Paying student loans

[adventure_woman]

Ugh....DH and I really need to start paying on/off our student loans. We have been forebearing them (I know...not really a good idea...but too late now). We owe a lot, and it is just DH working and I stay home with the girls. Any tips/hints/best way to get started?

(I can't/won't go back to work right now, we have made the family decision to have me watch the girls...maybe in 4-5 years when the littlest one is in school).

Oh, and neither one of us is in a field where if we work so many years we will get XX amount toward our loans.

 

[brymolmom]

Even though you guys want you to be there with the kids - there are still lots of ways for you to go back to work. I would suggest a part time gig in the evenings/weekends OR do child care in your home during the days. You can make a good amount this way WHILE staying home with your kids.

Only other thoughts would be to cancel cable, cell phone and vacations for awhile and just put any money that would have been put toward that to your loans.

Best of luck!

 

[DawnM]

I don't really know what forbearance entails so I can't comment on that, but does it increase your interest amount (has your interest been accruing during the time you haven't paid?)

The best you can do is work out a budget and start paying it. You may have to cut some things out of your budget for a while if you need to.

Dawn

 

[Crystal824]

DH and I owe a ton of student loans too. As much as I would love to stay home with our daughter for a couple of years, I have to work mostly because of our student loans if we didn't have those we could easily make it on DH's salary. Well, maybe not easily but we could do it. The student loans make it impossible.

I agree with the others if you can't work a full time job now because daycare doesn't make financial sense, I would try to get a p/t job (nights and weekends when DH could watch the kids) or a job at a daycare (many offer free childcare to workers). This extra cash could go toward the loans. Student loans will NEVER go away even if you file for bankruptcy.

 

[Natalie's Mommy]

Even though you guys want you to be there with the kids - there are still lots of ways for you to go back to work. I would suggest a part time gig in the evenings/weekends OR do child care in your home during the days.

i actually do both these. i work 1-2 nights a week at aerie (for the discount and the adult time) and watch a little girl 2-3 days a week. I've been at aerie for 3+ years and have had Grace since she was 3 months old and she is almost 2!

it can be done, and working opposite schdules will give your husband time to bond with his daughters with some one on one time (its amazing what daddy's can handle when they have to!)

 

[katie26]

You might want to look into income-based/income-sensitive repayment through your lender. I'm currently on an income-based repayment plan - which is a lifesaver, because without it, my monthly payments would be more than my rent. I'm not sure whether that makes long-term financial sense, though, because I do work in a field where my loans will be forgiven after 10 years of work in that field, so you should probably get more opinions on whether this is the best thing for you in the long run.

Good luck!

 

[tasha99]

You might want to look into income-based/income-sensitive repayment through your lender. I'm currently on an income-based repayment plan - which is a lifesaver, because without it, my monthly payments would be more than my rent. I'm not sure whether that makes long-term financial sense, though, because I do work in a field where my loans will be forgiven after 10 years of work in that field, so you should probably get more opinions on whether this is the best thing for you in the long run.

Good luck!

I was just going to suggest this. I also work in a field where the remainder will be forgiven after 10 years. Even those who don't work in such a field (govt or nonprofit) can have their loans forgiven after 25 years (I think). I think this is a great choice for people with big student loans, especially if they work for schools etc.

 

[kimberlym322]

Have you been making any payments or are they just sitting there saying I will start paying next month??? Intrest will still grow even if you are not paying on them.

Sometimes saying you don't want to do something and needing to do something is two diffrent things. I would say try to find a job and start paying the loans off. If you have not paying on them for awhile they can put a judgment on your DH and start taking the money out of his pay check until it is paid off (once that happens there is nothing you can do but deal with it). When they take the money out of your pay 9 times out of 10 it will not be for the min amount do each month it will be that payment plus more...so really they could take 200.00 a week out of DH pay check if they wanted. They can also take you state and federal tax money.

So I would say call and make better payment arrangements, get a job and start paying them off, skip christmas-vacations-the joys in life to start paying or see if you can get a personal loan that would have a cheaper monthly payment to pay them off. Not trying to be mean when I tell you this, but it could mess your childrens college loans up if you don't take care of them...sometimes the parents have to take the loans out for the child when they get to college. And to tell you the truth if is not fair to them that your choices now could keep them from getting an education the way you did.

