that cannot support that debt. These student loan stories seem so common now.

    Best of luck to you!

    • Reply Matt |

      Thanks for the comments and you’re right- these types of situations are quickly becoming the norm.

      My parents also came from an age where they could work through school to pay it off-leaving them no debt when they graduated, however those days are long gone. The average 4 year state schools are now charging $9,000 a year to attend, and that’s just tuition (http://trends.collegeboard.org/college-pricing/figures-tables/average-published-undergraduate-charges-sector-2013-14).

      As far as mindset- it wasn’t even an option to NOT to go to college. Even my peers who had no business going to college were encouraged to. We had had whole classes taught to us about the benefit of attending higher education (with the cost of such never being brought up) if you were fit or not. If memory serves correctly, my graduating high school class of 350 had 4 kids go into the service and MAYBE 5 kids not declare to a college. It was beat into our heads that we HAD NO CHOICE but to attend university upon graduating.

      As far as my take home pay- I’m currently make 60K a year with 4.5 years of experience. May be a little low, but the average BSME only makes between 55K-89K (http://www.engineersalary.com/mechanical.asp). Hardly the 6 figures I was made to believe by college recruiting officials. But I’m lucky to live where I live. My 60K a year more than likely gets me a lot farther than the higher cost parts of the country.

      The next generation is looking to us to provide them the experience and knowledge to make informed decisions about their future. At least given the position I’m in, I can teach my kids and others willing to listen on how to educate yourself (not relying on others) and be more aware than I was.

  • Reply Sarah |

    Your story is one I’m really interested in. You seem like you’d be a great blogger for this site!

  • Reply Jim |

    Hey Matt,

    Great story! I also follow the blogs you mention and have been for years. To be honest I think I follow about 100 personal finance blogs. You can say it is a hobby of mine. Reading about Personal Finance, Internet Marketing, and Business is a passion of mine. What part of the country do you live in?

    • Reply Matt |

      Hi Jim! I live in the rust belt of the great lakes- so the cost of living is next to nothing.

  • Reply jaye |

    Hi Matt:
    Thanks for sharing your story. I have 3 kids, and my eldest is going to college next year. I would love to know what school you went to (if you don’t mind sharing), and what state school you could have attended.

    For my son, who is set on being a doctor, our state school is not a good option. He is getting offers of about 15K-18K/year in scholarships, which sounds great until you do the math. All of the state schools he applied to have tuition in the $40-50K range. The private schools are in the same range. Unbelievable. I would love to know more about where you went and what you think you should have done instead. Thanks!

    • Reply Matt |

      Hi Jaye. I attended a small, Catholic university in Northwest PA- for various athletic and academic reasons. I should have stayed in state and went to a SUNY (State University of New York) school.

      I looked up the current tuition of my alma mater and it’s up to $28,000 per year NOT including various university fees ($1,000+/semester) and room and board for your Freshman year ($13,000). Is any 4 year degree worth paying back $150,000 come graduation? I can’t think of any.

      To be honest, I wish I would have took a year or two off of to learn what it meant to work 40 hours a week to pay for necessities. Learn the true value a dollar and not the “working weekends to pay for cool, new clothes for school” type value. When your 17-18 years old, it’s hard to comprehend the value of $100,000+ when the most money you’ve ever owned isn’t even $1,000. It’s almost abstract. And then you don’t even have to pay that $100,000 back for 4 years- no worries.

      Joining a skilled labor union as an apprentice wouldn’t have been a terrible thought either. I’ve seen the pros/cons of being a skilled union member and it’s not the nightmare high school officials had me believing.

      Hope that answers your questions.

So, what do you think ?