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We're in debt!!!

D

dxkj

Lifer
Just added up all the loans my wife and I have, and when I graduate soon we will have a total of

$56,521 in debt.


This isn't taking into account savings and stock, etc, but those are being treated as untouchable anyway (trying to get an early jump on retirement, heh).

I'm 22 and she is 23. She has a degree in psychology and I will have one in computer science. She will be going to grad school in about a year so that will probably be a bit more debt. Hope I can land a decent job 🙂


Can't wait until we get a house 😛 (actually only partial sarcasm, since we are dumping $10k a year into rent at the moment)
 
If your debt interest rate is greater than your savings interest rate (which I bet it is), then empty out your savings and pay down your debt. The stocks is a judgement call, but with the current market flatness, I would lean towards selling those and paying down the debt further.
 
Originally posted by: CPA
If your debt interest rate is greater than your savings interest rate (which I bet it is), then empty out your savings and pay down your debt. The stocks is a judgement call, but with the current market flatness, I would lean towards selling those and paying down the debt further.
Click to expand...

of course this is taking into account that you leave enough cash in your savings to cover yourself in case of an emergency (ie. losing your job).
 
Originally posted by: CPA
If your debt interest rate is greater than your savings interest rate (which I bet it is), then empty out your savings and pay down your debt. The stocks is a judgement call, but with the current market flatness, I would lean towards selling those and paying down the debt further.
Click to expand...

We have 4k in savings, for moving/emergencies, and as a buffer for living expenses.


10k in stocks. 5k is in XOM which pays decent dividends and the stock has been performing decently, plus with the oil prices going up Im kinda leaning towards hanging onto it.


You say empty savings account (2% interest rate), but consider the fact that if any emergency expenditures are required, and I end up using a credit card, I'm stuck at 8-12% interest rate instead. Which will only go higher if the rate hike happens.
 
Originally posted by: dxkj
Originally posted by: CPA
If your debt interest rate is greater than your savings interest rate (which I bet it is), then empty out your savings and pay down your debt. The stocks is a judgement call, but with the current market flatness, I would lean towards selling those and paying down the debt further.
Click to expand...

We have 4k in savings, for moving/emergencies, and as a buffer for living expenses.


10k in stocks. 5k is in XOM which pays decent dividends and the stock has been performing decently, plus with the oil prices going up Im kinda leaning towards hanging onto it.


You say empty savings account (2% interest rate), but consider the fact that if any emergency expenditures are required, and I end up using a credit card, I'm stuck at 8-12% interest rate instead. Which will only go higher if the rate hike happens.
Click to expand...

see fivespeed5 answer above.

I made the recommendation based on your statement that you were getting a jump on retirement. Savings account is not a good investment for retirement, especially if you have 8-12% interest debt.
 
Originally posted by: CPA
Originally posted by: dxkj
Originally posted by: CPA
If your debt interest rate is greater than your savings interest rate (which I bet it is), then empty out your savings and pay down your debt. The stocks is a judgement call, but with the current market flatness, I would lean towards selling those and paying down the debt further.
Click to expand...

We have 4k in savings, for moving/emergencies, and as a buffer for living expenses.


10k in stocks. 5k is in XOM which pays decent dividends and the stock has been performing decently, plus with the oil prices going up Im kinda leaning towards hanging onto it.


You say empty savings account (2% interest rate), but consider the fact that if any emergency expenditures are required, and I end up using a credit card, I'm stuck at 8-12% interest rate instead. Which will only go higher if the rate hike happens.
Click to expand...

see fivespeed5 answer above.

I made the recommendation based on your statement that you were getting a jump on retirement. Savings account is not a good investment for retirement, especially if you have 8-12% interest debt.
Click to expand...


the stocks were loosely "retirement" minded.... the savings is for emergencies.
 
Originally posted by: dxkj
Just added up all the loans my wife and I have, and when I graduate soon we will have a total of

$56,521 in debt.


This isn't taking into account savings and stock, etc, but those are being treated as untouchable anyway (trying to get an early jump on retirement, heh).