I understand that you want to stay home with the kids for the next 5 years, but you have to look at what is best for the family to pay your bills...the bills out weigh the wants in life. Now if you are willing to give up 90% of the joys in your life...christmas, birthday gifts, trips, cell phones, cable, internet, house phone, new clothing/shoes, eatting the bare minium, and so on then stay home and pay the loans off with hubbys pay, other wise get a job and pay them off. Look at it this way...if you got a job for the christmas season (JC Pennys and Khols is look for seasonal help by the way) you could work full time at night and the weekends and put all that money on the student loans and nothing else and by the first of the year a good part of them would be paid off. Because it is a seasonal job then when you get laied off then you should be able to get some kind of unemployment to continue to pay on the loans.

Student Loans are not something to mess with, good luck!!!!

 

[indimom]

I'm with the others on this. There really are only two options here.
Spend less and put the extra toward the loans.
Or make more and put it toward the loans.

I totally understand wanting to be home with your kids. I gave up my college career and went into home day care so I could be with my kids and still bring in an income. My business has grown over the years to the point that I bring in almost half our family income now.

There are tons of places to find "extra" money within a family budget. Even if it's $5 here and there, it can add up. And if you are willing to get aggressive with it (like cutting out cable/satelite, dining out and vacations), the savings could be in the thousands.

When we needed to find extra money in the past to pay off some medical & credit card debts, these were the areas we chose to attack:

We didn't take vacations. At all.
We chose to maintain one vehicle instead of two (worked out fine with one stay at home parent).
We had no satelite/internet/cell phones (but kept the land line for emergencies).
We ate out once a month as a treat (and not at a pricey steak place).
We trimmed our grocery budget (goodbye pop and gatorade) and started to shop at the discount/bulk grocery store.
We chopped the gift-giving and Christmas budget. Dad and Mom didn't need gifts and I bought a lot of the kids things on yard sales and at Goodwill or clearance racks. (They didn't know the difference when they were little and since we didn't have television they were not inundated with commercials for the latest and greatest toys. Bonus!)
We kept our clothes buying to a minimum and only bought when we had a need. We gladly accepted hand-me-downs from cousins and friends.

You would be shocked how much money can be found within the budget when you get aggressive with it. We payed off thousands of debt in one year, and were amazed at how quickly we were able to accomplish this. We then decided to stay on the plan and pay off our car also. Another year later and it was gone too. It was worth it to have the stress out of our lives.

And this is part of the debt issue that I think gets neglected from time to time. It is like a breathe of fresh air to eliminate these stressors from your life. There is no way to describe it. But it is soooo worth the effort.

Take a long, hard look at your budget for things you can cut and how you might be able to bring in more income. Come up with a plan and stick with it. It's not a picnic in the park but it's not as bad as most people imagine either.
You won't regret it. I promise.

 

[Patience]

As someone else said, you either have to increase your income or decrease your expenses. Personally, I would take a hybrid approach. Try to find a part-time job (weekends only or weekends and some evenings) while also cutting spending. Minimal eating out and no table service restaurants on the rare occasion you eat out to eliminate tipping costs, no new clothes (consignment, thrift store and hand-me-down only for a while), no vacations, eliminate or trim the cable and phone plans, turn down the thermostat a bit this winter and/or use supplemental heat like wood fires or energy efficient space heaters to concentrate heat in the rooms you are using, use beauty schools or budget hair salons and/or streamline your hairstyle (a low maintenance cut and eliminating highlighting/lowlighting can really add up), control Christmas spending by eliminating or drastically reducing gift giving outside your immediate family and scaling back on Christmas and birthday gift giving between you and your husband and to your kids, using coupons and having a good list at the grocery store, consolidating trips around town to conserve gasoline, using your library for DVD's and books.

My number one tip for how to save money is this: stay home as much as possible and stay out the retail stores! It's sooooo easy to get bored and head to the mall or a store "just to look" and then you spend money on gas, a coffee, some gummies for the kids and a dress for the oldest because it was on such a good sale and then you are all hungry so, just this once, you'll eat lunch out, etc., etc., etc. Stay home or only go, with snacks for you and the kids on you, to places that do not require money (like the park or the library) and you'll be amazed how much money you end up not spending.

I have done all of these things at various points in my life so I know they work and can be done. They do, however, require discipline and they are not generally fun. Being in tons of debt, however, is even less fun.

Good luck! I hope you are able to get the loans paid off quickly.

 

[MrsPete]

Ugh....DH and I really need to start paying on/off our student loans. We have been forebearing them (I know...not really a good idea...but too late now). We owe a lot, and it is just DH working and I stay home with the girls. Any tips/hints/best way to get started?

(I can't/won't go back to work right now, we have made the family decision to have me watch the girls...maybe in 4-5 years when the littlest one is in school).

