Money for school - big change for our age

[pennygirl]

Hi everyone. Great perspective on this board. I need insight as my personal finance lean has always been frugal and quite frankly timid. Here's the question:

At 40, my husband supports our family: me and 3 kids (ages 3 and under)
Here's the breakdown of expenses and income:
salary: $90,000 (no bonus, some opportunity for overtime)/ $5k per month take home

monthly expenses:
mortgage: $1925
utilities and other "fixed expenses": $1800
food:$500
Out: $200
preschool: $300 (will be $700 next september)

We have no credit card debt and the car will be paid off in 3 years. The only debt we have is the house.

I am planning to go back to work next year and will probably make around $60k. At that income, I can afford 60% of our bills. Is it wise to take out a loan to cover an $80,000 nursing program plus an additional $40k for living expenses to a program that will bring his salary up to $140k - $160k? This is a full-time 2 yr program that will not allow him to work, though there are part time programs which may actually be more stressful for our family balance.

Does this add up or should we wait until the child care expense goes away and kids are in school? That would put him at 45. If it matters, my field is education at a university so free college tuition for my kids is a HUGE perk. I could earn more in corporate but I'm not willing to put in those hours anymore.

Happy to hear any insight.

[snafu]

What interest rate on mortgage and car loan? How much of each month's payment goes to mortgage principal? How much is paid in interest? How much of each car payment goes to principal and how much goes to interest? What value and type of program does DH have in place for retirement? Losing two years of contribution is a factor to consider.

I suggest, starting tomorrow June 4th] until December 4th, cut back spending in every category you control to reflect the reduction in income from $90K gross to $60K gross having worked out net [take-home]. You could start working out menu plans for inexpensive, nutritious, meals that you can prepare after a busy work day and hectic commute. How much can you reduce your Food spending? It's important to avoid the typical increase in costs caused by convenience foods and take out. What are you and DH willing to temporarily do without to accomplish this goal? Would you be willing to create a work wardrobe by shopping at charity stores? Can you outfit your quickly growing tykes with hand-me-downs + Goodwill excellent bargains?

I'd advise keeping borrowing for school as low as possible. The sums saved in the next 5 months could be added to regular car payment directly to principal or towards DH's tuition. It's really important as SL interest rates are quite high. They have potential to create a long term problem that affects every future decision.

[pennygirl]

school

interest on the mortgage is 3% and the car is 2%. We just bought it last year so not much of the principal is being paid down right now. We owe about $250k on it. We have a savings of $12,000. Between both of our 401ks we have nearly $200k. Honestly, we do keep our expenses pretty low...hand me downs, don't go out to eat often, i have all the work clothes I need already, etc. The big problem lately is that we just bought a home and we've been spending on items for it, which do add up. We are willing to cut anything we can including cable and some child care. One thing I've thought about is maintaining that lifestyle post graduation for 2 years and using my entire salary to pay back his loan. Is that reasonable? It sounds miserable but I'd be willing to do it so that at 45 we are able to be comfortable again.

[Redraidernurse]

Why are you paying for preschool if you are staying home with the kids? Could you do some 'preschool' activities at home and be saving that money every month?

I've read many articles recently on whether 'preschool' is really even necessary.

[riverwed070707]

Why are you paying for preschool if you are staying home with the kids? Could you do some 'preschool' activities at home and be saving that money every month?

I've read many articles recently on whether 'preschool' is really even necessary.

I'd never do this. My DH is SAH and DD goes to preschool also. Invaluable between the learning/social opportunities and the sanity of the at home parent. I would cut our own activities before giving up DDs schooling -- she likes it and its important to her and us.

Regarding whether to take the loans... IDK thats a lot of debt to take on for school at your age. Not saying it isn't doable but I wouldn't jump in as an all or nothing. Can you work toward being able to cover all of the bills so that only school has to be borrowed against and not living expenses? I'd keep exploring options to lessen the debt required.

[pennygirl]

Yeah, I am pretty firm on preschool. She loves it and it gives all of us some balance. Really I guess there are more options but none that are appealing to me: sell house and down grade or aggressively pay back loan when he is done with my salary. Or wait until we have more money.

