HELP!I'm pouring my heart out here, need advice!*Updated 6/12/07*

[pearlieq]

Question for Anyone

Back to the loan, i wish I could get him to file bankrupty (sp?) on the loan but I know you can't on student loans... someone got a lottery ticket I can borrow, AND YES it has to be a winning one!

I've got to admit I don't get this. That student loan is a valid debt. He took the funds, used the service (education) and now doesn't want to pay it back? Tough beans!

Bankruptcy is not a way to shirk responsibility for a loan you don't find convenient.

 

[McKelly]

I am a "shopper" too, a trip to WalMart for Milk turns into a $50-75 purchase. So, I recognized this and talked to my DH about it and told him if I stay out of the stores I can't spend so much. He does NOT like having to stop and get milk/bread/misc after work, BUT we probably save $200.00 a month, I am not kidding!! You said your husband is gone a lot, so it might not work, but think "Out of sight, out of mind!" Avoid stores except for necessities.

 

[dvcgirl]

This is a very common way of thinking but it gets lots of people in trouble financially. People think because they have a certain job or work in a certain area, they need to live a certain way, whether they can afford it or not. There is sometimes a certain degree of truth to this in the business world, but not nearly as much as people think.

I'm a physician, something generally considered to be an upscale prestigious occupation. Most of my professional peers live far more upscale lives than me. They drive Mercedes, BMW, Lexus and get new ones every 2-3 years. I drive a Toyota that I bought used 7 years ago and plan to keep for 4 more years or so. They live on the other end of town in stately gated communities where their neighbors are other doctors, lawyers, executives. I bought on the side of town in a 40 year old neighborhood where my neighbors work for the electric company, car dealers, airlines, small businesses. They send their kids to private school. Our DD goes to public school. Their wives go to the salon weekly to have their hair and nails done. My DW cuts her own hair and doesn't get manicures. They go to WDW and stay at the Grand Floridian. We go and stay at a rental condo through SkyAuction. I could go on and on.

The point is this. I am just as successful in my profession as they are. I just have made a conscious decision that we don't need to keep up with the Joneses just because I'm a doctor. Now who do you think will have the bigger retirement account in 20 years when I'm ready to call it quits and enjoy life and they are still putting in 60 hour weeks? I'll stick with living below my means. If it means I'll never get elected as president of the medical society, well so be it.

This is a great post Steve. And it's so true. My DH got up to the exec level in a large software company at a fairly young age. It was at that time that we got our big break in our early life....big influx of stock option money. And well, we did what we thought we were supposed to do. Built the big fancy house in the gated exclusive neighborhood. Got the fancy cars, the yard man, the cleaning people.... And we hated it. It wasn't us. We had our parents as great models for saving and being frugal and yet neither set of parents had experience with the kind of money we were making by then. And we just didn't know how to behave. We learned quickly that because we were suddenly much wealthier that we didn't need to *spend* more. Within four years, we sold the house (and doubled our money), sold the BMW and purchased a Toyota Highlander, and moved to Orlando and bought a smaller house.

The difference between us and the OP is that even though we were spending more back in those days, we were still not living beyond our means. We never had any debt....and yet, we still didn't like this "other" life. We tried to assimilate into these people in the fancy neighborhood, and we just felt like there was so much focus on *stuff* and *things*. We hated it. Now don't get me wrong, we like to shop every now and then....we love to travel and do so fairly often, but we always look for deals. We cut our own lawn now (a big no-no in the old neighborhood), we clean the house....and we save and invest well over 50% of our gross income each year. Trust me when I say that nobody in that old neighborhood can save like that. Not with the insane amount of money they spend. No way.

And so I agree, this..."oh, I need to spend lots on my clothes...." or "I have to drive a certain kind of car for my job..." it's all BS with a capital B.