Oh, and neither one of us is in a field where if we work so many years we will get XX amount toward our loans.

You say you owe a lot, and it's growing every day -- interest is building up, even if you have a forbearance. You can't afford not to start paying on these monsters.

Even though you want to stay home, you really need to look at your budget and decide whether that's a reasonable choice. Yeah, I hear you: That's what you and your husband want, but none of us can have everything. You've already made the choice to take out the loans; that can't be un-done. Yesterday's choices determine what you can and can't do today.

You've received some good information here -- I liked that term hybrid approach; it implies that you're attacking the problem in multiple ways:

Consider an evening job or a kid-sitting job that'll allow you to stay home (and avoid day care costs), while still bringing in some money. And throw every penny towards debt repayment.

The suggestion to get rid of one car is also a good one. We had only one car for years, and when we were forced to add another, I was amazed at just how much it added to our budget. Right now we work in two different areas and work very different hours . . . but in the future, we hope to be able to go back to one car.

Next, consider your other biggies: Your own retirement and your kids' college funds. Women who stay home for years often "start late" with retirement savings, and if you're facing student loans, this may be even more true for you. And unless you want your kids to be in this same situation one day, it'd be wise to try to put away something for their education.

You have to ask yourself the hard questions: With these loans, can you afford to stay home? With your circumstances, are you working towards financial stability in all areas: Home ownership, saving for the kids' needs, saving for your retirement? You can do many things to save money -- buy used clothes, eat at home -- but will they be enough? Do you have life insurance and disability insurance? You're living too close to the edge not to be heavily insured.

 

[Patience]

You say you owe a lot, and it's growing every day -- interest is building up, even if you have a forbearance. You can't afford not to start paying on these monsters.

Even though you want to stay home, you really need to look at your budget and decide whether that's a reasonable choice. Yeah, I hear you: That's what you and your husband want, but none of us can have everything. You've already made the choice to take out the loans; that can't be un-done. Yesterday's choices determine what you can and can't do today.

You've received some good information here:

Consider an evening job or a kid-sitting job that'll allow you to stay home (and avoid day care costs), while still bringing in some money. And throw every penny towards debt repayment.

Next, consider your other biggies: Your own retirement and your kids' college funds. Women who stay home for years often "start late" with retirement savings, and if you're facing student loans, this may be even more true for you. And unless you want your kids to be in this same situation one day, it'd be wise to try to put away something for their education.

I completely agree with this. I do not want my daughters to struggle with years of student loan debt (my oldest starts college next year and we have planned for it since she was born) nor do I ever want them to have to bicker and/or struggle with the financial burden of what to do with me and my husband.

 

[MrsPete]

I completely agree with this. I do not want my daughters to struggle with years of student loan debt (my oldest starts college next year!) nor do I ever want them to have to bicker and/or struggle with the financial burden of what to do with me and my husband when we are elderly.

I think a great number of people think they have to "do everything for the kids", and they put off their own needs.

Paying off your debt so you can start taking care of your own retirement savings IS doing something for the kids. It excuses them from the need to care for you (financially at least) in your elderly years. I am fearful for our children's generation. I think they're going to work harder for less money -- I personally am working much harder than I did when I started my career; I thought it'd be easier as time went on. At least my girls won't have to divy up my electrical bill and grocery bill between themselves.

 

[RitaE]

There is nothing really all that magical about money. You have so much of it and then you decide where to put it. You can get more, but then you decide where to put that also. When you decide to put money in place A, then you don't have it to put in place B.

If you want to pay off the student loans, then you decide to pay the student loans instead of something else. You cut your food budget, you travel less (I see a 2011 cruise AND a 2011 WDW trip in your signature), you turn off cable tv and you use the library for internet and entertainment, you cut the food budget, you buy fewer clothes.

If you can't or won't cut further, then you have to get more money. Somebody gets a job, a second job, or a different job --- something to get more money.

I know I (and other people here) often get slammed for being rude, but I'm honestly not trying to be rude. It's just questions like these come up all the time and what people seem to be asking is "How can I keep everything in my life exactly the same, but get different results?" Well, you can't. It just doesn't work. If you want something to be different, then you have to change something.

 

[bear_mom]

I have to agree with the pp, you can't pay on your student loans, but you have taken two vacations this year?

Vacations are something we pay for AFTER all the necessities are taken care of - and that includes retirement and saving for dds college. We don't go into debt for vacation either.

I know what it is like to start out life heavily in debt - dh and I had a large combined student loan debt plus I had some larger credit card debt that dh and I had to pay off. I remember debating on buying a hammer at one point - get the cheap one or splurge on the nicer one that would last longer .

