Last week as I was doing a little financial planning for myself I realized something.  If it wasn't for the student loans that I had to take out to pay for college, I probably wouldn't be as financially literate as I currently am.  It's a funny thing to really ponder, but sticking your neck out really can have its rewards.  I used to think of the student loans I have as a burden.  And in the short term, they are a burden as they bind up a lot of cash that I could be investing or saving elsewhere.  But the lessons and tools that I've come across as a result of me going into student loan debt have been invaluable.

One of the most basic but also most fundamental lessons I have been taught as a product of having to take out a loan is the idea of interest.  Interest can either work for you or against you, and sometimes it's really easy to overlook the importance of this concept.  I know with my loans that the lending company will be making a pretty penny when all is said and done, but the lesson of how interest affects debts and investments is much more complex.  Realizing how much interest affects a sum of money has taught me that investing and saving actually do pay off.  It's tough to be so young and not have all the gadgets and technology that some of my friends have but I also realize that because of this important lesson I learned and because I have begun saving for retirement early, it will be much easier for me to reach my retirement goals because the interest on my savings and investments will have more time to accumulate.  The earlier a person begins saving, the more they will theoretically have at retirement.  This concept is also true with debt, and I have learned a thing or two in that sector as well.

Credit cards are great tools in an emergency or time of opportunity.  But they can really hang you if you don't know what you're doing with them.  They make their money off of interest and if you don't pay them down quickly, the balances can add up extremely fast, almost seemingly exponentially.  Paying off the credit cards with the highest interest first is a huge key to success if you need to dig your way out of the debt hole.  Just like with saving and investing, interest rates and timelines are very important with debt too.  The faster you pay off your high interest debts, the faster you can begin to save, and the more time your money has to grow before retirement.

I know that my student loans could be looked at as a real pain, but I have learn and realized more as a product of having these loans than I ever would have had I not taken them out in the first place.  Or, at least I'm learning these lessons more quickly because I've had to deal with large sums of money and things like interest.  Perhaps I would have never really learned to discipline myself financially had I not had my loans, and I could hypothetically be in an even worse position debt wise.  Student loans aren't so bad when you think about it.