 

[canwegosoon]

The reason why I posted my comment was because sometimes people do not realize what a larger income(in certain jobs) brings. We are very frugal, but since my DH was promoted to a VP at a very large company, I can no longer wash and iron his clothes (he does have a dress code where he works and he is required to wear a suit, which requires dry cleaning). I used to also wash and iron his shirts, but again they weren't coming out finished enough for meetings with CEO's. He has weekly meetings at Country Clubs...trust me I wish it wasn't part of the job. He is also expected to take out his management team occasionally on his dime (not the company's). We are also expected to make certain donations to his company. I used to cut his hair, it was not a great job, but when he was a manager it did not matter. Until recently my dh drove a 10+yo nissan...whis was in ok shape (paint was shot, need some engine work, and the interior was totally faded). Useable yes, but not to drive a CEO and CIO around in(they do car pool to certain meetings and off site confrences and lunches). SO we went with a new (used) car on the upper end because we plan to have it for 10 years. Even though we try to live below our means, there are also expenses that unavoidable depending on your job.

Having said that, I still cut my children's hair, buy any needed clothes at 75% off, I go to the hairdresser 1-2 times a year, make what ever furnishings I can, do super couponing, can my on fruit off our own trees etc...I feel I am not one of those keeping up Jones kind of people. I wouldn't think most people that post to the budget board on a regular basis are.
To the OP still wishing you good luck in managing your new income.

 

[MrsPete]

The daycare expenses are temporary, in a year the oldest will be in kindergarten - diaper expenses will go shortly (hopefully) too....if they don't have more kids, the end is in sight.

This is true to some extent. I used to pay (years ago) 90-100/week in day care. When my kids started school I had to pay 45/week in before school care (we go to a late-start elementary school). Yes, it was a savings, but the expense didn't disappear. In fact, it's more per hour than day care was.

This is a very common way of thinking but it gets lots of people in trouble financially. People think because they have a certain job or work in a certain area, they need to live a certain way, whether they can afford it or not. There is sometimes a certain degree of truth to this in the business world, but not nearly as much as people think

I agree. My husband and I both work in professional jobs, and we "have less" than our co-workers. We have smaller wardrobes -- I don't think anyone's ever noticed; people are usually much more interested in their own attire than in other people's things. We drive used cars (both Fords). We own a nice house; though it's large and in a good neighborhood, it's not a stylish, fancy house. I just painted the den myself, and I just bought new curtains off the shelf at Penny's. Many of our co-workers own lake houses or beach houses -- we don't. I've never felt shunned in any way because we choose to be frugal.

Sure, some jobs have extra expenses, such as dry cleaning that someone mentioned, but we don't find that the necessary things add up to enough that it's an issue when compared to the professional salary. And, again, the great majority, are actually not required.

I've read all the posts and one thing I haven't seen mentioned is perhaps the OP needs to assess why she's a recreational shopper. She writes the DH travels alot, sometimes for weeks at a time. Could it be that she's using shopping as an "escape" from her life as "single" Mom? True, she is married but since DH travels so often she is basically raising their two kids by herself and perhaps a strain on their marriage is part of the reason for their debt. DH makes very good money especially for living in the rural Midwest but if she's unhappy and maybe even subconsciously resentful that he is gone all the time, it's going to be difficult for her to adjust her "spending mentality".

This is one of the most interesting posts in this thread. I think most people who are compulsive shoppers or over-spenders do it for emotional reasons -- not because they actually want the merchandise. It's a "reward", a way of "treating yourself" after a hard week's work. But people who spend emotionally often go overboard.

I've got to admit I don't get this. That student loan is a valid debt. He took the funds, used the service (education) and now doesn't want to pay it back? Tough beans!

Bankruptcy is not a way to shirk responsibility for a loan you don't find convenient.

This certainly bears repeating! When people overspend, then declare bankruptcy, WE ALL PAY!

