Help!!

[Desperate1]

I recently realized the insane amount of debt I am in and need help. I knew that I had a lot of student loans, but I did not realize that they added up to over 80,000.. That includes federal and private. I graduate in August and I have at least 6 months forbearance on each loan.
I quit my job in November because of the start of clinicals. I have clinicals 40 hours a week.
My husband makes approx. 60,000 a year (fluxuates).
Upon graduation and finding a job, I should have started out making around 60,000 a year also, but jobs in Radiation Therapy are apparently scarse and seem to mostly be only PRN positions. Although, worst case scenerio, I can probably get my old job back temporarily (making only around 15,000-20,000) but every little bit helps. Until I can get a good job or ideally an RT job.
Our house payment and other bills are approximately 2200 a month. This does not include groceries, and other living expenses.
We recently had to drain our savings to purchase a car because ours died on Thanksgiving. I have made more than the minimum payment on our 2 credit cards, so they will be paid off in a couple of months.
I also need to start saving for my daughters college fund. I do not know the best thing to do with our money. She is only 6 months old, but I want to start now so she does not have this problem...
I also need to come up with a budget for our family. We do not have much of a splerging issue, ours is more of a lot of small purchases adding up fast.

I feel completely overwhelmed and need a plan of action. We have worked really hard to get decent credit and would like to keep it that way. I would also like to have a plan before I tell him how much I actually owe..

I am desperate for any advice. Even if it is for only one of my dilemmas..

Thanks

[bjl584]

You should start by tracking your spending for one month to see exactly where all the money is going. It will be easier to make a budget if you know where the dollars are going. Can you post any more detail about your situation? Rate and amounts on credit cards? Retirement accounts and allocations if any? Any other debts or savings?

[snshijuptr]

For the moment don't worry about your daughter's college fund. For now the capital you are saving is the knowledge that when she goes to college she should keep an eye on the job market for any positions she is training for.

Your first step is to go talk to your college's career advisers. If you paid that much for school then you should have some sort of career assistance. USE IT! As a fellow student, I know too many people who graduate without utilizing these amazing services which you are paying for.

Your second step is to get a better picture of your cash flow in a month. Where are you spending your money? Track every penny spent by your household for a month. At the end of the month divide the money into categories. I recommend simple categories such as Needs, Wants, Savings. The usual goal is 50% Needs, 30% Wants, and 20% Savings. For someone in your situation I would switch that to 30% Savings/Debt and 20% Wants.

Your next step is to work on realigning your cash flow by identifying the areas of over spending in your life. If you post your detailed expenses/bills up here, people will give you ideas of areas and ways to cut.

Your fourth step is to prioritize your debt. Credit cards will most likely come first. Make sure you are paying the lowest interest rate possible on all your debts by calling each company. Also negotiate down your minimums especially on low interest rate debt. You can either order your debt by lowest to highest balance (most motivational) or from highest to lowest interest rate (quickest & cheapest repayment). Pay the minimum on all debts and send any extra to your highest priority debt. When you wipeout a debt, move the minimum payment and all overpayment to the next highest priority debt.

Once your debt is gone (or at least all high interest debt is gone), you can begin to build up your savings again. Make sure you are also saving enough for retirement.

Finally once you and your husband are back in good financial shape, you can start saving for your daughter's future. If you get your spending in line with your goals and work hard to repay your debt, you should be able to pay it off in only a few years. By then you will also have a clearer picture of your daughters academic interest and abilities and can better judge her college needs. Additionally if you include her in your families budget and savings efforts you will have taught her invaluable lessons about money, debt, and education.

