How I got into debt Part 2
So we left off and I was just getting ready to start college. I started college in January of 2007 at Dakota State University in Madison, SD. I was majoring in Compute Information Systems. A few days before classes were going to start I moved up into the dorms with the help of my parents. I got all settled in before my roommate had started moving his stuff in yet. I met the people on my floor and started making new friends. I was lucky that a lot of the stuff I needed for a dorm room I had gotten as graduation gifts from high school like a mini fridge, microwave, etc.
Now do you remember that 32 in TV that I had bought? I left it at my parents house and brought an old tube TV that I had gotten in high school. Seems like a good use of money eh? Now, this first semester of college I had most of my classes paid for with scholarships and tuition assistance from the military. I don’t remember for sure, but I think I had also taken out $1000 student loan. I don’t think that I needed it, but did it anyways. Most of that money I got back in a refund check, so I was like hey this is just money I can use for other expenses. Looking back on this I wish I hadn’t done that, because it pretty much became a standard every semester.
Now, after a few weeks I started a habit of buy stuff on eBay that I definitely didn’t need. I remember one instance I bought a rack mount server on eBay for $150. I think i bought it with the plans of using it as a server for testing stuff on, but I did not do that and it just ended up sitting around. I also ended up buying a lot of Xbox 360 games to play with other people on my floor.
I honestly don’t remember how much money I had left from my enlistment bonus and savings. I didn’t get a job while going to school. I had my monthly guard check, plus now that I was in school I was getting around $600 a month from my GI Bill. So in March of 2007 I bought a 2006 Chevy Cobalt LS. I felt that I needed a new car. The car was a little over $16,000. I took out a 5 year loan on it at 9.8% interest. I thought that was great, because I still didn’t really have any credit and I didn’t need a cosigner on the loan. The monthly payment was around $280-$300 a month although I don’t remember for sure though. So now with a new car I also had to get car insurance. I started out with Geico who was the lowest I could find for insurance coverage. It was about $1200 every 6 months. Which I thought was ridiculous since the insurance payment was almost as much as my car payment was. A few weeks later some one in the guard told me about USAA so I checked with them for insurance. I switched to them because they were $800 every 6 months.
So I now had a car payment and insurance payment in total of almost $425 plus a minimum payment on 2 credit cards. That was with an income of about $750 a month. Would you say that I was using my money wisely? Because I have to say that I wasn’t and this was just going to lead to more trouble.