One more comment, somehow I missed the original statement: To the person who's complaining about paying 100/month towards a loan and seeing only 4 go towards principal -- DUH! Didn't they teach us this in high school math? I know that's where I learned it. That's why you literally won't live long enough to pay off a sizeable credit card debt if you only make the minimum payment! Banks and credit card companies are not giving you loans to be nice; they're making money hand over fist! If you want to see the loan disappear in a hurry, you need to make an extra principle-payment every month.

 

[Jen D]

OP, I believe your situation is serious but manageable. Your main concern should be focusing intensely on wiping out that 30 grand in unsecured debt. If I were you I'd put any plans to move or buy new property on hold. You probably have not outgrown your house. Well, maybe you have, but you need to put any plan to move out on hold until you have the unsecured debt taken care of. Trust me, I know how you feel-- we live in a skinny two bedroom duplex and my 8 year old daughter shares a room with a 1 year old son, and they will continue to share a room for a few more years until we are ready to move. It's not ideal, but hey, they know that is the way it is! We have a kitchen eating area but no dining room, our bedroom is half cluttered office.. but we consider ourselves very lucky to live where we do! We're not moving until we can afford to own... and around here that means a huge downpayment, so we are still saving.

Also, your plan to sell the house and rent while you build... just don't forget, even if renting is cheap there, all that moving will cost money. Moving always costs. Staying put is much cheaper!

I just want to let you know you can fix this. We make a similar salary to you but we don't own, we rent (and pay more than your mortgage.) Five years ago we had credit card debt like you would not believe.... I mean really, we were one of those horror stories you read about in the newspaper. Much more than your debt (except the mortgage of course.) One day I just realized things had to change. We entered a debt management program that lowered my monthly interest rates and gave me one lump payment. In January I will be 100% debt free. Now it kills me to think about all the years we've paid on our debt when we could have been socking away house money... but now we're focused on the present and the future and despite the fact that I feel a little behind, not owning a house yet, I feel we are on the right track.

Debt management programs are a mixed bag... it isn't supposed to mess up your credit but it did for us, a little bit. We cancelled all our cards. Then we found we "needed" one for rental cars and "emergencies" and found we couldn't get one anymore. You know what? Best thing that happened to us, really. Because we all know about the so called credit card emergency... like buying plane tickets while the fare is low, or whatever. So we had no credit line. We had to learn to live with what we had. If we had to rent a car, we found one that took debit cards. Now our credit is fine and we do have a credit card we use for rewards... and pay it off every month, (actually I pay a couple times a week so I don't slip into bad habits.)

Something that helped me when we decided to shape up is just admitting we have no money to spend. Especially in NYC everyone spends, spends, travels, it is all consumption, all the time. I decided not to let my new frugality be a secret. When people asked us out to do things I said I didn't have the money. I made no secret of our penny pinching. It is very unfashionable to admit you can't afford something around here; most people are busy pretending they can afford the things they can't! I found it helped me to constantly admit I couldn't afford things. Probably tacky and made people uncomfortable, but it helped me remind myself not to pretend to be something I'm not.

About your Disney trips... I will say we took our very first Disney trip one year into our "new austerity." Previous family traveling had been haphazard and irresponsible, shoddily planned and often charged mostly on credit cards. After a few months of getting by on our new strict budget, I got the Disney itch. I thought, maybe if we do it right, plan way in advance, put a little away at a time, and get the whole thing paid off before leave, and budget and save properly for meals, etc. while we're there, we can make it work. And we did. It felt really great to enjoy our vacation without the credit guilt that had accompanied the indulgences we'd enjoyed in our "old life". Now if we had had "gazelle" intensity, that saved vacation money would have gone to pay off our debt that much faster... but I think for me, it helped to have something to look forward to. Now how this applies to your situation, I can't say... but maybe you can think postponing your trip(s) until you have made some real progress on changing your situation and habits?