[Desperate1]

We have 3 credit cards. One is already paid off but I pay the $40 annual fee to keep it. One had a $170 balance and I just paid it a week ago. I am going to cancel that one because it was just for babies r us. (We bought our daughters furniture with it). The last one has about $350 on it with an APR around 20% (cant find the actual paperwork right now). It was a secured card. We paid $400 to get it and we get that back eventually. (that is my husbands card and do not know much about it)
We also have a $89 payment for a vacuum (stupid I know) I can be gullible. I am not sure exactly how much we still owe on that but we have to pay for it for at least another year.
I did break down our monthly spendings once a while ago and realized we were spending way too much money eating out all the time. We have done better eating at home, but now we have a pretty high grocery bill.
Its hard to decide on a budget because one week he will make $1400 then the next he will make only $700. It depends on rain outs and how much overtime they give him.
Our bills are approx:
Mortgage $1,100 (payment, taxes, and ins)
Car ins $121.00
electric $150-250 (depending on month)
house phone and internet $105
cell phone $100 (we must have a house phone and cell phone because we live out of city limits and do not get cell phone recpetion at home..)
trash $42 bi monthly
We are paying on his student loans. He has 3. $50, $65, and $85. All loans have between 2000 and 4500 still owed (again paperwork is put up somewhere)
We have to pay for propane when needed. We owe about $400 to them by the end of the month. We just paid $400 last week. (we filled it up so hopefully it lasts awhile. We just moved in here in april so we are not very familiar on how fast propane is used at this house.)
We have well water and septic so no bills there. (Except the septic guy is supposed to come out soon to service it and it will cost $230)
We paid cash for our car so that we did not have a car payment, but it drained our savings. We only have about $300 now and about $500 in checking after paying bills ( but he gets paid today)
I have a balance of about $500 that I have to pay to my school by the end of the school year so that I can graduate.
I am pretty sure that is all of our bills unless I am forgetting one. Thank you for your help

[bjl584]

What is the amount of your mortgage and what is the term? 15yr, 30yr?

Do you know what your payment will be on your loans once they kick in?

[riverwed070707]

What's your take home pay? What about non-billed expenses? Groceries? Baby supplies? Day care since you both work/go to school? Hair cuts? Home maintenance? Gifts? What are you contributing to retirement and savings each month?

Just from what you posted, I come up with expenses totaling over $1800. I'm guessing take home is somewhere around $3000. I would use the time you have from now until your school loans come due to try and knock out any debt you have including his SLs. I also think you're going to find it hard to make ends meet with your loan payments if you don't either reduce spending or find more income.

[Desperate1]

Our mortgage is 30 year 4.75% interest rate. The loan amount is 121,000.
I am not sure what my student loan payments will be since I will have both federal and private.
What I listed before is our take home pay. Our health insurance, his pension and annuity is taken out already. I am not sure how much is saved through that though. As soon as my clinicals are over I will be getting a job. Either using my degree or elsewhere if needed. So we will have more income at least before my student loans start needing repayment.
We are lucky to have family watching our daughter for us. We only pay $30 a week.

[bjl584]

Our mortgage is 30 year 4.75% interest rate. The loan amount is 121,000.
I am not sure what my student loan payments will be since I will have both federal and private.
What I listed before is our take home pay. Our health insurance, his pension and annuity is taken out already. I am not sure how much is saved through that though. As soon as my clinicals are over I will be getting a job. Either using my degree or elsewhere if needed. So we will have more income at least before my student loans start needing repayment.
We are lucky to have family watching our daughter for us. We only pay $30 a week.

Your loan payments will be somewhere in the low 600's per month roughly, maybe more. You will definitely need to boost income and cut expenses. You will be hopefully finding work upon graduation, so that is good. As far as cutting expenses, that goes back to tracking your spending for a month to see where the money is going.

How much did you put down on your home?

[riverwed070707]

Our mortgage is 30 year 4.75% interest rate. The loan amount is 121,000.
I am not sure what my student loan payments will be since I will have both federal and private.
What I listed before is our take home pay. Our health insurance, his pension and annuity is taken out already. I am not sure how much is saved through that though. As soon as my clinicals are over I will be getting a job. Either using my degree or elsewhere if needed. So we will have more income at least before my student loans start needing repayment.
We are lucky to have family watching our daughter for us. We only pay $30 a week.

The bottom line that I'm gathering here is that you two have some serious communication issues, at least when it comes to finances. It's conerning to me that you have debt that you don't know the interest rate on, you don't know what you have saved toward retirement, and you haven't told your husband about the amount of debt you took on while in school. Why are you hiding it? Are you afraid he will be upset? How did he think school was getting paid for??

