Don’t ask me how I did it, but I managed to escape college with zero credit card debt. In fact, I’ve never had credit card debt. While I wish I could say that this was because I was an extremely responsible college student (if there is such a thing), it was actually the result of ignorance. I didn’t know why I would use a CC, when my debit card worked just fine. I’m kinda dumb I guess, ’cause I never really realized I could buy things with the CC that I didn’t have the money for. I just thought it was another way to pay, kind of like cash or a check.
On another note, I started contributing to my 401K the day I began working. Not because I was a genius and knew how compound interest works, but because someone shoved a bunch of paperwork in front of me. Like a mature/confident man, I ran to the HR department to ask them how to fill out my various benefit forms. When we got to the retirement section, the lady recommended I contribute 5% to my 401k. I didn’t know what that meant, but I didn’t want to look stupid so I just did as she said.
When it came to my student loans, ignorance was the complete opposite of bliss, it was un-bliss(?). My tuition ran between $25,000 and $30,000/yr. I had a partial scholarship, my grandparents gave $5K each year, my parents paid a portion, and I took out some Stafford loans. I knew I would be graduating with some debt, but never knew exactly how much I was taking out. I just signed the dotted line and continued on my merry little way.
Fast forward to Senior year. I sit down for my college loan exit interview (where they explain what your payments will be and how to pay them, etc) and am given my student loan summary. I was expecting to see a $15,000ish balance. You know where this story is going, I actually had borrowed $28,000. I freaked out. And again, I did what any grown/mature man would do, I called my mommy. I was convinced a mistake was made. Maybe they had given me someone elses paperwork? Nope, I was just a big idiot and took on more debt than I thought.
So while I understand why the phrase “Ignorance is bliss” has become popular, I vote it should be changed to “Ignorance is bliss when it works out in your favor, and it sucks really really bad when it doesn’t.” Seems a little more appropriate, doesn’t it?
Can you think of a few areas in your financial life where ignorance helped you out? How about where it ended up kicking you in the butt?
If you want to see an example of where ignorance isn’t bliss, check the video below (someone needs to tell this guy he sucks at singing/dancing)…