I will say that while we had a seemingly unsurmountable debt, we have a few things going for us. Our rent isn't cheap, it is NYC after all, but it's hardly risen in 7 years (dream landlord.) What was once market rate is now almost a bargain. We don't own cars so don't have car payments, gas, auto insurance. (In fact sometimes when I am lamenting the horror of NYC rents I remember all the car expenses we'd have if we lived in the burbs.) DH is a journalist and I am a SAHM with a casual part-time job so we don't need to spend too much on clothes... we are "Gap" casual 98 percent of the time (actually more often "Old Navy" casual for me.) We don't have child care costs. Student loans were not too big, and we paid them off a few years ago.

We could do much better and save more. I'm still working on improving our habits and relapse occasionally. If I planned meals and shopped better I could drastically reduce the money we spend on quick food trips, take-out, etc.

Good luck. I really think if you can just put yourself on a program, keep a budget, and stick to it, you will be able to lick this. You just have to really want to do it. That's the hardest part.

 

[PaulaSue]

I hope you will use the great advice given. I love reading all the tips. I don't have my ducks in a row, yet, and I am always trying to better my family's well being.

I wanted to second Flylady and to declutter your house. I can only imagine what you home looks like if you are a shopper and already outgrown your home in 2 years. Maybe that is whay it has not sold yet. People want to see lots of space and if your's looks full already there is no reason for them to want to live there.

You were very brave to post and I hope all turns out well for you and your family!

 

[jlbower79]

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[Cindi0511]

I really do feel they should limit student loans... yes he is retarded for having it but I can blame him and them just as much and I'm sorry but bankruptcy is a way to go sometimes, it isn't just his life anymore, it's "our" life and it's "my" loan now and that's just how I feel about it.

Jaime

One way to look at this is if we are the people giving out the loans and other people just don't want to pay them back. Puts a whole different spin on it.

No one is entitled to anything, much to the horror of my generation. There seem to be two ways to get through college these days: save up and pay as you go or get a loan and PAY IT BACK. Bankruptcy is stealing for the most part. It's not the "get out of monetary jail free" card it has often been made out to be. And when I've seen people go through bankruptcy, they have not been honest with the court or creditors and hide assets so they don't have to give them up. There are legitimate reasons for declaring bankruptcy to be sure, but this is NOT one of them.

 

[aka-mad4themouse]

I believe the loan ppl should have a limit to how much $ they can sit there and give a student? I think it's really stupid of them to keep handing a guy 10000 every semester? I mean, I could understand and respect it if the stupid loan officers used their brains because "children" in college are not worried about stuff like that... sorry if it sounds harsh but having to pay back 30000 for only 3 years of college is RETARDED! It should never had been allowed to get that high... they should have a LIMIT! I mean he can't get a loan for anything now because of this HUGH loan, what good does all that education do anyone if they leave the school not able to move from one square to another because of this. I really do feel they should limit student loans... yes he is retarded for having it but I can blame him and them just as much and I'm sorry but bankruptcy is a way to go sometimes, it isn't just his life anymore, it's "our" life and it's "my" loan now and that's just how I feel about it.

Jaime

Student loans help millions of people acquire a college education when they otherwise could not afford one. There are thousand of doctors, teachers, research scientists and engineers who are contributing to society every day as a result of the opportunity that those "morons" at the student loan center provided. If your DH wasted his chance, then it's his fault and not the fault of the loan officers. They had no crystal ball that said he was going to drop out before getting his degree and they certainly had no idea that he wasn't the next Albert Schweitzer.

You married him for better or for worse. His debt is your debt. Just as you would have been the beneficiary of his earning power if he had created a successful career, so too are you responsible for his debt. Your resentment and anger are misdirected.

 

[MrsPete]

Student loans help millions of people acquire a college education when they otherwise could not afford one . . . Your resentment and anger are misdirected.

On one hand, I do think many people borrow much more in student loans than they should. I knew many people in college who lived in nicely furnished one-bedroom apartments, didn't work, went out every weekend . . . they had loans! I think if you NEED a loan, you should borrow JUST what you need: enough for a dorm room, books, etc. You shouldn't "live high on the hog" on borrowed money.