I think your first step in this case is sitting down together and just talking about finances. Then can you truly start to find a solution -- together. I would be if my DH came to me and said, "honey, I racked up $XX,XXX debt but don't worry I figured out how I'm going to pay for it" because the truth is, you are expecting him to help repay your debt and therefore he gets to be apart of the decision making in how to handle it. There isn't an easy answer if that's what you were looking for. It's going to be tough, especially up until you get a FT job, and you owe it to him to come forward with what lies in the road ahead.

[snshijuptr]

My recommendation is after you track your spending, you budget based on the lowest monthly income your husband has earned in the past 12 months. Then every time you earn above that, you can put the extra money toward your debt.

[Desperate1]

I am not looking for relationship advice, I am just looking for financial advice. We are not hiding anything from each other. He knows I have a lot of school loans and I have all of his pension/annuity paperwork in my files. I have not looked at the paperwork in awhile because he usually keeps track of that.

As for everyone else, thank you for your help. I needed a place to start and now I feel like I have that.

[maat55]

When I layed out my budget, I started with the basic needs(house payment, utilities, minimum food, no eating out, auto expenses and insurances). You need to find your lowest point possible to survive. You should go ahead and figure a six month budget, then one that includes your additional student loans.

If your current income is not enough to meet these basics, you need to start cutting something, sell some things and find temporary extra odd jobs. You need to find a way to have at least 1k savings for emergencies before paying off debts.

Personally, I would attempt to live on the basics while you are paying off consumer debts and then building the emergency fund to at least 3 months expenses.

I would look at his student loans as regular debt and pay them off after the CC's. You may want to knockout any small loans of yours or just consider them part of your house payment.

Once you have knocked out your debts(with exception to your bulk student loans) you should start setting aside at least 10% of your incomes into 401k matches and funding Roths.

Once these are established, you will need to consider establishing a car/consumer fund for cash purchases. Only after you have met all of your personal debts and established reasonable funds for consumer items will you start to consider college funds.

That last thing you need to do is get in the habit of borrowing to keep up with your wants and needs. Car payments and credit card balances are a sign of living beyond your means and off future earnings.

Hopefully, you can find margin to start paying off your student loans sooners, but do not neglect retirement and paying off your debts before building college funds. Try not to ever have to have a car payment. Never allow yourself to carry a balance on your credit cards. Car funds make great backups for dwindled emergency funds.

Good luck.

[Redraidernurse]

I am not looking for relationship advice, I am just looking for financial advice. We are not hiding anything from each other. He knows I have a lot of school loans and I have all of his pension/annuity paperwork in my files. I have not looked at the paperwork in awhile because he usually keeps track of that.

As for everyone else, thank you for your help. I needed a place to start and now I feel like I have that.

When you said "I would also like to have a plan before I tell him how much I actually owe.." that shows that you both need to sit down together SOON and lay it all on the line. Dig out all that paperwork in your files and lay it out of the table and formulate a game plan.

By the way, saving for your retirement comes before saving for your daughter's college education. There's no point in her having a nice college fund when she's 18 if you won't be attaining your retirement goals.

[Money Gal]

What is your degree in? Why aren't clinicals part of the full time school enrollment? Are you doing some sort of private school technical/medical related discipline?

While you are doing clinicals, I would suggest that you actively apply to all jobs in that discipline. What assistance does the school provide to help you find a placement?

For the Federal loans you can consolidate them and if you qualify, you can get an income based repayment plan (the payment goes up as your pay increases, but easier to start with when you are unsure what level of income you will have).

[photo]

We have worked really hard to get decent credit and would like to keep it that way.

(We bought our daughters furniture with it). The last one has about $350 on it with an APR around 20% (cant find the actual paperwork right now). It was a secured card. We paid $400 to get it and we get that back eventually. (that is my husbands card and do not know much about it)

Unfortunately, your credit is not good, which is why you had to pay to obtain a credit card.

I agree with the others that one of the first steps is to track every penny you spend, no matter how trivial the amount. Then, you can categorize those expenses into what is absolutely necessary and what is not. For the former category (absolutely necessary), you can look at options for reducing them. Little things can add up to make a big difference.