4 Things I Learned from Paying Off $30k in College Debt


These days, graduating with student loan debt is common.

Among the 2018 graduating class, 69% of students took out student loans with an average balance of $29,800. Even though I graduated from college more than a decade ago, my results were pretty similar.

When I walked across the stage at graduation, you could almost see the tumbleweeds blow through my bank account. On top of that, I was now the proud owner of a $26,000 student loan balance, and let’s not forget the $4,000 I owed on my credit card. To say I was financially unprepared for the real world would be an understatement.

With my shiny new degree in hand, I packed up my belongings and moved back home to my parents’ house. Buoyed by the knowledge that I wouldn’t need to start paying back my loans for another six months, I started my job search.

While I was a little worried about finding a job in my field after graduation, I was pretty sure that everything would work out. I hadn’t told my parents about the credit card debt, but I was able to scrape together just enough to make the monthly minimum payment.

My parents had always taught me to be responsible with credit cards, giving me one in high school so I could build my credit. They gave me a spending limit and paid off the balance each month. Obviously, that lesson went in one ear and out the other.

Good Judgement Comes from Experience

There’s a saying that goes, “Good judgment comes from experience, experience comes from poor judgment.” While some people can learn from others’ mistakes, apparently I like doing things the hard way.

When I got my first job, I was 16. Shortly after that, I got my first car. The newfound freedom was intoxicating. As most teenagers can attest, having my own set of wheels and a little spending money meant the world was mine for the taking.

I’m a spender by nature. From new clothes and shoes to dinners out with friends, money left as soon as it hit my bank account. Since I pretty much always had a job after I turned 16, this was never much of an issue.

While I spent money, my spending was always limited by my paycheck. There was little thought in my mind about saving or investing those funds in any way. Money was meant to be enjoyed, and I tried my best to do just that.

When it was time to apply for colleges, I ignored the more affordable in-state schools in favor of options that would take me to new places. Going to an out-of-state university meant a greater financial burden for both me and my parents, but taking on student loan debt seemed like the norm. In my mind, I would graduate with a four-year degree, get a job, and pay off my debt just like everyone else did.

woman reviewing her budget spreadsheet

Hitting Rock Bottom

When all was said and done, my portion of the college bill was a little more than $26,000. This didn’t take into account the loans my parents had taken out to fund my education. As you might remember, I had also managed to rack up credit card debt to the tune of $4,000.

For the first couple of months after college, I was able to cover the minimum on my credit card bill with whatever money I had left in my bank account. But with no income, I soon didn’t have enough to cover that either. At this point, I wasn’t even thinking about my student loans since I didn’t have to start repayment until January of the following year.

Even though I kept applying to open positions and sending out resumes every day, I wasn’t having any luck with the job search. While living at home was free, I didn’t have any spending money. I was just trying my hardest to keep my parents in the dark about my credit card debt.

As the next credit card statement came in the mail, I realized there was no way I could afford the minimum. I finally had to face reality – I would have to ask my parents to bail me out.

After my panic faded, I scrounged up the courage to explain the situation to my mom. This was one of the hardest conversations I’ve ever had with her and a turning point in my personal finance journey.

Learning About Debt the Hard Way

While she wasn’t happy about my debt, she agreed to help me out on the condition that I found a job as soon as possible. She wanted me to pay off my debt as quickly as I could and use it as a learning experience.

We also agreed that I would pay her back as soon as I started earning money. After living on my own in college for four years, crawling back to my parents was a tough pill to swallow. But looking back, I’m glad I learned this lesson early on.

With the credit card debt hanging over my head, I found a job that was semi-related to my degree. While I didn’t particularly like it, it paid well enough to allow me to make a dent in my debt. Over the next few months, I poured as much as I could into paying off my credit card bills.

In the meantime, I started researching personal finance and learning the basics of managing my money. Even though I had my college degree in hand, I was woefully unprepared for the challenges of the real world. I scoured websites, blogs, and books from the library to learn as much as I could about being financially responsible.

After having to move back in with my parents and ask them for money, I vowed to regain my independence. My debt was just the kick in the pants I needed to take charge of my finances and never look back.

4 Lessons I Learned Graduating with $30K in Debt

Financial education is still severely lacking in both high school and college curriculums. While students learn how to solve complex math equations and write essays, most schools fail to teach basic money skills like how to make a budget.

Having grown up thinking debt is normal and money is meant to be spent, I had to change my mindset. This took a lot of research and hard work, but it was well worth it. Here are the lessons I learned from graduating college with $30K in debt.

