Updated on 11.10.06

The Road to Financial Armageddon #3: Cash & College

Trent Hamm

Last time, we reviewed the mistakes I made during my earliest days of dealing with my own finances, and it was clear that I was already showing some grave errors in financial planning. After high school, however, I found my way into college, an environment where I would have an opportunity to learn many things, including the meaning of financial planning. Unfortunately, I made just as many mistakes there as I did in high school.

I would have never gone to college if I had not been blessed with a four year full tuition, room, and board scholarship. I had no college savings at all, so my opportunities for education boiled down to burying myself in financial aid, praying for scholarships, or preparing to directly enter the workforce.

Yet this was the source of my first mistake: I had no idea of the value of my college experience. I was the first person in my family to go to college, so I didn’t have any idea what to expect when I went to college. My belief was that you just took a few classes and goofed off a lot, because this is usually the “pop culture” attitude towards college. So (for the first few years, at least), that’s what I did. I goofed off and took classes and really didn’t think about what it all meant.

What I should have done with this huge financial gift is spend my first year really focusing on determining what I really enjoyed doing, then spend my remaining years working to excel in that major. Instead, I almost completed a major in a half-hearted fashion, realized it wasn’t for me, and finally started to get my head on straight by about the end of my fifth year.

That was my second mistake: I went for longer than I needed to, and I let the student loans finance that extra time. I spent two extra years in college after the end of my full scholarship, completing two full majors and building up a substantial amount of student loan debt. I took out the biggest loans that I could in order to be able to prop myself up in a very nice apartment with only one roommate, which is still perhaps the nicest place I’ve lived in in my life. It was all financed by loans.

My third mistake was not taking advantage of all of the opportunities the college experience gave to me. Rather than seeking out interesting meetings and organizations and extra classes that could have personally and professionally benefited me, I spent my spare time in the dorms playing GoldenEye or out on dates. Given the opportunity again, I would have loved to invest time in organizations where I learned how to speak in public and debate or attended some of the countless free talks and seminars or volunteered my time to a worthy cause instead of burning days sitting at a computer playing Warcraft II, but I didn’t know any better.

The end result is that I left college two years late, saddled with two years of student loan debt, with only my education and nothing extra to show for it. I did manage to not put myself into credit card debt during my college years; those stupid moves were yet to come. How did I start down that path? Tune in tomorrow to find out.

Want to jump quickly to the other Road to Financial Armageddon posts? Here’s an index to help you out.

#1: The Earliest Mistakes
#2: Early Profits … Lost
#3: Cash & College
#4: The First Taste of Real Money
#5: Love & Marriage
#6: The Yuppie Years
#7: Here Comes Baby
#8: Meltdown
#9: The Road to Recovery
#10: What I Learned

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  1. Him says:

    Ah, GoldenEye. Such fond memories of college.

    I’ve enjoyed your story so fay, even if the story itself isn’t as enjoyable.

    At least you figured out what you wanted to do sometime; many leave college without a clue.

    I’ll be reading the rest of your installment.

  2. Afiya says:

    OMG!! I had to stop reading this installment and write to you right away! You’ve basically told my story! I have experienced life almost exactly as you have in terms of finances and college. I too stayed too long and didn’t focus. I’m 30 now, under skilled and drowning in debt. But now I get that it had a lot to do with my past. Thanks for sharing your story and helping me to learn from my mistakes. I’ll keep reading!

  3. Robyn says:

    Most kids would probably be better off working for a couple of years before even thinking about college. Let them see what the world’s like and get treated like dirt for awhile at a job they hate.

    I want my son to go to college, but I’m not pushing him extremely hard to go as soon as he graduates. I don’t think he’s ready to make that kind of commitment, and I don’t want him to blow his financial aid opportunities by fooling around and not making the grades necessary to keep it. He needs a little growing up time, first.

  4. Ohhh….Starcraft was my weakness. Luckily I steered clear for most my college career and kept my expenses/debt low (thanks to some help from my parents) and kept living that lifestyle as long as I could.

  5. Potatorioles Fan says:

    I went through many of the same experiences as you. I was raised by a single mom, and was never really taught how to manage my finances. Any money I made in high school or college went to her, to help her pay bills and pay off my student loans.

    We couldn’t afford tuition, so I had to get financial aid for all 4 years. Now that I’m paying it back, I kind of regret not applying for scholarships and other resources to lesson the financial load.

    Like you, I’m in my late twenties, and I’m finally looking back at what I should have known compared to what I know now, and I’m trying to do better in all aspects of my life.

    Great blog! Keep it up :)

  6. MoneyEnergy says:

    Ouch… I feel the pain here! Especially not being able to use that full scholarship to the utmost – a true financial gift. Well from one extreme to the other – look where you are now! Thanks for sharing this… hopefully I can also get as much insight out of some of my mistakes.

  7. Daner says:

    Oh, how I know this story. I’m currently finishing my masters degree and, looking back, I could have done a lot better both on grades and on planning the whole thing better. Good to know that it’s never too late to turn around and do something about your previous mistakes.

    This is a great site that I will definitely follow in the future. Great work :)

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