Personal Question S/O Debt..

ertopp · November 2011

How much debt do you have? Is it credit card debt, or student loan debt?

Currently FI and I have only 1 credit card which we use frequently. We used it to put some down payments on wedding things so we are currently paying that off - but it's not a huge balance.

We own our home and both of our vehicles. FI just started back to school and is getting grants to help pay but he had to take out small loans to help with books, etc. However, I have like 80,000$ in student loan debt. Embarrassed It makes me want to cry just thinking about it. I am only 23 and have been in school since I was 18. I know it's my fault overall, but I wish someone would have educated me better about student loans. When I started college I saw it as "free money" and took out the max like every semester for the first 2 years. I will graduate in May and luckily I have gotten grants to help me the last 2 semesters. ugh. I know I will be paying on them until the day I die.

OhSewCrafty · November 2011

I know that sounds like a huge amount of debt, but if you own your home and cars, you're ahead of the game in comparison to lots of other people who have mortgage AND student loan debt. :-) It'll pay off in the long run, hang in there!

Have you heard of Dave Ramsey? He has a lot of great ideas about relieving debt and taking charge of your debt. Its simple stuff, but genius.

ertopp · November 2011

OhSewCrafty:

I know that sounds like a huge amount of debt, but if you own your home and cars, you're ahead of the game in comparison to lots of other people who have mortgage AND student loan debt. :-) It'll pay off in the long run, hang in there!

Have you heard of Dave Ramsey? He has a lot of great ideas about relieving debt and taking charge of your debt. Its simple stuff, but genius.

I haven't heard of him until I just read the earlier post about debt. I think I am going to look him up. I mean I see where we are now, FI works full time (but not a great job) and I am a SAHM. We are able to pay our bills, buy enough groceries every 2 weeks and still have a substantial amount of spending money. I keep saying we should start saving but it seems like something comes up. We have at least started a small savings account for DD. FI is back in school and when he is done in 2 years he will more than double what he makes now and by then I will be working too. So Im hoping we can pay my loans off sooner rather than later.

Jillibean85 · November 2011

ertopp:
OhSewCrafty:

I know that sounds like a huge amount of debt, but if you own your home and cars, you're ahead of the game in comparison to lots of other people who have mortgage AND student loan debt. :-) It'll pay off in the long run, hang in there!

Have you heard of Dave Ramsey? He has a lot of great ideas about relieving debt and taking charge of your debt. Its simple stuff, but genius.

I haven't heard of him until I just read the earlier post about debt. I think I am going to look him up. I mean I see where we are now, FI works full time (but not a great job) and I am a SAHM. We are able to pay our bills, buy enough groceries every 2 weeks and still have a substantial amount of spending money. I keep saying we should start saving but it seems like something comes up. We have at least started a small savings account for DD. FI is back in school and when he is done in 2 years he will more than double what he makes now and by then I will be working too. So Im hoping we can pay my loans off sooner rather than later.

Do you have a roth IRA or some other form of retirement savings? I would look into that sooner rather than later, if not... esspecially since you have a substantial amount of spending money left over. Never know where you'll be in 40 to 50 years from now, but hopefully retired if you start now!

ertopp · November 2011

haha, no we haven't even looked into that. Growing up is HARD lol. There is so much to think about. We JUST got life insurance for FI and now we are talking about how he needs health insurance. I am still on my moms insurance until we get married. Oy.

Jillibean85 · November 2011

ertopp:
haha, no we haven't even looked into that. Growing up is HARD lol. There is so much to think about. We JUST got life insurance for FI and now we are talking about how he needs health insurance. I am still on my moms insurance until we get married. Oy.

I agree! I could have never imagined... but even though it's stressful it's nice to lay your head down at night and know you're making it all work out (or at least trying to!) on your own...

ertopp · November 2011

Jillibean85:

ertopp:
haha, no we haven't even looked into that. Growing up is HARD lol. There is so much to think about. We JUST got life insurance for FI and now we are talking about how he needs health insurance. I am still on my moms insurance until we get married. Oy.

I agree! I could have never imagined... but even though it's stressful it's nice to lay your head down at night and know you're making it all work out (or at least trying to!) on your own...

Exactly! As stupid as it sounds, getting life insurance for the 3 of us really puts my mind at ease.

PrincessShay80 · November 2011

Dave Ramsey is really good for people who have a lot credit card debt, his financial peace university is all about getting an emergency fund the using the snowball method to pay off debt. Definitely check him out but because you don't have a lot of consumer debt he may not be the best for you. I would also check out Suze Ormond and David Bach- they both have great financial ideas.

I know it's overwhelming but you have to take it day by day. Student loan debt is tough because while the interest rates are usually low, compared to credit cards- there is no way to escape it, you can't file bankruptcy and have it discharged, but hopefully you can make good enough money when you graduate that you can pay more on them.

