Category Archives: Debt

How a Debtless Aloysa Became Buried in Debt

This post was inspired by Minting Nickels and her post My Money at 20.

This post was featured in Carnival of Personal Finance #285.

Many years ago, on another continent, in another country there was girl who graduated from the state university with a Master’s degree in Library Science. Since there were no library jobs that paid well, the girl got a job at a private wholesale company. In five years the girl was earning a decent salary (let’s not compare it to a dollar equivalent not to get confused). Years later the girl collected all the courage she had, said goodbye to her friends, quit her stable and promising job and moved over the Atlantic ocean to start a new life.

And the new life began, indeed…

My first year in the States was not easy financially. I came to the United States with $200 in my pocket and no debt. I was an international student and my stepfather financed my first year in school. As an international student I could not even get a part time job. The fashion and style in the US was quite different from the fashion in Eastern Europe, and my $200 went pretty fast spent on new clothes.

During my second and third year in the US, my English became much better, I got a part-time job, and most importantly I discovered the pleasures of shopping. Honestly, I became addicted to it. This relationship was based on my past experience. The Soviet Union stores were not glamorous or inviting. I remember dim lights, brown and grey interior colors and the gloomy faces of the sales people. The customer service was non-existent. Clothes and shoes all looked the same: dark colors, shapeless form. Now, imagine a girl who came to the United States and saw all the goods offered to consumers with shiny smiles on the sales people’s faces. Imagine a little kid in Disneyland with free admission and endless possibilities.

It was a very expensive addiction and it needed to be financed. By then I was working a part-time job, so I could apply and get a credit card. In spite of my miserable earning potential, I managed to get a credit card and my life was changed forever. I was able to feed my shopping addiction. I could never have enough clothes, shoes, handbags and so on.

Eventually I ended up having multiple credit cards. The problem with that was that I could not pay for them. I got a second part-time job and the circle was finally complete – I financed my education and my lifestyle with small paychecks and credit cards.

In my fourth and fifth year I got a full-time job and moved out of my parents house. I was able to rent a small ghetto apartment and enjoyed my independence for about six months. My future husband moved in with me later and helped me out with the rent and other expenses.

Meanwhile, I noticed that more money I was making, the more I was spending. Isn’t it a paradox? I never had enough and was living from paycheck to paycheck.

During my sixth and seventh year I was pulling myself through grad school using student loans. My husband and I financed our European honeymoon with credit cards and buried ourselves deeper in debt. Fortunately, I got a full time job and a year later I got a huge promotion. That’s when it hit me. I was making good money and could not afford a lot of things. So, I took a closer look at out finances.

It was (and still is) embarrassing to admit that an accountant who makes a good salary and enjoys working with numbers could not budget and take control of her own finances. That’s when, for the first time in my life, I created a budget. It was a turning point in our financial disaster. Another turning point was when my husband and I made the greatest decision ever – if we cannot afford to pay cash for something, we don’t buy it. We save for it.

All the subsequent years still are devoted to paying off debt. It is not easy. There are a lot of things we are not able to do. We bought a small one bedroom condo instead of a house. We don’t have big international vacations unless we save up for it. Most importantly, I never pull out my credit card when I go shopping. Cash is my best friend now.

Thanksgiving is tomorrow and let’s be grateful for simple things such as being with a family during the holidays, having a job and a paycheck, being healthy and loved, being with someone you love. Lets be grateful for being bloggers, supporting each other and belonging to a blogging community. Happy Thanksgiving everyone!

A side note: I changed the name of my blog. Nothing major but now it is called Aloysa’s Kitchen Sink. Also, I opened a Facebook page. You can find me under Aloysa’s Kitchen Sink. Please stop by, say hi and become a friend!

EDIT: This article was featured as an Editor’s Pick in Carnival of Money Stories # 82!

How I Got Overeducated and Loaded with Debt

My first culture shock was when I got admitted to an American University. It was not an Ivy League school, not a private college. I got admitted to a small town University with a good name and decent reputation. I came as a foreign student on a scholarship. The scholarship that I was awarded barely covered half of the cost of the tuition. It did not cover textbooks. As a foreign full-time student my tuition was a little over $4,500. The scholarship was a little bit under $1,500. The first year in school my stepfather generously covered the difference. He also bought me the textbooks.

First time I saw the prices of the textbooks and supplemental study guides I needed for my courses, I became flabbergasted. Scattered thoughts raced through my mind. Who in the world could afford to pay the full price of the tuition and, on a top of that, throw in an additional $400-500 for the textbooks? That day, standing in the middle of the bookstore, I understood those people who said that education was not important in order to succeed in life. I also realized why I saw a lot of students from Saudi Arabia and Kuwait on the University’s campus.

Back home I graduated from the local University with a Master’s degree in Library Science and Information Technology (I still don‘t understand why it was called Information Technology as we never had any computers). I never had to pay a penny for education or for the textbooks. Free education was one of the greatest perks living in the former Soviet Union. In fact, I got paid for good grades. The payment was called a stipend. The rules were simple: a student should maintain a certain GPA level and once a month a stipend would be paid to provide for one’s food and living expenses.

There was neither need nor time to work. The classes would start at eight o’clock in the morning and go on till five or six o’clock at night. In the evenings, I had to do homework. I was paid to go to school and study hard. Our textbooks were used but they were at no cost to us. Every semester a student would check out a textbook from the library and give it back after the finals. Free was the price tag.

After a year of attending the University in the states, I finally figured out my new “be strong, be tough” rules. I was to study hard in order to earn good grades because a good GPA determined not just scholarships but also my future ability to get a good job. I also was supposed to work hard to pay for the classes, books and supplies. It wasn’t easy. However, I was one of those lucky students who lived with their parents. I had a home and home cooked meals.

During the first few years in the states student loans weren’t an option for me. However, I managed to get a second scholarship that helped immensely to cover the international cost of education. Still, making $6 an hour on a part-time job wasn’t enough. But I had a vision for myself. I had a goal. I wanted to get a degree in the United States, get a good job and start making money. This goal kept me determined, persistent and motivated.

My credit card balances grew like weeds in a field while I was pulling myself through the school. Later on a top of my current credit debt I added student loans. Six years and a boat load of debt later I finally graduated with my second Master’s degree in Accounting. I am still paying off my student loans but I can see the light at the end of the very long tunnel. Sorry for using such a cliché but I do see this light!

The cost of education still bothers me. Maybe it is my upbringing, maybe it is my student loans, maybe it is my human belief but I have to say this – education should not cost a penny.