A Ton of Bricks

I was very naive as a college graduate when it came to my finances. I generally knew how to save money, be frugal with my spending, but my actual my applicable knowledge of finances was novice at best. Having just graduated from a prestigious engineer school, I had accepted my first real job, was moving to another state, and was prepping to get married that summer, life was great. It wasn’t that I didn’t know what was coming my way, I just did not understand the gap of knowledge that I had to make up. The good news was that I had time on my side to figure things out before they really became a problem.

My understanding of college was that it is an investment in yourself. What I didn’t realize was who was fronting that investment. In order to pay for my computer engineer degree, I took out roughly $120,000 in loans, that had grown to $150,000 by the end of my four years. I always had the mindset that my job out of college was going to be good enough, and that I could a be a frugal saver to tackle that debt easily. I did not have enough experience in the real world to know what it was like to actually execute that plan, versus drawing it up in my mind. I got married the summer after graduation, and as a newly married couple we enjoyed our first few months of marriage, and didn’t worry about finances too much. We had some savings from previous jobs as a security blanket, but looking back we were just delaying the inevitable. Our deferral period was up 2 months after moving in together, and it was time to start actually crunching some numbers.

I started out with a mediocre budget sheet as an attempt to start making progress. I came to find out that I had never actually created a budget, just theorized on how I would do it. I’m proficient in Excel, but that doesn’t mean I know the practical way to estimate spending in a household with two people. Eventually, the first version of the budget sheet was created, and we felt okay about it. The budget had the minimal level of detail that we could have to see how we were spending and making money throughout the month. Then the ton of bricks fell on us. Up this point we only thought that our total borrowed amount was $125,000. By my mistake alone, I had completely forgot about the federal loans I had borrowed through the FAFSA program. That extra $25k brought us up to the $150,000 number, and we were devastated.

After being a moment of doubt, not sure how we were going to figure things out, my financial learning curve got thrown into over drive. This time I made a slightly better budget sheet, plus a few more months of living expenses to better gauge what our spending was going to be each month. We got the the total of our income and expenses at the bottom of the sheet only to see a negative number. It wasn’t much, probably less than $50 if I remember correctly, but as the man of the household I felt like I had failed for the second time in just a few weeks. How can I lead a family, when I have brought this burden on us? Not only that, but how in the world are we going to pay back $150,000 in debt with essentially a perfectly balanced budget. We did not want to be paying these until our kids were adults, so we made a decision. It was time to cut expenses, and work a lot more.

I look forward to continuing the story of our financial journey later on…

Looking back I’m not glad we were in that situation, but I am glad that I was forced to start learning about finances early in our marriage. I can’t imagine having to learn that lesson with multiple kids, a house, and a work schedule that I can’t escape. It wasn’t an easy lesson, but so far it looks like a forgotten login, and a negative $50 budget changed our financial lives for good.