1. Every Dollar Has Value

One of the first things I did was to look through my old credit card statements. Since I had racked up all this debt, I wanted to see how I spent that money and what I had to show for it.

After looking at one credit card statement after another, I came to a shocking conclusion: I had nothing to show for all that spending. Most of the money I spent had been on drinks, eating out with friends, and clothes I no longer wore.

This realization made me re-evaluate money and how I was spending it. I didn’t particularly like the job I was working, and it was a wake-up call to realize that all my paychecks were going to my past spending.

Pouring my entire income into paying off debt changed how I thought about money. It fueled my newfound interest in personal finance and helped me understand how to manage my money the right way.

For me, this was a turning point that completely changed my life. Had I not graduated with debt, I’d still be living paycheck to paycheck, struggling to pay my bills. This experience taught me the value of every dollar I made and saved.

woman reviewing her budget on her computer

2. Money is Freedom

One of the main reasons I had to move back home after college was a lack of funds. When I graduated, I had no money, no job, and no prospects. All I had was my degree and a bunch of debt hanging over my head.

My parents were kind enough to let me move back home while I searched for a job, but not everyone has this option. I’m deeply grateful that I got the chance to live rent-free while I figured out what to do next.

However, after living on my own for four years in a different state, being back in my old bedroom was painful, to say the least. Every day was a reminder that I now had to answer to my parents.

The goal of paying off my debt and moving out on my own again fueled me during those long months. It was the light at the end of the tunnel as I continued sending out applications and going on interviews for jobs in my field.

It took me two post-college internships before I landed a full-time job that would allow me to move out. All my credit card debt was paid off by this point and my student loan payments were manageable.

Learning from past mistakes, I worked on building a solid cash cushion before moving out on my own. My salary from the new job wasn’t very high, but I worked hard to keep expenses to less than 70% of my income, including rent.

This is one of the most important lessons you can learn as an adult. Having money means freedom and choices. A high-paying job won’t give you any more freedom than a low-paying job if you live an unsustainable lifestyle.

3. Having a Support System is Crucial

While I hated moving back home with my parents or asking them for money, having their support was invaluable. Without that safety net, I’d likely not have been able to pay my debts.

If I had tried to live on my own, I would have just added to the balance paying for rent, utilities, and food. It would have cost me thousands of dollars in additional debt.

Not only did my parents provide room and board – they did it for free. In high school, I took this for granted. But after moving out on my own I was able to fully appreciate their support.

All through college and during the summer, I worked a part-time job so I could pay my bills. Even though I still wasn’t saving money, I learned some important life skills. It was the first time I had to rent an apartment on my own, pay for utilities, buy groceries, feed myself, and so on.

This made me appreciate my parents even more as I moved back home. While I wasn’t happy to be back where I started before college, I had a better understanding of what it would take to live on my own again.

My parents helped me get back on my feet and offered financial as well as emotional support. Once I was making enough to get my own place, I moved out with the knowledge that I was always welcome to return. Having that safety net made the transition much easier.

4. It’s Possible to Live Well on Less

As I mentioned previously, I’m a natural spender. When I used to work retail, I joked that they could pay me in store credit since all my money went to shopping. While I always had a job growing up, I spent all of my money – every last cent.

Growing up, my mom was the saver and my dad the spender. My natural inclination was to make money and spend it quickly. No matter how much I tried, I was never able to save a significant amount before spending it all.

Facing my mountain of debt without the safety net of a paycheck was a wake-up call. This is when I realized the value of spending less so I could build cash reserves. Had I not spent all my money on clothes and food, I would have had enough to pay my bills. Better yet, I would have most likely not fallen into credit card debt in the first place.

I learned to separate my needs and wants. Knowing my income was limited and I had debts to pay, I made tough choices and skipped fun experiences with friends. Many of the things I desperately craved were just wants. There wasn’t much I needed to be happy.

The Bottom Line

Reading personal finance blogs empowered me with the knowledge to turn my finances around. It taught me the value of living on less and saving the difference. Using the lessons I learned, I paid off my debt and built an emergency fund.

Now that I’m debt-free, I can look back on this time in my life as a learning experience. While I didn’t appreciate my struggles at the time, I now see how those difficulties shaped my worldview for the better.

These days, I love figuring out different ways to save money and build my cash cushion. My husband and I are debt-free, including our mortgage and cars. The lessons I learned early on motivated me to broaden my financial knowledge, and ultimately led me to where I am today.

What has shaped your personal finance views? Share in the comments.

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