In regards to the picture. Debt can be like the weight of your pack on your first backpacking trip.
Life right after college was full of possibilities. I know first thing was first. I need to get a job. At the time, I was still irresponsible with my money. I didn’t understand money, other than how to spend it, let alone how to manage my personal finances.
I got my first job out of college at a call center in Ottawa a mere two months after graduation (2004). It didn’t pay much, but I found a roommate, split expenses and started saving to travel Europe for two months. My goal was $6000 for those two months. Plenty of cash plenty of time right? You bet, now I didn’t do much research to come up with that figure it just seemed like a good number to enjoy most places in Europe I wanted to go.
So months went by, and I was starting to build up some real cash. Considering I was only making about $1600/month I and I was up to $4000 saved for Europe I thought I was doing good. As luck would have it, a tax return came in and gave me a nice boost just over $5000. Sooooooo close I could envision myself on the plane staring down at the incoming shorelines of my very first backpacking adventure. Another paycheck came in my travel fund was almost full.
Everything was going great until… I get a phone call.
Guy: “Can I speak to Mr. Gallagher please?” Me: “This is him” Guy: “Mr. Gallagher, you have defaulted on this portion and that portion of your student loans and have been moved in to collections” Me: “uh, what the &^$#! are you talking about?”
This is where it actually got a little complicated. I had been paying a portion of my student loan but because of who manages student loans in Canada changed while I was in college. Part of my loan was with the bank, part of it was with the government. This also made a student loan consolidation impossible.
Now, I’m not sure if you have ever had to deal with a collection agency before but it is brutal. Expect to be harassed and threatened in to payment. This person did not stay civil past informing me of my default. Not that I did anyway, but I was more in shock then ready to pick up arms a fight over this. I took all the information (dates & amounts) and called up the bank to verify everything and sure enough the bank sent me all the paperwork.
Did I not mention the amount? Just over $6000 dollars… my heart fell on to the floor.
That’s everything I had been working towards. Now I did look at other options the first being, well I’ll just worry about it when I get back. Maybe trying to settle on a specific amount? I started to read some personal finance books and blogs. I came to realize the advantages in life of having a good credit score and how much it costs to be in debt. When faced with these situations you do need to think long term. That meant paying off debt wins. So at the time it felt like I was flushing my travel fund down the toilet. I promised myself from this day forward I will be financially responsible in my daily life and apply that to the way I travel. After all, the less you spend the longer you travel right? (there are exceptions but that’s a whole other post) I viewed this just as a delay. I was still going to build my travel fund back up and make that jump across the pond.
Now, I think it’s one of the best decision I ever made. I stand now completely debt free before the tender age of 30. And I still managed to go to Europe, twice! It just happened a little later than I expected. What I’m trying to say is do not forget about life, and financial management is one of the biggest parts of growing up. Try to take care and understand this side of things as well as chase your travel dreams.