The 5 personal finance lessons $50,000+ of debt taught me

The 5 personal finance lessons $50,000+ of debt taught meThe 5 personal finance lessons $50,000+ of debt taught meHaving over $50,000 in total debt taught me a few personal finance lessons that I value today.These lessons were also some driving factors in my current financial independence pursuit as well.Of course, I dont encourage you to go into financial debt to learn some lessons of your own.I certainly would love to have that $50,000+ I paid back.But I also learned a ton by having this debt over the last few years, which I applied to my own financial education.I truly think it welches critical in where I am today and how I view personal finances in general.Follow Ladders on FlipboardFollow Ladders magazines on Flipboard covering Happiness, Productivity, Job Satisfaction, Neuroscience, and moreWithout this debt, who knows If I would be so enamored with finances today or where my path would have gone.So while I was never excited about having debt to pay back (who is?), it also gave me the foundation to be more successful financially.Firstly, accumulating $50,000 of debtDebt is notlage necessarily something to be excited about and it can hold you back from starting a family, buying a home, and generally enjoying your life.And having debt can add a lot of financial stress and pressure on you, which impacts your overall physical health, mental well-being , and relationships (spouse, family, etc).In a nutshell, debt sucks.At the highest point, I had just about $50,000 in total debt at once to payback.Heres what the breakdown looked like for meStudent Loans ($28,XXX)Car Loan ($23,XXX)Credit Card Debt ($1,XXX)Im sure you are looking at that and are saying wait, that definitely is over $50,000.True, but I bought my brand new car in 2011 when I already paid about $4,000 in student loans off.So in my lifetime, I had over $50,000 in debt, but at one time I had closer to $49,000.While it is a lot of debt, I was also fortunate in a few areas.I did not owe a lot to mystud ent loansas I had gotten good scholarship money, commuted to school, and my parents (and myself) helped pay part of the tuition.Additionally, the interest rates on my student loans varied from 4%-6%, not terribly high but that still adds up.Lastly, I was also fortunate that Ive generally been quite responsible with credit cards, never really racked up a lot of debt on it.This was a good thing since my credit card interest was 28%The personal finance lessons having debt taught meWhile Im not particularly excited that I had this amount of debt, I learned quite a bit and it was a piece of the financial puzzle that motivated me to make changes.Do I regret having this debt?At this point in my life, I do not and heres why.Having debt taught me about prioritizingHaving five figures of debt opened my eyes and taught me more about prioritizing my money.Meaning, I quickly learned how to decide where my money would best work for me and where I should (or shouldnt be) spending it.The thought of having this debt for a long time was not something I wanted to deal with.So many times, instead of spending money on the latest material things or going out, I learned when to keep my money in my pockets.I never really been one to lavishly spend, but with not making much money a few years back and having that much debt, I had to prioritize even more.This is something that Ive carried with me to this day, which I think has been beneficial to where I am financially now.Where prioritization plays in to my personal finances currently Where I spend my time with finances, prioritizing my spending habits, where money goes with investing, order of paying bills, etc.The importance of being organizedSimilar to starting to master the skill of prioritization, I also refined my organization skills by having this debt.This isnt too say I was a complete disorganized slob when it came to finances, but I also wasnt spending time on it or had a good personal system.With this debt, it taught me to be more organized with payments, paperwork, financial statements, etc.At first, I would just remember to make a minimum payment and throw any mail or other paperwork in a junk drawer.You know, everyone has those junk drawers filled with random stuff.And its totally cool, but not a place for important financial information when it comes to bills or paying debt.It took only one month for me to forget to send in a payment to realize I need to get organized FAST.I have never missed a payment since.And, I have all documents organized in folders and I keep track of payments.This carried with me for all personal finance and investing related items as well.That you can save money and pay debtYou might have readthis postthat I wrote a few weeks back, about a conundrum of paying off debt or saving money.In the beginning, way back in 2010-2011, I was really trying to figure out what would make the most sense.Do I aggressively pay off my debt without saving much?Or should I trot along with minimu m payments and try to rapidly save and invest?However, after a few years and my vested interest in personal finances, I found that doing both is possible and certainly okay.Is it the right choice for everyone?Certainly not and youve seen other stories where someone paid off six figures of debt in two years instead of saving or investing much.Its totally okayBut I learned that it is entirely fine and possible to do both.I focused on paying the high interest debt first (Credit Card), then focused on my highest monthly payment which was my car loan.This allowed me to pay off my car payment two years early, reducing my total debt.And by learning to pay debt and save, Im now over 95% done with my debt and saved/invested just over $80,000 in under five years.NoteMy car loan had a 5% interest rate, which was similar to my student loans.However, the monthly payment was also larger and wanted that money back for saving or helping pay extra towards the remaining debt.Right or wrong, that was my mindset.Budgeting might not be fun, but it helpsIve always been one to sort of wince when it comes to spending a lot of time on budgeting.In fact, for years I never had a person budget or bothered with one.Mostly for a few reasonsI hated spreadsheets at the timeI thought I could manage it all in my headIt bores me to think about it or look at itAnd I quite honestly had the, Ill worry about it later mentalityCurrently, Im still not a hardcore budgeter or look at my personal one very often.But I do have one that I start over each year and look at it maybe 1x a month.Point being, even if its not fun, you dont like spreadsheets, or you dont think its important to do, it can be very helpful.When my student loan payments kicked in, I didnt care about a budget for a few months.But not long into, I realized I need to create one and stick to it.This helpedprioritizeand stayorganized(See above).It also helped me visually see where my money was going, where I could cut expenses, and why I n eeded togenerate more incometo get rid of this debt and save more.To avoid high interest debt at all costsIf you look back at my numbers from above, youd notice majority of my debt is on the conservative interest side.Still, 5-6% adds up over time but I was lucky that I did not accumulate much high interest debt on a credit card.I did carry a balance back before 2014 which was consistently just over $1,000 for a while.But I remember always trying to stay away from using my credit card too much.However, seeing how much interest was paid to my student loan debt, taught me how much worse it could be with credit cards.Having student loan and car loan debt kept me focused on the future to avoid more badeanstalt and high interest debt.The thought and numbers scared me and still do today.This didnt mean I avoided using my credit card altogether, but it made me respect how and when I use the card.Ensuring Im able to pay if off right away.If I dont have the cash to pay for something in full on the card, I dont use it.A simple and maybe obvious lesson, but valuable nonetheless.The average American will pay $1,183 in credit card interest and 43.9% of families hold credit card debt in America.(Federal Reserve)Final thoughtsThere you have it, the five personal finance lessons I learned from having debt.Im sure there are a few other subtle items I learned, but these stood out the most to me.This article originally appeared on Invested Wallet.You might also enjoyNew neuroscience reveals 4 rituals that will make you happyStrangers know your social class in the first seven words you say, study finds10 lessons from Benjamin Franklins daily schedule that will double your productivityThe worst mistakes you can make in an interview, according to 12 CEOs10 habits of mentally strong people