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Dealing with Money: Being haunted by the ghosts of student loans

by C., Dimespring 30 (@dealwithmoney)

If I had a dime for all the mistakes I've made with money since graduating college, I'd be a very rich woman. But, as it turns out, I'm not. In my opinion, my biggest mistake of all was this: not paying down my student loans while I had the chance to.

I graduated at the end of 2010 with two large loans composed mostly of Stafford loans, and a small loan made up of all the Perkins loans I'd taken out over my six and a half years (you read that right) in college.

The Perkins loans totaled $8,046. I was working when I graduated from college, and I was making about $700 a month. Now this is obviously not a fortune, but with living at my mom's house, I had very few expenses. It would have been easy to set aside $400 every month to pay off my small loan. By my calculations, if I'd put $400 toward the loan every month and used my tax refund at the beginning of 2011 to help pay it off, that loan would be down to zero by now. That means I wouldn't be worrying about consolidating it with all the rest of my debt, as I was earlier this month.

READ: Crisis Button: I'm about to miss a student loan payment 

I believe one of my biggest mistakes was not getting rid of student debt while I was still employed and had the opportunity. Having been out of work for nearly six months now, I've found, strangely enough, that getting rid of debt is a bit more difficult when you don't have a shovel to dig your way out of the mess.

I'd also feel a lot  better just knowing that one-fifth of my debt had been paid off. It would ease the burden in a way I can't imagine right now. I wouldn't have to imagine it if I'd just been smarter.

I was panicking about what I owed, yet my behavior did not reflect that panic. I was buying expensive electronics, going out to eat, and generally not keeping a close eye on my finances. That's not what a person should do when they're staring down a five-figure monster debt. But I did.

READ: Dealing with Money: What NOT to do with your money

I didn't have my priorities in order. I like to think that I do now, although there will likely always be slip-ups here and there. What I'm focusing on is that every day I AM getting smarter about money, regardless of what mistakes I've made in the past.

Student loans drag down your earning power and your net worth. It's always a better idea to pay them off while you can instead of letting them follow you into the future. Learn from my mistake — don't buy expensive toys, pay off those school loans!


C is a 28-year-old college graduate with an interest in personal finance. When she graduated in December 2010 with nearly $42,000 in college debt and no job prospects, she knew it was time to change the way she thought about money. She is currently figuring out a way to pay back what she owes and build a more stable financial future. C is a member of the Dimespring 30, a community of bloggers sharing their thoughts, experiences and perspectives on personal finance.