Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I'm having some financial trouble right now. I actually don't have student loans, but my wife does - about 47K. However, half of that was because her mom had her take out a loan during undergrad to help pay for her family's mortgage (otherwise she had nearly a full ride) on a house they lost years later anyway (I guess if you live at home, what choice do you have?). She did take out loans for grad school though. This was about 6 years ago.
It's something I tried not to think about, but knew it was kind of an elephant in the room. Worse, my wife would shut down every time it was discussed (which wasn't much to be honest). Now that we have a child, expenses are fairly tight. My wife has paid for some of the loans still far, but the balance is effectively about 47K. For a while she has requested a forbearance but I think it's really driving up the balance because of the interest. It's also income-based, which means she has "paid" minute payments for most of the times she did pay, but this isn't enough to fight off the interest. I finally got the numbers in front of me last night and I nearly choked.
I make a decent income - almost 70K, but live in NY which won't get me too far. It takes a paycheck each month to cover the mortgage and escrow tax/insurance and the other paycheck for that month I cover other expenses, but I'm the only one working right now and money has gotten tight. I'm having enough trouble paying down my credit cards which have accrued from hospital bills (I had surgery end of last year in addition to son being born). I pay about 50-60 per month in credit card interest, but it has been SLOWLY going down. But I am extremely conservative on my personal expenses - I don't eat much anymore (bring lunch to work every day - though I'm contemplating just drinking water in the near future and only having solid food for breakfast and dinner), I quit video games, xbox live, I'm tempted to cancel cable which we easily spend over 120 a month on, etc, I cancelled my gym membership (20$ per month), etc. I sometimes walk 40 minutes to save 2.75 and not take the subway. My commute is about 100 minutes door to door so if I was to get a second job, it would only be on weekends - I leave at 630 and am home by 7 that night on a good day.
Wife doesn't work, but no one else can really take care of our kid and we couldn't afford day care anyway. if she can get something part time or from home, that would be ideal.
OK - so that's my financial situation. Certainly there are some relationship issues on my side and hers that are underlying, not to mention it would've been better to wait to have kids, but I'm pretty aware of the damage already.
I just need a way to solve the student loan issue that has come my way.
If I file my taxes separately, I miss out on a lot of the credits I could earn (though next year I will run scenarios to see what the better outcome is) BUT they won't go after my income for student loan repayments. BUUUUT, is this student loan issue ever going to go away? The interest accrual scares me and if I do end up paying...say..300 a month...at least I may be able to write it off on my taxes. She is on income-based repayment which I have heard goes away after 25 years, although I don't know what happens if she isn't working.
The other avenue is to force my mother in law to help us pay back the loans, but I don't see that happening based on how bad the MIL is with money and the kind of money she does make (mostly commission)...I've never heard of a parent forcing their student to take out loans to help pay the mortgage. Sounds pretty abusive, but I need to really consider advice on this front too. If I was a real dick, I would prevent my wife's mom from seeing our kid, but that feels wrong. Then again, if I have to work a second job, I really don't see my kid much at all. I only get at most an hour with him a night because when he goes to bed and how early I have to wake up.
The other option is to find a new job or try to get a raise at my current job. I only get about 1-1.5% raises each year even after getting good reviews, so I may need to actually ask for a promotion...The other is to actually find a new job but it's a bit of a risk because my current company seems to be okay that I only put in 8 hours a day and they allow me to work from home sometimes, saving me on subway money and about 3-4 hours commuting a day..
I just need a way out of this! Divorce is not an option because half of the loan issue isn't her fault (ok she could've said no to her mother about taking out more loans for something non-school related) and my wife is not really making it worse with large spending either....I would appreciate any comments anyone could provide.
IN a sense I sort of know what all my options are but I'm going to post something here because maybe I'm missing something...
Also, I have about 45K in my 401K...I can take out about 21K total, but if I was to do that, i'd probably only walk away with 16K after fees and taxes...but the opportunity cost is probably huge (i'm guessing about 100K in lost investments by the time I retire)
Let wife find an evening job so when you get home you can watch the kids.
Wife puts 100% of salary into paying off those loans.
