Links of the Day

What a busy weekend and week! I don’t have the time for a super long post, but I wanted to share some great links I stumbled upon regarding debt.

Both of the following posts are by Steve Rhode, the Get out of Debt Guy, who writes a blog for Huff Post.

My Student Loans Take Half My Income. Help.

This article offers some advice to a person with $80k in student loan debt, $48k of which are private. Steve has some great tips, including consolidation and income-based repayment for the federal loans. As far as the private loans, Steve provides a link to a credible website that specializes in helping people manage private loan debt. FYI, he often stresses in his blogs to avoid paying for private student loan help.

If you’re curious about bankruptcy options, you can find some valuable information in another one of the links Steve provides. I’ll be writing more about this later, but if you’re curious and are looking for some trustworthy info, I recommend his articles.

Why Most Student Loan Debt Advice Is Bad or Just Wrong

Similarly, this post discusses avoiding scams and getting the right help from the right people. Sometimes, professionals who are genuinely trying to help are misinformed or uneducated on student loan debt. Here, Steve provides links to help you get started if you are seeking professional help.

I want to draw attention to one of Steve’s paragraphs, in which he says, “Some might say I’m advocating just walking away from problem student loans. I’m not. What I am advocating is that legitimate help is already available for people who are buried in student loans, can’t make the payments, have loans sitting on deferment or forbearance and getting bigger, desperate for real help, or don’t have the ability to save for retirement. In a perfect world everyone would be able to repay their student loans without a problem. But then again we don’t live in a perfect world, do we?”

If you read Steve’s blog, you’ll notice he writes a bit about bankruptcy and it can be a tempting option. But like Steve said, he doesn’t advocate walking away from your debt, but he does want you to know that if your debt is crippling you may have other options that you haven’t explored.

You climb every mountain, Maria.

So, explore away. You’ll find me citing quite a bit from Steve, so I recommend following him for tips on getting out of debt. 

Understanding the System

If you’re like me (and nearly 37% of other grads), you didn’t find a job in your field right after graduating. Me? I worked in fucking retail for two years … by the way, I had a 3.7 GPA, so don’t take it personally if this happens to you. And if it doesn’t happen to you, don’t judge your peers for their inability to land their dream job right away.

So, how have I managed to pay off my enormous loans so far? By understanding the system.

See, here’s how my loans break down: About $108,834 are private loans and the remaining $28,707 are federal loans.

Stop looking at me like that, George.

My provider is Sallie Mae, and while they don’t offer much in the way of making your private loans manageable, they do have some options. Continue reading

We Got a Lot of Debt

Do you have a lot of college debt? Join the club.

Recent reports show that 71% of college grads have debt, averaging $29,400. That is a shit ton of money, especially for unemployed or underemployed college grads.

Now I’m going to be straight with you. My collective student loan debt blows that amount out of the water. In all, I have amassed about $140,000 in student loan debt. For undergrad.

How I feel every time I log into my Salle Mae account.

Why am I telling you this? Because I’m surviving and so can you.

There’s no use in crying over spilled milk. I spent the money and now I’m paying it back.  Throughout the lifetime of this blog, I’ll tell you what I’m doing and I welcome you to share how you’re managing your debt.

It’s a cruel world for college grads. We go from studying and partying and having the time of our lives to owing a brand new car’s worth of money (or in my case, a mortgage’s worth). Learning how to create and stick to a budget is tough, but we can help each other out, learn from our mistakes, and put an end to our financial nightmares.

I shared, now it’s your turn. How much debt do you have?

Living with Student Loans Is …

Well, it’s a lot of things, but depressing is the first word that comes to mind.

I’m not going to bullshit you. I hate student loans. Sometimes, if I think about them too much, I end up curled up in a ball on my bed sobbing. If I don’t think about them enough, I spend too much money and come payment time also end curled up in a ball sobbing. Continue reading

Should I Stay or Should I Go?

If you’ve got a lot of student debt, you may have asked yourself this question …

“Should I stay here on my own, or should I go home?”

A reader asked whether or not I lived at home and the answer is no, I live on my own. But there are some things that have made this a little easier.

First of all, I live with my boyfriend. To be fair, we share a 2 bedroom apartment, so it is essentially the same as having a roommate. Although, he is going back to school so I make significantly more than he does, and thus, pay more toward rent than I would if I had a traditional roommate.

I’m not saying cohabitation is the answer, but it has been nice because in the past we shared a 1 bedroom apartment and saved a lot of money that way. But we are both slobs and realized we needed extra space.

So, how do we do it? We budget. To the max.

We Don’t Eat Out:

Or rather, we rarely eat out and don’t typically buy convenience food, either. Most of what we buy is produce. I almost never eat meat, so we save money there. And when I do, I splurge on chicken, not steak. (PS: When I want to eat nutritiously and deliciously and meatlessly, I go to Deliciously Ella for yummy recipes.)

We don’t buy new clothes:

Well, we do sometimes. At this age, we’re pretty much done growing so we use what we have. When we do buy clothes, we shop at Old Navy and Target. Sometimes we use RetailMeNot to see what sweet deals are going on nearby.

We don’t drink:

Not because we don’t want to, but because it’s usually inconvenient for us. My boyfriend usually works weekend evenings. Plus, most of our friends live a good 10+ miles away and we don’t want to risk drinking and driving. Sometimes we buy a case of beer for home but at this point we have the tolerance of college freshmen so it lasts a while.