However, I don't think this is the fault of the loan officers. It's the fault of the college students who were too foolish to realize that they were spending their not-yet-earned entry level salary on that college apartment. As they'd be quick to point out, they're not children -- they're adults.

I don't agree with the other poster who says there are two ways to get through college: saving or borrowing. I did it differently: I worked like a dog during my college years, and I lived cheaply. At the worst, I shared a two-bedroom apartment with four other people (landlord didn't know, and it only worked because we all worked different shifts). Community college can also be less expensive. Many people have used the GI bill. There are other choices out there.

 

[Cindi0511]

I don't agree with the other poster who says there are two ways to get through college: saving or borrowing. I did it differently: I worked like a dog during my college years, and I lived cheaply. At the worst, I shared a two-bedroom apartment with four other people (landlord didn't know, and it only worked because we all worked different shifts). Community college can also be less expensive. Many people have used the GI bill. There are other choices out there.

Your point is valid and well taken. I should have just said "pay as you go" instead of save. I had to work my tail off, too, and it was worth every minute. If I had had to save up all of the required money beforehand, I never would have been able to do it. Thank you for clarifying what I intended to say in the first place.

 

[fac]

The reason why I posted my comment was because sometimes people do not realize what a larger income(in certain jobs) brings. We are very frugal, but since my DH was promoted to a VP at a very large company

I agree with you, but I think Steve also mentioned that there is a certain degree of truth in the business world.

 

[fac]

I'd have to do a lot more analysis, but my gut is different.

Buy the land. You've had your eye on it for years. Don't build on it now, but it isn't likely to depreciate. You'll regret not buying it.

I agree with this but I am a spender . But before you buy the land, will you give us an analysis on how to pay for the land ?

We need to take a look at the numbers. The cc debt is high, but with your total income and depends on your other expenses, it may be managable. Some people thought that you may not be able to rent a house even with your mortage payment, but we don't know for sure.

 

[jlbower79]

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[disneysteve]

The reason why I posted my comment was because sometimes people do not realize what a larger income(in certain jobs) brings.

Sorry if it sounded like I was disagreeing with you. I wasn't. There are absolutely personal and professional expenses that come along with higher income jobs, as you spelled out very clearly. Image matters a lot in business and maintaining a certain image costs money.

I was referring more to the people who use their professions as an excuse for their spending habits. They "need" to live in a certain neighborhood and "need" the big screen plasma TV and "need" to send their kids to a certain school and "need" to have a housekeeper and "need" to have their house professionally landscaped and "need" to vacation in certain places. And you know what - lots of those people are miserable and in debt because they aren't doing those things because they want them or like them or can afford them. They are doing them because they think they are supposed to have them. "I'm a doctor so my kids shouldn't go to public school." "I'm a Wall Street executive so we can't just vacation at the Jersey shore anymore." "I'm a CFO. My wife shouldn't be shopping at Target." You get the idea.

Certainly, we all need to do what our jobs demand. I just don't believe in the whole status symbol lifestyle that so many people fall into.

The one thing you mentioned that would drive me absolutely nuts, though, is the "expected" donations. I don't think anyone has the right to tell me what causes I should support or how generously I should support them. I'm glad that isn't a part of my job.

 

[PrincessKitty]

Question for Anyone

My husband has a 30,000 student loan debt... (i could had KILLED him when I saw this, especially considering he didn't even use those years of education for anything, we went back to a local college, paid out of pocket)... anyways we have already tried getting the interest lowered but they said it could'nt go any lower. He has it set up so the monthy note is based on his income... WELL he only owes 64 dollars a month... but the interest every month is 96 dollars... ALL I CAN AFFORD (because i just can't send them more money because it upsets me to think i'm sending 96 dollars worth of wasted working money to the government student loan morons).. I send them $100 dollars a month.. so that means his loan goes down 4 dollars a month.... FOUR DOLLARS A MONTH We will be paying this for the rest of our lives... we are renting but our rent is so high we could afford a house note. We just got aaproved for a loan (in my name) and now just lookin for a home but because of Hurricane Katrina we aren't having ANY luck but it's ok... I know it'll come someday.

