What kind of debt do you have?

[minnie1928]

The only debt we have is our mortgage. 2 cars are paid off (2005 & a 2007) and student loans have long been paid off. I went to a local, private college where I could live at home. Went to school FT and worked FT so that my employer paid some of my college costs to get my Accounting Degree. 5 years of college = $10,000 student loan balance. I had that paid off pretty quickly. My DH didn't attend college (just a few courses here and there over the years) so no loans for him either.

 

[C.Ann]

None - and barring any huge medical crisis, I plan on keeping it that way..

 

[TnTWalter]

Hopefully with that much student loan debt you're going to be a Doc or something 6 figures.

Then I would NOT add any new debt. Period. Drive a clunker, RENT do not buy a home and ATTACK the debt. Treat it like it was credit cards car payments, etc..

If you make $100k, you could easily live on half and attack the debt....in 3-4 years you are DEBT FREE...

I don't care how low the interest rate is, debt is debt is debt....life is so much better when all the money you make goes to you [and of course charity].

I would highly recommend reading The Millionaire Next Door, STop Acting Rich and Financial Peace.

Oh and I am debt free baby! House and all.

Best of luck.
Trish

 

[DawnM]

BTDT, thankfully for us it did pay off. DH and I had very good and steady jobs out of grad school that allowed us to pay off the debt and we paid double starting with the first payment so that we could get rid of it!

We currently only have mortgage debt and plan to keep it that way. Our newest car is a 2004 and our oldest car is a 1996.

Dawn

 

[Robinrs]

Forgot to add- people take on student loans when they are at the worst age to make such a life changing decision. No 18 or 19 year old can buy a $100,000 car, but they can get student loans in that amount.

Most college students who take a $100,000 loan to finance a history degree or a degree in music or art (apologies to those who have that degree, but I hire people for a living, and you can't make any money with those degrees) have no idea how they have just changed their life, and not in a good way.

I also hire and I hire people with those degrees. It depends on the business. I'm in broadcasting, and yes, music and art can be a profession.

Being educated is not always for money, btw. It's to be educated.

 

[Robinrs]

Nearly 7 years removed . . . one word of advice . . . marry a doctor and have a tiny mortgage. Worked for me!
In all honesty, though, the legal market is horrible right now. Start networking, networking, networking. If you live in the midwest or are interested in working here, PM me.

Wow.... just wow.

 

[MEM]

At the moment, we have no debt at all. House is paid off, as is the car, our camper, our DVC contracts. I'm 51 and DH is 63 - he threw a ton of money at the mortgage while he was single and paid it off 18 years ago. Our car is a 1998 so I envision a car payment within the next few years. Also, DD will be in college in four years so money will be tight then.

 

[stout]

Send me an email as a couple of my law school classmates are practicing in your area. If you are interested in crossing state lines, I can put you in contact with many more. I am willing to help you out in any way that I can.

 

[JamesMom]

If you can swing it, buy a house as quickly as you can. Housing prices are still pretty low, but will move back up again. When that happens, you will be able to refinance and roll your student loans into your mortgage. That's what we did! We bought our house two years after graduating before the "bubble". Within 3 years, the housing prices started going up, and interest rates started coming down. We refinanced and rolled all of our student loans into the mortgage. It worked well for us, because at that time you could only tax deduct student loans for five years. Would something like that happen again? It all depends on where you move to! All I know is that if you buy smart, equity is a very nice thing!

Wow. Glad this worked for you but this plan would keep me up at night. By going this route you would lose a LOT of the flexibility of a student loan - low rates, changeable repayment plans, forebearance & defferments and potential forgiveness. For example, student loans are forgiven if you die. If rolled into the house, your estate would still owe the whole amount. Additionally, you could sign up for a couple of internet classes to put your loans in deferrement if money was tight for awhile or get a forebearance and make no payments if unemployed. I guess if you were looking for foreclose or go bankrupt this might work...

 

[Planogirl]

We have some medical debt left over but it will be paid off soon. It was enormous when this all started and this came after a series of layoffs so we did well. The important thing is to prepare for catastrophe if you can. You never know when something big might happen.

The student debt looks huge I'm sure but just consider it a part of life and a regular expense like utilities. If you break it down it might not seem so overwhelming.

 

[luvmy3]

Hopefully with that much student loan debt you're going to be a Doc or something 6 figures.

Then I would NOT add any new debt. Period. Drive a clunker, RENT do not buy a home and ATTACK the debt. Treat it like it was credit cards car payments, etc..

If you make $100k, you could easily live on half and attack the debt....in 3-4 years you are DEBT FREE...

I don't care how low the interest rate is, debt is debt is debt....life is so much better when all the money you make goes to you [and of course charity].

I would highly recommend reading The Millionaire Next Door, STop Acting Rich and Financial Peace.

Oh and I am debt free baby! House and all.