Emily

 

[Branabb]

If you have a local library nearby, I recommend checking out Total Money Makeover by Dave Ramsey. The guy speaks bluntly and some people take it personally, but his plan works.

I recommended the book to my brother two years ago when he was considering bankruptcy. His student loan debt was one major part of his debt. He will be out of debt sometime next year following the above debt reduction plan. You will have to sacrifice some things along the way, but they will come back to you threefold once you are out of debt.

Like Ramsey says in his book," You live like no one else now, so you can live like no one else later."

Getting out of debt is tough, but so worth it. I've been there; we all have been there at one time or another.

I frequent a great debt management forum. It's just a forum of people (mostly seasoned experts) that share advice and tips regarding all types of debt. You can PM me and I will send you the link if you are interested.

 

[StephMK]

You haven't mentioned if you are willing to work PT but I would suggest before/after school care if that is at all a possibility. The kids are older and more independent & it still gives you several hours mid-day free. Plus if you offer part time b/a care, even better. I made decent money when I just put a small ad out. I fed them breakfast, they played & I took them all to school. Reverse in the pm except that one family was AM care only. It was nice and gave some playtime for my own kids.

I would also suggest looking at all of your bills and calling for discounts/lower rates on everything - TV, insurance, cell, phone, etc. Then put that savings towards your loans.

 

[adventure_woman]

OP here. I have read Dave Ramsey, and actually we paid off our van almost 2 years early and the only CC debt we have is what we just put on this spring for our new furnace (will be paid off very soon). We paid for my DHs used truck with cash. We live in a very modest (small/older) home, neither DH nor I ever get new clothes, I try to buy everything for my DDs at garage sales, I cloth diaper to save money, we don't have fancy cable/cell phones/TVs/computers/etc. We don't go out to eat that often and when we do it is always a place where we have coupons. I believe we are very good with our money. I did have a PT job when my DH got out of work but I was downsized due to the economy. I would watch a little person or so but right now there is no one around me that I can watch!

Vacations are the only thing I/we splurge on. We NEVER go in debt on our vacations - cash only! It was a girls only very budget trip to WDW, and that was paid for with gift money from my dad that I had been saving for for years and with gift money for them. I know it is against Dave Ramsey, but I have lost a very close family member to me and I do still live life w/o regrets - meaning that I don't go into debt for vacations, but if something were to happen to my girls tomorrow - I wouldn't be wishing - I wish I would have paid off my student loans a year sooner. So, besides the student loans, we are doing very well.

Just looking at our student loans is so daunting/overwhelming - and I was just looking for some encouragement that it is possible! (also - they are totally up to date and still in good standing).

 

[Marionnette]

OP here. I have read Dave Ramsey, and actually we paid off our van almost 2 years early and the only CC debt we have is what we just put on this spring for our new furnace (will be paid off very soon). We paid for my DHs used truck with cash. We live in a very modest (small/older) home, neither DH nor I ever get new clothes, I try to buy everything for my DDs at garage sales, I cloth diaper to save money, we don't have fancy cable/cell phones/TVs/computers/etc. We don't go out to eat that often and when we do it is always a place where we have coupons. I believe we are very good with our money. I did have a PT job when my DH got out of work but I was downsized due to the economy. I would watch a little person or so but right now there is no one around me that I can watch!

Vacations are the only thing I/we splurge on. We NEVER go in debt on our vacations - cash only! It was a girls only very budget trip to WDW, and that was paid for with gift money from my dad that I had been saving for for years and with gift money for them. I know it is against Dave Ramsey, but I have lost a very close family member to me and I do still live life w/o regrets - meaning that I don't go into debt for vacations, but if something were to happen to my girls tomorrow - I wouldn't be wishing - I wish I would have paid off my student loans a year sooner. So, besides the student loans, we are doing very well.

Just looking at our student loans is so daunting/overwhelming - and I was just looking for some encouragement that it is possible! (also - they are totally up to date and still in good standing).

You need to make paying off those student loans a priority. Vacation splurges are not within your budget. While you're cruising with the girls, that loan interest is adding up. When you're riding Dumbo and creating pixie dust memories, the debt clock is ticking away.

It sounds as if you live frugally in other aspects of your life. So I will repeat what others have already said: you need to increase your income by getting a part time job. Ignoring the loans, regardless of how daunting, is not doing anyone any good. That includes your little ones.

 

[Sammy]

Don't want to hijack the thread, but can someone explain the "student loan forgiveness if you work for 10 years..." mentioned in a previous post? Something about working for a non profit?