Ignorance is bliss (sometimes)

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)…

11 thoughts on “Ignorance is bliss (sometimes)

  1. I have been reading for a while and really like your blog.

    As an also, young and financially responsible individual, I did the same thing in college. The only exception is my credit card. I used a credit card, but never spent what I didn’t have. I like having a credit card because at the end of the month I can tell how far off I was from my goal and big number one month will really make me cautious the next.

    I did the same with my 401K as well, I started contributing right away and at 5% (what HR told me). Best ignorant thing I have ever done. The best part is I never missed the money I contribute because I never really saw it in the first place! Sometimes I think 401k contributions for recent grads should be required.

  2. My dad told me to buy some hilton stock with the money I had saved in my Schwab account. I bought it when I was 18 or 19. Two years later, Hilton was bought out and my $1,000 investment turned into $4,000. Made $3,000 doing absolutely nothing. That $4,000 then started my Roth IRA. I had no clue what I was doing, but it turned out great. Other stocks I wasn’t so lucky 🙁

  3. I always contributed to my 401K since my first day out of college. The blind part was just buying company stock. It was a great thing at first because it did very well, but in 2008, it became the worst mistake I’ve ever made. (company lost 80% of it’s value at one point).

    Now I have some catching up to do but it’s still better than having no savings at all.

  4. Im right there with you on the 401k thing. I had no idea what a 401k even was but I signed up anyway lol. A few months later I started learning and caring about money. So I guess it all worked out.

  5. It’s nice to hear about someone who didn’t use credit cards. When I graduated from university and started my first job (8 hours away from home) I was living pay check to pay check. Except my boss paid me a week late (which is legal) and then the bank would hold the check for a week. By the end of the month I would have nothing to pay for groceries with. For some reason I never thought to use my credit card, I would always call my mother and borrow the money from her for a week. I have completely paid her back, but still have never carried a balance on my credit card. I also didn’t have any school loans, maybe Canada is cheaper? But I did live with my parents and never bought anything.

  6. The worst decision I made started when I was 15 years old. I wanted to buy a car, and I found an old 1962 Chevy Impala for $2,300. My step-dad told me that if I bought it, he would help me fix it up and we could actually resell it at a profit. I basically spent every dollar I made in high school (thousands and thousands) making payments on that car, buying gas and insurance, refinishing the entire interior to its original form, and fixing the countless mechanical problems.

    When I was ready to sell, I found out that nobody wants a classic car with four doors. My car would have been worth roughly $6,000-$8,000 if it had two doors. I ended up selling the car for $2,000. I should have never spent a dime trying to fix that car. I probably lost three to five thousand dollars.

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