I’ve come to the realization over the past couple of weeks that having a full-time job, a giant nest egg for my budding travel-related career and living without credit card debt have made me complacent with my own personal financial situation.  I’ve gone through all of the usual steps in saving for retirement and have built a respectable stockpile of cash to sustain myself over the next 18 months, but as I once again become an unemployed person taking big chances with my ability to earn an income in the upcoming years, I’ve realized that I simply did not do enough to correct my major financial mistake from the past – attending the University of Pennsylvania for my undergraduate degree and primarily funding it with student loans.

Of all the decisions I’ve made as an adult, my choice of college is the one that leaves me with the greatest internal dilemma.  On one hand, going to Penn was the absolute worst financial decision I could have possibly made, and ironic too, seeing as how I wanted to be an investment banker.  Then on the other hand, I can’t in a million years put a price on the friendships I’ve made there, nor can I say that the path going to Penn ultimately led me on, wasn’t worth the hassle.  My livelihood today, in the truest sense of the words depends on four women – Jaime, Lea, Missy and Mischa – who I cherish with all my heart.  I am where I am today because of several factors including circumstances out of my control and all of the decisions I’ve made, bad and good.  With that said, it’s hard to curse my decision to fund my secondary education with student loans.  Still, as I look at the long road of payments ahead of me and worry about how the consequences of that choice might affect my future happiness, I can’t help but feel disappointed and defeated.

The whole point of mentioning my experience with student loans and lax saving behavior would be gratuitous if it didn’t serve some purpose other than whining about the sole hardship I have in life.  Instead, the purpose of this post is to shed some light on how people like me end up making bad financial decisions and how to pull ourselves out of it.

What went wrong?

I didn’t know what I didn’t know.  Yes, when I was 18, I was confident that financial services was the right path to earning lots of money, and that would guarantee me a secure future, which would then obviously translate into happiness.  But, like most 18 year olds, I was far off the mark in having a genuine understanding about what I really wanted in life, how to get it or even what the consequences would be for taking out student loans that totaled $114,000.

I believe it was around the middle of my sophomore year when I instinctively knew something was wrong.  Wharton (the business education arm at Penn) was not for me.  It wasn’t that the concepts of finance weren’t interesting to me, it was the culture that didn’t appeal to me.  I didn’t think I could compete well in this field, nor did I even want to compete and network and play golf with managers to get promoted (in one of my jobs, I was actually told by a senior-level manager that I should learn to play golf if I wanted to get ahead in my career).  Playing golf is about as appealing to me as being Tiger Woods’ publicist.  I knew I wanted to redirect my studies and pursue an alternate career, but after the sobering discussion with a school counselor at Penn who explained that I would have to incur a 5^th year of college costs to catch up in their architectural program, I crawled back to the Steinberg-Dietrich Hall for my next set of lectures and convinced myself to give the Wharton thing another try, not once entertaining the thought of transferring to another college altogether.  At 26, when I finally did change my mind once and for all about finance, I was way too far in debt to return to school for another Bachelor’s degree.

Now, changing my mind about what I wanted in life at 18 is hardly cause to label myself as a cautionary tale just yet.  Most people do spend their 20’s on an emotional roller coaster trying to figure themselves out from both professional and personal standpoints.  However, this particular problem of mine was exacerbated by the next mistake.

I didn’t work hard enough for the money I borrowed.

The loans themselves were bad, but the fact that I didn’t realize that taking out so much money for an undergraduate degree was not normal, was the most damning problem I had.  There’s no doubt that Penn is one of the best higher learning institutions in the world that can open an exorbitant amount of doors for young professionals, but the truth is, in my particular case, the net present value of attending Penn was negative.  I was investing in my future career with way too much liability, and to be quite frank, my abilities were just not good enough to earn a return on my investment.

I was an excellent student in high school, but at Penn, I was mixed in with some wildly intelligent, talented and hard-working young individuals and on the scale of relativity, I became an average student.  Unfortunately for me, average students do not get the extremely lucrative jobs as investment bankers, which would then make my student loans look like pocket change.  For the amount of debt was taking, I really needed to step up my game to become more competitive in those senior year interviews, but never mustered up the nerve.

Obviously in retrospect, it’s for the best that I didn’t excel in my chosen field, but still leads me to the conclusion that all other things being equal, I should have chosen a more affordable college.

I decided to reward myself too soon.

After college was over and it was time to start paying off my loans, I had the right attitude and was determined to pay them off as fast as I could.  I have no doubt that if I maintained the same level of determination to paying off my student loan that I had from 22-23 throughout my 20’s, I would be near the finish line of paying them off completely by now (for reference, as of this post, I’m 2 months shy of 30).  With my first job out of college working at GMAC in Detroit, I stuck to a strict budget of $800 a month for all living expenses and $1,200 for student loans.  I was making some serious headway, but resorted to eating, traveling and entertaining myself minimally so much so that my main hobby became knitting scarves.

When I made the move to Baltimore with a higher paying job, I assessed how much progress I made with my loans (I paid off about $15,000 in principal in one year) and decided that I could relax my prepayments and enjoy life a little more.  This attitude eventually moved along such a slippery slope that I got to the point where I was making the minimum payments by the time I reached 26.  Though, I had also reached my breaking point in my career at this point too and went into saving survival mode to get out.  I eventually quit my job at 28, but looking back again, had I simply switched companies and stayed in my field for perhaps 2 years longer, I’d be debt-free.

So How Am I Going to Fix This?

Now that I’ve analyzed the problem and laid out how I got to this point, I obviously need to do something more proactive than writing a post, but I’m not about to give up on a travel-related career just yet.  Before I was trying to make traveling as a lifestyle my ultimate goal and tried to accomplish that by traveling for as long as my current savings would allow.  This meant, paying my student loans month to month, but paying the minimum amount.  Now I’ve decided to incorporate larger payments into my monthly budget, and I’m also giving myself a strict timeline of 18 months to travel as I did last year.  In these 18 months, which started yesterday, I need to either make serious headway into finding a travel-related job or I need to go back to working full-time in finance or I need to re-watch and study the movie Heat to begin my new career as a bank robber.

The extremely and unfortunately ironic point of this article though is that, with all of the financial analytics I do now in my daily life, would I have even known about my awful current financial situation had I not received the education I did at Penn?  This highlights unfortunately, one of the biggest challenges in life – learning through hindsight.  Though, now that I have re-prioritized unloading this extra baggage of student loans in my life, it’s simply a matter of being patient with the process.  However, it would be easier to be patient if the Penn alumni groups would kindly stop sending me e-mails asking for donations.