Back to the loan, i wish I could get him to file bankrupty (sp?) on the loan but I know you can't on student loans... someone got a lottery ticket I can borrow, AND YES it has to be a winning one!

Jaime

$64 per month is peanuts. I am extremely grateful DH and I were able to borrow $40000 to go to school, otherwise we would have never gone. Our loans will be paid off before we retire. We are simply happy we are able to afford to pay them back. Our payments currently add up to around $350/month.

People need to take personal responsibility for the loans they take, rather than calling the government "morons" for loaning the money.

 

[jlbower79]

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[fac]

All I did was make a comment about something and you guys just attack me like it's wrong to have my own opinions about "something" and not "someone"... you guys are being quite harsh towards me and I haven't said anything mean to anyone of you.

I understand what you said, not that I totally agree. Haven't many of us complained the credit card companies for inviting college students to apply for credit cards? To a certain extend, people should be responsible for their actions, but on the other hand, there are temptation that our kids do not need. Your point was that your DH didn't even borrow the money for a good education.

 

[dvcgirl]

The reason why I posted my comment was because sometimes people do not realize what a larger income(in certain jobs) brings. We are very frugal, but since my DH was promoted to a VP at a very large company, I can no longer wash and iron his clothes (he does have a dress code where he works and he is required to wear a suit, which requires dry cleaning). I used to also wash and iron his shirts, but again they weren't coming out finished enough for meetings with CEO's. He has weekly meetings at Country Clubs...trust me I wish it wasn't part of the job. He is also expected to take out his management team occasionally on his dime (not the company's). We are also expected to make certain donations to his company. I used to cut his hair, it was not a great job, but when he was a manager it did not matter. Until recently my dh drove a 10+yo nissan...whis was in ok shape (paint was shot, need some engine work, and the interior was totally faded). Useable yes, but not to drive a CEO and CIO around in(they do car pool to certain meetings and off site confrences and lunches). SO we went with a new (used) car on the upper end because we plan to have it for 10 years. Even though we try to live below our means, there are also expenses that unavoidable depending on your job.

Having said that, I still cut my children's hair, buy any needed clothes at 75% off, I go to the hairdresser 1-2 times a year, make what ever furnishings I can, do super couponing, can my on fruit off our own trees etc...I feel I am not one of those keeping up Jones kind of people. I wouldn't think most people that post to the budget board on a regular basis are.
To the OP still wishing you good luck in managing your new income.

I understand what you are saying. And in certain fields it is true, but generally your income level is high enough that some dry cleaning and a BMW really isn't an issue. My DH has been at the VP level in the software industry and there's definitely a more casual business atmosphere. After the huge tech bubble burst there's even some pride taken in execs driving "regular" cars and not arriving to work in Maseratis like they did in the late 90s.

My older sister definitely has to keep up a certain appearance in her career. She's an exec VP in charge of acquisitions and mergers for a pharmaceutical company. She finally got rid of her 10 year old BMW for a newer, larger one and has had to really upgrade her wardrobe because she travels internationally so often. However, she also made 500,000 last year with her bonus, and so dry cleaning isn't exactly a problem. So, I think it depends on what your income level is. I think a lot of women in particular use their job/career as an excuse for a high end wardrobe. Yes, if you are in sales or deal with the public you need to look presentable and even fashionable. But you don't need to spend thousands and shop at Neiman Marcus in order to do that.

When we lived in the "executive neighborhood" a few years back, we definitely had some people in there who were making mega-bucks, but I'd say at least half were probably spending just about every cent that came in. And there was a *huge* keep-up-with-the Jones factor there. We went to birthday parties for toddlers in that neighborhood that rivaled some of the finest weddings we'd ever been to. It was insane.