[riverwed070707]

Yeah, I am pretty firm on preschool. She loves it and it gives all of us some balance. Really I guess there are more options but none that are appealing to me: sell house and down grade or aggressively pay back loan when he is done with my salary. Or wait until we have more money.

How long until the kids are in school? Could he do PT classes from now until then and then maybe only have to go FT once they are in school for maybe a year or so instead of 2? That could give you some flexiblity to pay as you go and also save up for the final FT leap. Since your combine salaries are so much more than your expenses, I think you have some opportunity to spread it out and not have to take on $120k in debt. Obvioulsy I don't know you, but if you are a frugal person, I think acquiring that much debt in such a short amount of time will be more stressful on you than you are anticipaing. Its easy to say you'll take your whole salary and pay it off in no time but that couple years of repayment can really weigh on you.

[Baby_nurse]

80k for a nursing program? Why on earth would you spend that much when there are more affordable programs available? Also, I've worked all over the US. No where does a new graduate nurse earn 140k out of the box. Average salary for a new nurse, even in specialty fields, runs about $25/hour. Some of the subspecialties such as a nurse anesthetist or an NP can earn over 6 figures, but those programs are significantly longer than 2 years.

[LivingAlmostLarge]

Is parttime or night school an option while working? That would make transitioning more feasible.

[pennygirl]

It's a grad program. He is already a nurse and in our Area, nurses start out higher. His program specializes in anesthesia so the average salary to start is minimum of $140k. I didn't just make that up. Anyway, the programs available are either cohort ex full time or part time so you can't start in one and move to another. He needs to pick a track.

[LivingAlmostLarge]

How long is the parttime program? Can you spread the cost out?

[Baby_nurse]

Thanks for explaining that its a grad program, that makes a difference. And it's funny that you said anesthesia, because that's one of the programs I listed.

Where is he working now? Does his employer offer tuition reimbursement? I have multiple co-workers who are enrolled part time in grad programs so they can work and take advantage of the tuition benefits my hospital offers.

Bottom line is, you can't support the family on your salary. I realize you want to work in the educational field for future tuition benefits for your kids, but the private sector is a better option for you at this point. The other option is to down size, down size, down size until your salary can support you all.

[Barclay]

Your husband cannot go to grad school at your college?

College profs here can get reduced tuition for all of their dependents including spouses.

I would be hesitant in borrowing for living expenses. Maybe he could work part time while going to school and contribute to the household expenses a bit.

It's great that you have no credit card debt but your salary is pretty low for the expenses you have. I would try and pay down the car loan a bit.

[snafu]

What changes would you be willing to try to facilitate DH's desire for a higher income by obtaining an anaesthetist designation? Is there any possibility that DH's employer would reimburse even part of the tuition? Would DH be willing to explore that idea with his employer?

While Corporate demands too much time, is there any employment that pays more than $ 60K for the two years DH is completing the course work? Since the tykes will not be of university age for 18 years, you could return to academia when they are 6 y/o. Perhaps DH could do limited part time work while in the program. Lots of students work PT, not nursing necessarily. Is there a program that joins moms and tots like home schooling for elementary and middle homeschoolers? $ 700. a month/$ 7,000. a school year is pretty steep for preschool. Are you willing to experiment with cutting expenses sufficiently so that your salary covered 'needs' with 'wants' set aside while DH is a student? The point is to limit borrowing to tuition and somehow manage day-to-day expenses with your income. If I understand your initial question, you planned to borrow $ 120,000. + forego $180,000. income total $300,000. at age 40. When you add in interest that's an albatross of payback for 20 years. If you experiment with cut backs you may find it easier than I imagine.

[cschin4]

I'm confused. He makes $90K and he wants to go to Nursing school? He isnt' going to make $90K as a nurse. Not sure what direction you are going with this. As for taking out more loans you should NOT take out any more loans than absolutely necessary unless you want to create a mountain of debt for yourselves.