First time Budgeting -- New College Graduate, Significant Student Loans

[sagremus]

Hello all! My name is Sagremus and this is my first post, and my first attempt at budgeting. I am not good with money and not very disciplined when it comes to spending. I have also made some significant and costly mistakes, which I will discuss in a little bit. I'm looking for some advice and a realistic perspective on my situation.

First, here is some background information. I am graduating from college in a few weeks with a bachelor's degree in nursing. I have recently found full time employment, although the job is in limbo until I officially graduate. My significant mistake was student loans. I have $30,000 in federal student loans (both subsidized and unsubsidized) and $31,000 in private student debt that has accured $10,000 in interest over five years. I also have a federal nursing loan for $2,500. Therefore, my total debt is in the ballpark of $75,000.

At my future employer, I will make roughly $42,000 a year without taxes and not including benefits (which do not take effect until the probation period is up). I live in an apartment with my long-term partner, who makes roughly $30,000 a year. We will be married in the next few years. He has offered to help me with living expenses, however I will NOT burden him with my debt. Therefore, I would like to make payments and manage my money as independently as possible.

One of my goals is to purchase a house after I have paid off my private student loans. I would like to eliminate the private loans within 5-8 years. I will also need to purchase a new car soon, as mine is 15 years old and in very poor shape. I have written a budget below. Do you believe I will be able to manage the debt, and if so, will I be able to meet my own repayment goals in time?

BUDGET:
Gross Income before taxes: $42,000
Rent: $384.50/month (split between myself and my partner)
Renter's Insurance: $16.50/month
Electricity/Gas: $20/month (split between myself and my partner)
Phone: $0/month (currently on a plan with my parents and siblings)
Internet: $17.50/month (split between myself and my partner)
Car Payment: $0/month (car is paid off, however will need a new one within 6 months)
Car Insurance: $0/month (parents agree to pay this until I have been in my job for 6 months)
Gas: $60/month (do not drive much)
Health Insurance: $0/month (under my parents plan until I am eligible through my employer)
Dental Insurance: $0/month (do not have)
Medications: $50/month
Groceries: $200/month
Eating Out: $150/month (need to cut back majorly)
Clothing: $0/month
Hygiene: $60/month (quarters for laundromat, laundry soap, dish soap, toothbrush, etc)
Malpractice Insurance: $9/month
Entertainment: $100/month
Cat's Food/Supplies: $50/month
Vet Bills: $20/month (1 cat has chronic health problem)
Gym: $20/month

This is what my budget looks like now. Here are my debts:
Federal Student Loan: $30,000
Private Student Loan: $41,500
Nursing Loan: $2,500



Thank you for your time and any advice you are able to provide! I am also going to meet with a free financial advisor soon to discuss my situation, but I would like other opinions as well.

[ecoadapt]

The most effective way to pay off debt is to list your debts smallest to largest. Make minimum payments on all but the smallest debt and throw as much money as possible at the smallest debt to pay if off as quickly as possible. Once that is paid off, take the money that you were throwing at the smallest debt, add it to the minimum payment of the next smallest debt and pay that off as quickly as possible. This is called the debt snowball and is very effective.

artwest has good point stated there. It will help you a lot doing this debt snowball. It's also a good idea, paying off the smallest loan 1st.

[auron]

Above is good advice, but I will like to interject something. The debt snowball method is meant for mental motivation while paying down debt but is most definitely not always the cheapest way.

If you find yourself easily sticking to your debt repayment plan (both budget & motivation wise), I would suggest paying all your minimums and extra debt repayment money going to the highest interest rate loan/CC. This will result in shortest (and least interest $) payback period.

P.S. absolutely make sure you have at least a couple months of living expenses as an emergency fund before you pay extra on your loans.

Good luck!

[BudgetSurgeon]

Congrats on graduating and obtaining employment!

Listen, one thing to add here: you owe fairly considerable amounts on your education, and I would NOT incur any more debt (read mortgage), until your student loans are paid off fully. I am a big believer in keeping debt to a minimum, and you do not want to incur MORE debt, when you have a fairly large sum to payback. Pay off your existing loans as fast as you can, and when you are debt free, then and only then, consider taking out a mortgage. Don't bury yourself totally from the outset. Just IMO.

[JBlock]

Bright advises. But how can you properly address the difficulty in looking for a good job today? Many still has no jobs and many other losing their jobs.