Reflections on losing 215 000 SEK when you're 27

Post date 2014-03-19
Category Writings

A fair warning to ye, brave reader on the internet. This is not a bite sized bit of advice, meant to be read and enjoyed in three minutes. Neither is it a unique, happy or even exciting story. It's just a small reflection on cheating, owning and selling a home at a hefty loss, losing your life savings in one stroke, and dealing with the consequences.

I wrote this piece to put the experience behind me, once and for all. See, today, after almost two years, I'm finally debt free. Here's how it went down.

The setup

My hand was shaking violently, my vision was blurry and my heart pounded so hard it was about to burst through my chest. I was scared, angry and for the first time in many, many years... I didn't know what to do.

In my hand was a cellphone. My girlfriend's cellphone, to be precise. I had picked it up so I could pack it - she was in the shower, and we were on our way to Budapest. I'd been working a lot lately, neglecting our relationship a bit, and the trip was meant to give us some much needed quality time.

Only I had her phone in my hand, and it just beeped. She got a text. It was displayed on the screen. It was from a guy I didn't know.

The text wasn't something a boyfriend would like to read. Certainly not when the boyfriend had just bought a house with his girlfriend. Texts of that sort tend to make you question the relationship you're in. And not in a "Hm, am I happy?" kind of way. Rather, it puts one in a "Wait, the person I thought I knew did what?" state of mind.

To be clear: the text talked about this guy's junk and my girlfriend's familiarity with said junk.

I punched the wall, then. It was June 2011 and the start of a long journey.

The emotions

We didn't get to Budapest that day. She broke down, crying. I punched some more walls, and cried. Sometime during the day our new fridge was delivered. We paid the guy, and then cried some more.

After all the crying came talking. Trying to figure out what had happened, and why. Trying to figure out what should happen. It was the hardest decision I'd made up to that point in my life, but together we decided to make it work. We had a house after all, and what about all our friends and the rest of our lives? We knew it was going to be hard and that it required a lot of work, but we could make it.

And this is where I learned my first lesson. I was angry. So, so very angry. While usually a level-headed and happy guy, I just couldn't let it go. I dwelt on it. Forever. Shut myself off from my girlfriend. She was the one who had done wrong, after all - it was her job to make it better again.

But I discovered that wasn't entirely true.

The feelings inside me evolved. Shifted from anger to resentment. For a year, I walked around angry. Didn't bother with our relationship. It was a slow, torturous year, for both of us. Obviously, it was doomed to fail.

It is never easy being cheated on. In fact - it sucks monkey balls. But when you make a decision to forgive, then really forgive. If you can't do that, then move on for both of your sakes.

The finances

After a long year we finally broke up, and with that came all the things we tried so hard to avoid. We had a home, after all.

Neither of us could afford owning it on our own, so our only option was selling it. Here's where it gets hairy and many more lessons are learned.

We had borrowed most of the money in order to buy it. The bank usually don't lend that much money, but my then girlfriend worked at a bank and pulled some strings. We got several loans - one short term that we intended to pay within a few years, and two others long term. We tied the interest rate on the long term loans in order to keep them predictable.

I remember being a bit apprehensive, but figured that this is what everyone does. I was also blissfully ignorant - self-chosen, since I didn't bother to learn about it - of what it meant if we wanted to pay the loans off early.

When you take a loan the bank expects to make a certain amount of profit as you pay the loan back. That's the interest part. If you pay your loans back early they lose money, since you wouldn't pay the interest. But, fortunately for them, they're covered. See, if you pay off the loan early you still have to pay a certain amount of money on top of that - the interest difference rate.

This is pretty obvious. But I didn't know about it. And it meant disaster when we had to sell the house.

To begin with, we had to sell our home at a loss. We bought it at a time when prices were high, paid too much even then (the bidding process was weird), and sold it when prices were low. That's about 100 000 SEK loss, not counting the (admittedly rather small) renovations we also paid for.

But the real damage came from the interest difference rate. Since we had loaned a lot of money figuring we would be living there for a long time, it wasn't small. I've forgotten the exact figure, but it was somewhere between 200 000 - 300 000.

Half of those debts were mine. The last of my savings went quickly, and I had to take a loan of roughly 140 000 SEK to cover what I couldn't. I tallied my total losses when I did my taxes, and they were somewhere around 215 000 SEK. That's about ยข24 306 or $33 807.

Lessons learned. Make sure you understand what it is you're doing. Don't agree to things that have the potential to devastate you - if you buy something you must have a good error margin.

The aftermath

Yesterday I finally payed back the last of that loan. Every month for the past two years I've used slightly more than 27% of my disposable income to get rid of the debt. I'm fortunate - I've a good job, and didn't have to burden my family. But it still feels like waking up after a long winter. It'll be awesome to build savings again, and splurge on a few things I've needed. A suit and a nice pair of shoes is pretty high on that list.

I still freak out sometimes when something weird happens in my relationship. Working on that. Nevertheless, a huge weight is off from my shoulders, and it feels like I can finally meet life on my own terms again. This post is the end of the journey that started with a punch in the wall, and the start of something entirely new.

And. It. Feels. Awesome.