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Okay, I'm not sure what I should do and how I can extricate myself from the situation I'm in.
Basic information: 28, male, single, no children, rent an apartment with a roommate, employed full-time with a $46,000 salary
I essentially made the mistake of living above my means, not saving enough, and taking on too many loans. As of August 2010, I was comfortably paying my monthly expenses and saving a bit of money. My only "debt" was my monthly car payment. However, I was very unhappy at work and started planning vacations and making purchases to "comfort" myself. That was obviously a big mistake, but I convinced myself that I deserved it because I was working a lot of overtime and easily netting $3200-3500 per month. Unfortunately, that overtime got cut in January and I'm back to earning a more modest salary. Oops. And now I'm even more unhappy, I don't feel like I can advance in my career field without further education, and the loans I took out are starting to cripple me.
Here is my debt profile: $1500 balance on credit card ($46 monthly minimum), $300 balance on credit card ($20 minimum), $3500 personal loan ($95 payment for next 36 months), $3300 balance on personal loan ($185 payment for next 24 months). I also have a $350 medical bill and a monthly car payment of $345 (24 months remaining). My credit score is 620.
I'm basically treading water with these payments and I feel suffocated by them. I'm still miserable at my job and decided that I wanted to pursue graduate school to at least give myself a chance at career advancement. I would attend full-time and need to take out up to $60,000 in student loans to cover cost of attendance. I would expect to work up to 20 hours per week. I realize that this may seem asinine given my predicament, but I feel trapped and like I don't have any good options. I really can't stay at my current job for much longer - I'm simply miserable - yet the prospect of incurring more debt scares me.
What can I do? If I take out federal loans and an additional private loan, I can potentially use the private loan to pay off my existing debt and actually be left with a lower monthly payment. I could then use the money I earn working part-time while in school to start paying the interest on the student loans. When I graduate, I'll be left with one payment that I can potentially stretch out over 15 or 20 years.
My other option is to postpone school until I pay off most or all my current debt. This would require me to suck it up at my job, live extremely frugally, and maybe get a part-time job. This option is perhaps most practical, but I'll be even more miserable. I'm not asking more anyone's sympathy. I was foolish and I created all of these problems. For now, though, I just want to start fixing them.
My other option is to postpone school until I pay off most or all my current debt. This would require me to suck it up at my job, live extremely frugally, and maybe get a part-time job. This option is perhaps most practical, but I'll be even more miserable. I'm not asking more anyone's sympathy. I was foolish and I created all of these problems. For now, though, I just want to start fixing them.
No where in the "rules of Life" were any of us guaranteed to never be miserable.
You made your bed, now suck it up and lay in it.
Get you loans paid off. Cut your expenses. End of discussion. Taking out more loans on top of what you already have is not the answer.
I assume your monthly take home pay is about $2700/mth?
You did not outline your monthly expenses:
rent
gas
food
misc (entertainment, etc)
Take your take home pay, minus monthly living expenses. What ever is left over needs to go on our debts. Make big lump payments and get them knocked out.
For instance, if you have an extra $400 remaining after all the bills and expenses are paid, drop it on the $300 credit card and $150 on that medical. Done, next month you now have $320 - drop it on the remaining $350 medical bill ($200 left), and you have $120 lump sum to put on something else. And so forth.
Its all fun and games until it comes time to pay the Piper. Hopefully, this is lesson learned.
I would not take on more debt in the hopes that it'll increase your pay. There are a lot of educated folks out there without jobs. My advice is to hunker down and pay of your current debts. Take on a 2nd job to quicken the process.
I understand the risk in taking on more debt for graduate school because it doesn't guarantee a substantially higher paying job, but I can absolutely tell you that I have ZERO chance of advancing far in my career field without an advanced degree.
Will your current job pay for any education? Some do.
I agree that taking on more debt for more education in the hopes of netting a better job isn't working out for most people these days. Unless the "more education" would pretty much guarantee you a job, I wouldn't do it.
Much of the population of the US is in survival mode right now. You do what you have to do to pay your bills and keep your head above water.
That doesn't mean you can't keep on the lookout for a job in a field you would like better. If you find one, great. If not, stay where you are until you do.
I understand the risk in taking on more debt for graduate school because it doesn't guarantee a substantially higher paying job, but I can absolutely tell you that I have ZERO chance of advancing far in my career field without an advanced degree.
But you already said you are miserable at work. Why would you stay in that career field? Most careers suffer from the "grass is greener" problem, from what I see. "I hate what I'm doing, but I would like what my supervisor is doing" then you get promoted and say the exact same thing, and so on. If you hate what you are doing, you would probably hate doing what your bosses are doing. You would just hate it with $60k more in debt.
all day Saturday (8), half a day on Sunday(5)
3 or 4 hours 3 or 4 evenings each week? (12)
25hrs per week @ $15/hr? $25/hr?
$10,000 / $20/hr = 500hrs / 25hr per week = 20 weeks.
Get to work.
Ha! If you can make $15/hr (let alone $20 or $25/hr) for an evening and weekend job, I'm assuming cost of living must be pretty high where you are... in my area, that is a good wage for a full time employee with a few years experience under their belt.
Do not quit your job in your current situation. Especially in this economy. Get a cheaper apartment, don't going out unless it is almost free...cancel cable, gym memberships, and all unneccesarry stuff. Live on rice and beans if you have to (I did it for almost a year in my late teens). You can hit the library for free DVD's, watch hulu or whatever. Bike/walk/bus to work to save gas $$$, play basketball or hike or something instead of TV or bar hopping. Keep in mind that this debt is temporary and with perserverance (and a decent income, which you currently have), you will be able to tackle it in time. If you really want help in figuring out how to pay it off, maybe give some fruther info: what are the interest rates? Is there anything you can sell to help pay some of it off? (X-box, sports equipment, vehicles, video games, etc.) and as another poster asked: what do you bring home and what are your monthly expenses? Do you keep track of where all your money goes? To my mind, you make a decent living for a guy who has a roommate and no other financial obligations (family, mortgage, parents living with you, child support, etc.) Then again, this depends on where you live, of course. So, if you really need assistance in HOW to pay off the debt, I'm sure people here would be happy to offer some budgetting advice if you would provide more detail.
I think the real problem here is that you do not like your current job, yet you want to go to school to get ahead in the same field? You do not like it so much that you are willing to quit with all this debt, and yet you want to move further up in the ranks at the same time? This is a bit strange to me. Maybe you need to figure out what exactly it is about your current position that you do not like. Maybe there is a way to modify it or even think of it differently that could help you stick it out until at the very least you paid this debt off. Are you positive that you will enjoy it that much more if you get more education?
I just wanted to offer some food for thought, because I worry that the bigger decision is being ignored in favor of trying to solve the debt issue, which does need attention, but is actually easier to fix than you may think unless there are details you have not offered yet about your financial obligations....
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Agreed...more debt=BAD
