Monday Monday$: Big Fat Pile of Debt

I like to think of myself as a fairly intelligent person. Feel free correct me if I am wrong. Though I was an English major, I have a well rounded education and seemed to excel in math up through high school. I know that negative numbers are "bad" and less than positive numbers. Heck, I think I learned that back in grade school. So how the h-e-l-l did I start 2010 with $-49,567.28? Yes, you read that correctly. I had $49,567.28 in the red as of January 2010, when I started actually paying attention to my own personal finances. I owed almost $50K to a variety of banks and financial organizations that willingly and happily loaned me money throughout my adult life, so long as I agreed to pay them back and then some with interest. This included a loan for my "house" (an Airstream trailer), student loans, a car loan and two credit cards. 

I thought I was living within my means. I had two credit cards with a combined available credit over of $20,000, so long as I didn't exceed my available credit and made my payments on time means I was doing pretty good! The interest rates were the lowest available and I always tried to pay extra when I could. My car loan was reasonable, I bought a cute brand new Honda Fit at the end of 2007, making sure the monthly payments were well below what I could afford so I'd never have any problems making them. The Airstream loan was reasonable too, I thought. I gave up my apartment and moved into it full time, the combined payments for the loan and the rent at the property where I parked it added up to slightly less than my rent at the old apartment. No problem there. Then there are the student loans. Everyone has student loans. How else do you go to school, especially a private one? Answer: Sallie Mae. We're pretty close now, she's been in my life for over 10 years and only made me start paying her back 6 months after I graduated from college. Not only that, but she only makes me pay $132.05 per month until the loans are paid off. This is less than I spend on groceries and so generous!  

As I read and learned more about personal finance last year, being the nerd that I am, I created a few spreadsheets to calculate how much I would actually pay on the loans versus the original amounts I borrowed. Please note, I did very simple math and multiplied my monthly payment times the number of months in the terms of the loan. I realize there are probably more complicated exact calculations involving interest and integers and cosines or something, but remember I am an English Lit chick just starting to figure out this personal finance thing. This is what I discovered:

ARE YOU KIDDING ME?????!!!! I was going to end up paying OVER $14K MORE than I originally borrowed????!!!! I could buy another new car for that! I could take an extended trip to Europe or Asia or anywhere I wanted for that!!! I started sweating, cursing and threw a little fit by myself when I first saw those numbers. I know how to multiply, divide and add things up. How did I not calculate the ACTUAL amount I would be paying instead of just worrying about the original loan amount and the monthly payments? And to think, this doesn't even include my credit cards, which I am not going to get into today. My blood pressure still rises when I look at that chart. Ugh, ugh, UGH! What the hell was I going to do?

To be continued next week...