Honestly being so you need to be investing well and maxing out your retirement accounts it's amazing how much money you can have if invested correctly at a young age.

We had a lot of credit card debt a few years ago and it took about 3 years but we got it all paid back, now we are debt free with the exception of our homes and cars ( we spend way too much money on cars,but we like nice cars). I'm telling you 3 years ago the debt seems so large, but it was possible to pay back. we still have credit cards but we pay them in full every month.

Good luck!!!

diamondcks · November 2011

Sounds like you are on the right track!

I would also think about life insurance for yourself, while you don't have an income if something was to happen to you suddenly child care would get much more expensive for your FI.

I also agree that starting retirement savings now is important. You don't have to start with a lot, but keep increasing. For years DH and I would increase our retirement savings by adding half of all our raises to it.

As far as having lots of leftover spending money, that is great You just need to prioritize what to spend it on. We have a spread sheet that we track every single expense in. There are categories for our fixed expenses as well as everything we want to save for (house repairs, new car, vacations, etc) and more fun money categories (eating out, personal spending.

amykins1283 · November 2011

We only have the mortgage and my student loan debt. We paid off our cars last year and don't have any credit card debt currently.

hoping4sticky · November 2011

amykins1283:

We only have the mortgage and my student loan debt. We paid off our cars last year and don't have any credit card debt currently.

This, but I will add that I have a lot of student loan debt. Stupid lawschool.

smerka · November 2011

I'm older (38) and I can tell you from experience that the more you sock away now, the better off you'll be. So while you want to do right by your child, don't put money in a savings account for her (except the gifts she gets of course) until you max out retirement savings. That's $10,000 a year in Roth IRAs for you and FI. She'll appreciate not having to worry about supporting you when you're old.

And if you are doing your taxes yourself, I recommend seeing a professional to make sure you are getting all the tax credits due to you - student loan interest deduction, tution credits, mortgage deductions, child tax credits, etc. Then bank any refund you get.

Just asking these questions and thinking about this stuff puts you ahead of your peers.

mrsseguin · November 2011

We have quite a bit of debt as well...a bit less than you. We are working hard at paying it off. We will have it paid off in about 5 years. We follow what Dave Ramsey says, although not to the radical extent he does in his book. It is a good plan, and it's doable. Just a lot of focus and determination.

Ardmhs83 · November 2011

We have one major credit card that has like $1,700 on it and a Lowes card w/ about $700 on it. Those are high b/c we finished our basement and added a new bathroom last year. We also have our mortgage, DH's student loans and our two cars. One car will be paid off next year and the other in two years. My husband is in the process of getting his master's degree in administration. He will be a school principal in a couple of years. When he graduates we will have to start paying on his student loan. Thank God he will be making a lot more, so we will be able to make bigger payments on things then. I have a college degree, but no loans...my parents paid for all of it, I'm very thankful for that.

I do stress out about the CC dept though...we make payments every month, but we can't afford to do huge payments. We are both school teachers. I guess we will have to wait until cars are paid off and DH is making more to make bigger payments. I know what you mean though...I feel like we will always have some kind of dept and be paying things until the day we die....totally sucks!

volterre · November 2011

I disagree with the previous poster commenting that Dave Ramsey is only good for certain types of debt. He has a common sense approach to how you handle money so it works for everyone. I have been a Dave Ramsey follower for years and he has got my butt out all sorts of debt. Since you SAH, have you thought about making crafts to bring in some more money?

RedWingsFan · November 2011

We just paid off our last credit card balance, but we have a mortgage, my car, and both of our student loans. Our loans by themselves are almost 300K because we both went to law school. We'll be paying those off for the next 22 years or so...ugh.

We have savings, 401k plans for our jobs, and have started the 529 plans for the twins - we put money into those automatically each month and then any money they receive from family gets put in there too around their birthday.

I know it's hard, but it really sounds like you guys are in a pretty good place right now financially.

kmwills · November 2011

We have a mortgage ($111,000), DH's law school loans (about $70,000), and about $6,000 in combined credit card debt. Our cars are paid off. DH is self-employed, so during the slow months, the CC bills ramp up. But then in a good month, we can pay them all off.

aocain02@yahoo.com · November 2011

Our only debt is our mortgage. We only have 26 more years of paying that off. We were over paying but really see no point now since we can't refinance and probably won't ever be able to, until home values increase so that extra money is going to savings.

Kitiara5512 · November 2011

I have half as much in credit card debt as I do in student loans. I should work harder to pay them off, and do pay over the minimum amount. I have paid off three of the accounts with lower amounts on them so far this year, but now the other remaining cards have about 12k on them together, and thats harder to do because their interest rates also suck.