I'm 22 and she is 23. She has a degree in psychology and I will have one in computer science. She will be going to grad school in about a year so that will probably be a bit more debt. Hope I can land a decent job 🙂


Can't wait until we get a house 😛 (actually only partial sarcasm, since we are dumping $10k a year into rent at the moment)
Click to expand...

That's just a bit more than I just made on my home sale and tomorrow will put down on my new home. BTW, besides one car debt, we're debt free. I'm 40 btw. I'm sure you'll be better off when you're um, older.
 
Around $15k, all in student loans. It's only $15k because my parents paid for my books and living expenses in school. I am VERY thankful for that! I have a decent amount of savings also, but as low as the rates on my student loans are, it's almost foolish to deplete all of my savings just to pay that off faster.
 
trust me, pay off your debt as fast as you can. eat spam and ramen to save money on food.
If you get laid-off or fired and have any sizeable debt it will hurt you in finding a good job. I have shibby credit and it has cost me several jobs.
Nowadays having bad credit automatically means you are going to be a theif in employers minds.
 
Originally posted by: JeffreyLebowski
trust me, pay off your debt as fast as you can. eat spam and ramen to save money on food.
If you get laid-off or fired and have any sizeable debt it will hurt you in finding a good job. I have shibby credit and it has cost me several jobs.
Nowadays having bad credit automatically means you are going to be a theif in employers minds.
Click to expand...

My wife has great credit, and I have good credit.


shibby

great, really good; cool

from Urban dictionary



So your credit is really good, great, cool, but its costing you jobs?


Since these are school loans, and we aren't late on anything, then I think its best to continue paying as much as we can without leaving ourselves in an awkward position.
 
Originally posted by: dxkj
Originally posted by: JeffreyLebowski
trust me, pay off your debt as fast as you can. eat spam and ramen to save money on food.
If you get laid-off or fired and have any sizeable debt it will hurt you in finding a good job. I have shibby credit and it has cost me several jobs.
Nowadays having bad credit automatically means you are going to be a theif in employers minds.
Click to expand...

My wife has great credit, and I have good credit.


shibby

great, really good; cool

from Urban dictionary



So your credit is really good, great, cool, but its costing you jobs?


Since these are school loans, and we aren't late on anything, then I think its best to continue paying as much as we can without leaving ourselves in an awkward position.
Click to expand...

My last two employers did a credit check, background check and drug test on me prior to me being hired. I don't do drugs, I have no criminal background and I have excellent credit though so I didn't object. Can't imagine what it would be like trying to find a decent job if I didn't though.
 
You will never live without debt. It is the American way to assume large volumes of debt. Cars, houses, home imporvement, credit cards, student loans, your kids student loans, etc. etc. etc.

Simply learn to manage the damage and get on with it...
 
All vehicles were paid for cash. House was paid for cash. I am paying my daughter's college tuition in cash, and her rent/fod/spending money till she is done.

No loans, or anything, but I put approx. $20,000 on the credit cards renovating the house.
I will be 41yrs. old in May, b/f i s 37yrs old.
 
Originally posted by: cricky
You will never live without debt. It is the American way to assume large volumes of debt. Cars, houses, home imporvement, credit cards, student loans, your kids student loans, etc. etc. etc.

Simply learn to manage the damage and get on with it...
Click to expand...

By manage...you mean file for bankruptcy protection from your creditors after horribly overextending yourself? Now THAT is the American way.
 
Holy crap that's a lot of debt. I'm 24 and still have 10K in (low interest) school loans, but I have enough cash on hand to pay them all off (I just don't want to yet)
 
Originally posted by: KarenMarie
All vehicles were paid for cash. House was paid for cash. I am paying my daughter's college tuition in cash, and her rent/fod/spending money till she is done.

No loans, or anything, but I put approx. $20,000 on the credit cards renovating the house.
I will be 41yrs. old in May, b/f i s 37yrs old.
Click to expand...
what do you do for a living, and/or did you win the lotto or have rich folks?, heck I can barely buy groceries with cash.
 
Debt isn't bad. Assuming it's healthy debt.

My wife will graduate with about $80k in student loans but she'll roll out making just shy of 6 digits. We can comfortably live off my income for a year or two and put every penny of her income to clobbering out the loans.
 
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