We don’t go on vacation:

Ever. The last time I went on a vacation was spring break in 2009. The last time he went on vacation? Does getting stuck in an airport in Cleveland on his way home for Christmas break count?

We don’t have car payments:

I own my own car (thanks mom and dad) which is pretty old but mostly reliable. He uses public transportation. We also don’t pay for insurance (again, mom and dad, you rock!).

We don’t have cellphone payments:

We’re lucky. Our parents still take care of it. Mostly because if they didn’t we wouldn’t be able to afford it.

Now maybe you don’t have all these luxuries. I realize that not everyone can drive their parents’ old clunker or rely on public transportation. Many of you probably have cell phone bills and insurance payments. But many of you do not pay $500 a month in loans … a cost that will soon jump to $1,000.

So if I’m barely making it now, what’s my game plan for when my loans jump up?

I’m moving home, folks. 

But just for a little while! Here’s why:

  • I have about $8,000 in medical bills and credit card debt I need to pay off. This takes up a significant portion of my monthly salary as is and I won’t be able to afford it when my loans jump up.
  • My boyfriend doesn’t have a car. He needs one.
  • My boyfriend is back in college and would like to go full-time. He can’t do that with a full-time job, so he’d like to drop down to part-time. This is something we can’t currently afford.

The first thing they say about moving in with your parents is to have an exit strategy. I’ve calculated that living rent-free (we are still paying for groceries) will allow us to pay off all my debt in a year. I should also be able to get a moderately-priced used car and pay that off in around a year (maybe a little longer) and sell my clunker to my boyfriend (can’t rely on public transportation where my parents live).

After a year or year and a half, we should be able to move out debt-free (except our student loan debt, obviously). Because the cost of living is so inexpensive there, I should be able to afford a 1 bedroom apartment easily, possibly even a 2 bedroom. My boyfriend can still work only part-time and focus on his studies (which will hopefully lead to him graduating early … he’s going back to school and already has quite a few credits). And the plan is, in 3 years or so we should have a pretty solid income and can move back to the big city.

This is a huge commitment on my part and my boyfriend’s. He has never lived anywhere other than a city. He is going to be living with my parents in our not-so-huge home. I am going to be supporting him while he goes through school. Are we crazy? Possibly, but please keep in mind we’ve been dating for five years and would be engaged if we could afford to even think about being engaged (I feel certain I just lost $20 somehow by publishing my wedding thoughts). So this isn’t something that’s a viable choice for everyone.

Plus, my parents are amazing. This was their idea. They’re the coolest and aren’t going to lose it if we get drunk (as long as we don’t drive), accidentally curse, make too much of a ruckus, etc.

So can you afford to live on your own with a ton of student loan debt? Probably. It’s tough, though. We don’t have money for many activities. Going out to eat, drink, visit a museum, shop, etc. is a huge deal. And we savor it.

But you have to spend smarter. You can’t get brand new furniture in the nicest apartment in the best area of the city. You can’t buy so many new clothes your closet can’t hold them so you have to store them in your oven and constantly eat out like you’re Carrie Bradshaw. $2.50 Miller Lights are you new bff and seriously who orders a martini at a bar anyway? You probably can’t live alone and having roommates may mean living life like you’re in a frat house with all the stink and none of the fun. And don’t even think about buying a brand new car (side note: a friend with almost as much debt as me bought a new car, so you probably can think about it but I still advise against it).

Don’t want to make all those sacrifices? I don’t blame you. It’s been real but it hasn’t always been fun. There’s no shame in going home. In fact, we’re both pretty excited about it. We can finally have a real saving’s account. We are going on our first vacation (someone else paid for the house, we just need to pay for our own gas and groceries). We can go to parties again! Maybe even see a movie (the last one we saw in theaters was the Hobbit. The first one. That came out in 2012).

But we’re also glad to have an exit strategy. We have a goal we want to accomplish (be debt-free except for our student loans). We have set a time frame (1-1.5 years). We don’t feel like we’re going home to mooch. We feel like we’re going home to save some money and catch our breath.

It’s hard out there for a hustla.

A Look at ROI

This has been making the rounds on the Internet, but in case you haven’t seen it or don’t quite understand what they’re talking about, here you go!

4 surprises about the costs and benefits of college

In a nutshell, PayScale took a look at every college in the US and calculated the average ROI, or return on investment. Essentially, PayScale examines how much it costs to attend a given college and compares it to a typical alumni’s average earnings 20 years after graduating. The ROI is the net 20 year earnings of the college grad, minus what the person would have earned as a high school grad and the cost to attend college. So, simply put, it’s how much more a college grad earns compared to their high school grad peers.

I’m going to make a shit ton of money … right?

This isn’t such a useful tool for people who have already graduated from college (unless you find out your school/major has a great ROI which can be encouraging). But I’m a silver linings kind of gal, and one of the things I took away from my massive student loan debt is now I know better.

So, 20-30 years down the road when my kids are ready to go to college (if I can ever afford to have kids), I’ll remember this article and try my very hardest to encourage them be computer science majors … err, I mean, follow their dreams? As long as their dreams are a sure thing … right?

But we want to be art history majors!

That’s good parenting.