Best of luck.
Trish

I would add new debt in the form of a mortgage only because in my area renting an apartment is the equivelant of a mortgage payment, and then deduct your interest and build equity, instead of wrinting a rent check and get nothing. If you have to spend the money anyway you need to find a way where it can be advantageous to you. Of course that depends on many factors, but in some cases its okay to purchase a home.
I agree with everything else you said, the key to paying off debt is to make more than you spend, and put everything you can towards your debt. When dh was a grad student we lived CHEAP, and we doubled up on student loan payments, paid them off in less than half the expected time. To this day we drive older cars that are paid off, the only debt we have is our mortgage but we do an accelerated program, and we add extra to the principal every month, so in a few years we won't even have that.

 

[ssawka]

Wow. Glad this worked for you but this plan would keep me up at night. By going this route you would lose a LOT of the flexibility of a student loan - low rates, changeable repayment plans, forebearance & defferments and potential forgiveness. For example, student loans are forgiven if you die. If rolled into the house, your estate would still owe the whole amount. Additionally, you could sign up for a couple of internet classes to put your loans in deferrement if money was tight for awhile or get a forebearance and make no payments if unemployed. I guess if you were looking for foreclose or go bankrupt this might work...

Yes, it all depends on where you live. We are in the DC area and let's just say that even after the crash, my house is still worth more than twice what I paid for it. We also bought a very modest house, so even with refinancing, our mortgage payment is still half of what some of my coworkers' pay. Had we not rolled the student loans into the mortgage, we would not have some of the luxuries we did, the biggest of which was DW not having to work when DD was born.

The important thing is to be flexible when you are getting out of school. Be willing to move to an area with opportunity, even if it's far away from "home".

 

[luvmy3]

Wow.... just wow.

I was thinking the same thing but because marrying a doctor would just double the amount owed in student loans and put you in a higher tax bracket so you couldn't deduct interest

 

[bored]

Mortgage and that's all. Trying to pay it off quickly so I can say zero!

 

[Dismom55]

Other than utility bills we have only one credit card and it is ONLY for renting a car when driving to WDW. So right now, basically we have no debt.

 

[snoopyluvsdis]

We will have zero debt if I can get hubbie to agree to pay off our farm. He keeps thinking he might be able to buy some more farmland but the prices are sky high in central Wisconsin.

 

[Gr8t Fan]

Mortgage and that's all. Trying to pay it off quickly so I can say zero!

Ditto!

 

[ccgirl]

Starting Dave Ramsey in January. Until that time, I am an anomoly on this board. I was laid off twice in 18 months. We did not prepare before that. Stupidly thought I was "safe". Anyway, not having an emergency fund meant we were charging groceries. My in laws wanted us to sell the house and rent but the amount of rent would be what our mortgage once since we purchased so long ago. I still have student loans...about 10K, one car payment (for a 2006) that will be paid off within a year. Credit card debt would probably make most of the readers of this thread cringe. But....I have a plan and we are so much better off than we were. Anway, I would encourage anyone NOT NOT NOT NOT to use their house as a bank. I took out a home equity loan/home equity line for emergencies. Yeah...due to the low interest rate, I rolled things into it fully expecting to pay it off right away. Then, the layoffs came and they couldn't get paid off. We still have equity in our house, thank God but have rolled a disgusting amount into our mortgage.

As I said, starting in January we are really buckling down and we should be debt free (except for mortgage) within 3 years. Just in time to send DS to private school.

Ugh...that felt good to get off my chest.

 

[disykat]

I suggest getting a job and pretending you are still broke and a student and just putting everything you can toward the loan. When you have a house and kids and stuff- expenses can just happen to you sometimes.

I think this is absolutely key. I'm always amazed reading about young people going on fancy vacations, spending $100's of dollars on their friends bachelorette parties, etc. because that just wasn't what any of my acquaintances did. We all lived with roommates in apartments with hand me down furniture, dishes, etc. and paid off debt, while camping or piling into someone's grandma's cabin for our vacations. I had an absolute blast in my 20's, but at the same time was able to enter my 30's with no remaining school loans for me or dh and a recently acquired modest loan on a fixer starter home. While I had a few vacations here and there, I didn't really start vacationing yearly (other than cheap camping, visiting relatives, etc.), or buying new furniture or cars, etc. until into my 30's. I considered myself very fortunate when I met my dh that he was of the same mind and was paying off his debt ASAP as well.

I second all the "live as frugally as is feasible while paying down those loans!" advice. I kind of feel sorry for a generation that (it seems to me anyway) doesn't know the fun of frugal. I know my parents talk fondly about their frugal 20's as well.

There's something REALLY reassuring about knowing I'll be entering my 50's mortgage free, debt free, working to keep my kid's college loans minimal, and building my already healthy retirement funds. It may seem a long way off now, but that kind of security is worth some sacrifices.

 

[blanq]

DH and I do not have student loan debt; we are way too old for that (seriously, we are 48!) and it was paid off years ago. We do have other debt though: a mortgage and one vehicle payment.