Get rid of that debt now while those kids are young. College and retirement are future goals you are going to need to save for. But right now..it's get rid of those loans.
1-1.5% raises and 100 minute commute door to door makes me think looking for a new job is something you should definitely explore. A refinance on the mortgage or a HELOC might be other things to consider. Could you make a profit if you rented out your current home and moved to a smaller place (hopefully closer to work)?
You need to sit down with the wife and develop a plan. She needs to be a part of it. The fact that you say 'my wife is not really making it worse with large spending' is encouraging. If you bring up 'force my mother in law to help us pay back the loans' it will very likely only drive a further wedge into your marriage. Sit down and hash it out.
Damn..interest accrued up to 4000 in the past few years ...so pissed she kept me out the loop in all of this...
yeah...if I can get like an extra 400 a month after taxes (that would entail probably about 60 hours a work conservatively at 10$ an hour), things should be easy, but that's after working on all or most weekends in the month.
I just got my MBA so I hope that can give me some leverage when I ask for my raise end of the year (figured it would be good to ask around performance review time).
Mentally and physically I am so burned out though...I get maybe 4-5 hours of sleep a night..weekends are spent catching up on chores...
Sorry I keep double posting but the plan for right now is to kill off some of the smaller credit balances (we have 5 between the two of us)...2 store credit cards are small but the interest is high, so I will suggest paying those off first and not really using them at all unless absolutely needed. Then focus on the "regular" credit cards in small balance order.
Where I live, I'm stuck and going to have to put up at least a 90 minute commute either way. Most jobs around my area (Long Island) are retail unless you're a teacher or cop or doctor, then you make bank. But the closer I go to the city, the more expensive things are and property taxes (easily almost half my mortgage) doesn't get lower.
The loans and the job situation are two different issues.
-- IF you didn't have the loan issue would you stay where you are job wise?
You get raises, and could go for a promotion at your current job -- AND this job is only 8 hours a day AND lets you work from home sometimes. Working from home is like getting paid more because it saves you money and time in commuting. IF you look for another job just keep that in mind....you already know any raise would be eaten up by commute costs. BUT if you get 10-20k raise I think you'll be able to handle the extra commute costs. And IF you're going to look for a job try to get one closer that an hour-and-a-half commute. Yikes! I know people do it every day...but yikes!
If you want a promotion where you are that's fine to. UNLESS you are REALLY HAPPY doing what you're doing. And really don't WANT any more responsibility or a position that may not be as 9-5 and would mean a longer work day and more headaches.
-- Is your WIFE trying to figure out how to get these loans paid off?
Let HER work (all least part-time) to pay it off. ALL her earnings should go to the loan. Never having been married I can't even imagine having someone else eff up my finances and risk my financial future. I give you credit I'd have so much resentment I'd have to really do some soul-searching.
But it's not really clear WHEN YOU found out about the loans, before or after you were married. If before I guess resentment in you case shouldn't be an issue. I still hope your WIFE does more to remedy this.
As for filing joint or separate -- as you said run the math on that. And get details on the pros and cons.
And find out about any fine print on the balance of loans being forgiven after 25 years. Maybe you have to have made a certain amount in payments to qualify, maybe you can't have had any deferments, maybe you have to WRITE OFF that forgiveness as income. Find out about all of that.
Quote:
A refinance on the mortgage or a HELOC might be other things to consider.
That's an idea. If you do that though, you know that's taking quite a bit of equity out of the house. So I'd likely only do that if I thought I'd be in the current place for a good while....to try to make up that equity hit. But I'd consider it as a possible option. And it makes all the interest on it deductible (for now).
Quote:
Sorry I keep double posting
1) you're not double posting.
2) it's helpful when you come back and update us....it helps us help you. To provide more information means you can get more helpful responses.
Well, I would say to start with, definitely cancel the cable. $120 a month will go a long way toward reducing those debts if you are only paying $50-60 now. You can pay them off 3 times faster, just with that alone.
Next, do you own any cars? If so, those might be expenses you can get rid of, living in the New York area and using the subway.
Finally, my overall suggestion would be to write down where every single penny goes for the next 30-60 days and then post it here so we can give you advice where you can save.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
