35 and negative savings

**disneysteve** · 11-05-2013, 10:04 AM

Originally posted by jungle123 View Post

$90k in student loans and have to pay another 50k for my wife's final year of study. I will have to put all of that on credit cards

Can you provide me some advice in terms of how much to spend on rent, cars etc. and what should be our savings target to play "catch-up" ? Thanks a lot

So come June 2014, you will have $140,000 in debt plus interest

I'd say the only "savings target" right now would be to have a little emergency fund of a couple thousand dollars. Other than that, you need to be living as cheaply as you possibly can and throw every penny at those credit card bills and tuition.

The good news is that you earn a lot of money. You take home in 6 months what the median household grosses in a year. Keep that in mind and aim to live on 50% of your take home. Use the other 50% to pay down the debt. Even without her working, you should be able to make a nice dent in the debt. Once she's working, you guys will be in great shape.

**bjl584** · 11-05-2013, 11:19 AM

First,
Stop gambling in the options market if you haven't done so already. Is this situation all a result of playing options? What does the rest of your budget look like?

I agree with Steve to live on the cheap and aggressively pay off your debts until you are above water. Once you are in the black you will be able to accumulate wealth fairly quickly with your income.

**bigdaddybus** · 11-05-2013, 11:33 AM

I agree with what the others have said.

This is the way I look at your situation.

You are 15 years into your adult life and you have between 90-140K in debt. You have some serious catching up to do.

The bright side is with a big income you can catch up rather quickly if you attack the debt, get serious about saving for retirement (catch up to where you should be for your age), and avoid the pitfall of assuming a $250,000 a yr paycheck means you are entitled to live a grand lifestyle and pay off the debt "eventually"

**kyoko** · 11-05-2013, 06:38 PM

Hi,

I also got hit on the market, so I feel your pain...

It seems like there are only two of you, I would definitely go for an one bedroom apartment with the lowest possible rent in the decent neighborhood.

You are making a good amount of money a month and your wife's career in future seems promising, but putting another 50k in the credit card for her tuition for next 20 months is a big expense ($2500/mo)! I would live as simple as possible and put all the money into savings (first, EF) and paying down the credit card, or saving up for her next tuition (so you don't have to use the credit card to pay for it unless you have some point system or something). Until her promising job comes to the reality, you would definitely want to simplify your life (but also don't forget to enjoy your life together - like doing something in not too expensive way, or treat yourselves once in a while).

Once your wife graduates school and makes good money, you can enhance your lifestyle. 20 months is not too long to sacrifice a little bit for the bright future.

**Jerry91** · 11-06-2013, 12:10 AM

You should formulate a budget which will help you in saving money and reducing your unnecessary expenses. As far as rental payments and car payments are concerned, it will depend upon the rent charged by the landlord and price of the car.

**snafu** · 11-08-2013, 05:45 AM

As you requested I too reviewed the information you provided and suggest a first step would be to examine your cash flow for the past 6 months. How much of your net income has gone to the typical categories like Rent [utilities/rental ins.], Food [groceries/restaurants/take-out], Transportation {car payments, operational/service/ins.], Personal care, Clothing, Debt Repayment, Entertainment.

Secondly, you and DW need to discuss what you're willing to sacrifice from now until DW graduates and secures employment. One of the fastest, effective cut backs is meal planning. Eating out costs at least double preparing meals at home and is much healthier as you determine ingredients and portions. Taking bagged lunch and coffee from home makes a big difference in spending. Planning travel to include errands saves time, money and has potential to reduce stress.

Enjoying inexpensive, local entertainment like going for a walk or going to a school concert or creating a romantic evening at home with meal, movie or spa can be great fun. Examine your insurance policies, cable/internet/cell phone/gym packages to ascertain if you use and value each aspect. Are there any services you would be willing to reduce/remove/cancel for the short term? What interest rate are you paying for credit cards or loans? Call and ask if they can be lowered since interest is at an all time low.

Do you use Gas Buddy or buy gas on the 'sale days? Do you price check and review on-line pricing before making purchases? Is shopping/buying planned or impulse/entertainment/reward?

What is your plan for the upcoming holiday season? Do you have a budget for entertainment, decor, gifts, travel to family, holiday?

Happy to help with budgeting, there are very experienced money saver folks who participate in these threads.

**kv968** · 11-09-2013, 04:02 AM

Beyond what everyone else said (which was spot on), realize that "slow and steady" wins the race. It sounds to me (via your losing 100% of savings more than once on options) like you're trying to hit a homerun.

Realize that staying focused and just chipping away at the debt will work over time and don't try and go for that "quick fix". It may feel as if its a waste and not doing anything in the beginning but just stick to a plan and you'll see it start to work out.

**jungle123** · 11-09-2013, 04:32 AM

I want to thank everybody for the valuable inputs ( not so much for the sarcarstic digs). I totally understand that I have been foolish with my money. We have always lived well within our means and continue to do so. If only, I hadnt tried to double and triple my money in a game that I dont know much about, we would have been fine.

But, lesson learned ( albeit the hard way). I will try to refrain from things that pain me and my family and will try to rebuild from this day on

Will keep you posted

thanks again

**kv968** · 11-09-2013, 04:55 AM

Originally posted by jungle123 View Post

I want to thank everybody for the valuable inputs ( not so much for the sarcarstic digs). I totally understand that I have been foolish with my money. We have always lived well within our means and continue to do so. If only, I hadnt tried to double and triple my money in a game that I dont know much about, we would have been fine.

But, lesson learned ( albeit the hard way). I will try to refrain from things that pain me and my family and will try to rebuild from this day on

Will keep you posted

thanks again

I hope that "sarcastic dig" wasn't aimed at my post. If so, I didn't mean to be sarcastic, condescending nor judgmental. Hell, I frequently swing for the fences with some of my trading. I was just trying to convey that getting a plan and sticking to it is the way to go even if it seems you're not making much progress in the beginning.

**psuicyde king** · 11-11-2013, 11:51 AM

Originally posted by jungle123 View Post

I want to thank everybody for the valuable inputs ( not so much for the sarcarstic digs). I totally understand that I have been foolish with my money. We have always lived well within our means and continue to do so. If only, I hadnt tried to double and triple my money in a game that I dont know much about, we would have been fine.

But, lesson learned ( albeit the hard way). I will try to refrain from things that pain me and my family and will try to rebuild from this day on

Will keep you posted

thanks again

The recognition you displayed here is a huge first step. We all learn in our own ways. Coming to place like this and asking for support and guidance shows that you have the right mind set. Take the advice these folks have given, and you'll be in great shape before you know it!

35 and negative savings