When deciding to have kids - FIGURE OUT HOW MUCH DAYCARE COSTS!!! We have one daughter and in order for us to both hold down a full time job (which we have to do in order to pay the bills) it costs us $620 a month. Thank goodness we didn’t have twins or that would be $1240 a month. Thats very, very close to our house payment! Lots of places in town were as high as $800 a month.

Just be prepared for some BIG expenses with kids. Most Moms stay home not to spend time with the kids, but because it doesn’t make sense to go to work if they don’t make more than they have to pay in.

Frankly, it sounds like you’ve only begun to find ways of cutting back.

For the people saying 30-35K is decent for a master’s degree, it could be that I run in completely different circles, but for me and most of my friends, when we graduated from regular college 8 years ago, we started in our jobs at around 34K. Now a lot of my friends make double that. Granted, this is in the computer industry, so maybe we’re spoiled, but I just assumed people with higher degrees just naturally make more.

Maybe I’m being overly optimistic here, but just make sure you shop around a lot for a job when you do graduate. You might find that you are indeed undervaluing yourself. Even if you have your heart set on one job in particular, just mentioning that you have had other offers might give you a bit of a bump at the negotiating table.

Uh, no they haven’t. Going that far into student loan debt was a horrible mistake. It’s too late to help them, but for everyone else this should be a lesson. I would never wish this scenario on my own children.

I have a 4 year old and an infant and there is no way in hell I will ever let them take a single student loan. We’re going to save like crazy ahead of time. They will work before they get to college and while they are in college, and if they don’t have the $, they’ll take time off and save money until they can pay-as-they-go.
I believe that an education is of utmost importance, but that doesn’t mean that you should bury yourself in a mountain of debt for 30 years.

People seriously lose all common sense when it comes to finances and education.

I would say you are in no financial shape to have children. Kids can be expensive… breaking a leg on the soccer field, getting a bad illness… someone mentioned day care costs. All are significant when you are stretched thin.

I would do whatever you could to pay down the large mortgage. Either use a HELOC (watch variables rates though). I would also advise you to build up a 3 month emergency fund as soon as you can. I’d do that before any extra debt repayments.

(Do people simply not do any financial calculations on their vanity degrees? That’s what a masters or doctorate is if it doesn’t actually earn you any money. Can you tell it’s a pet peeve of mine?)

Don’t prepay the mortgage, and definitely don’t have kids before you’re on a sounder financial footing.

If you are a great worker and get your Master’s you will advance and quickly be making more than 35k. (unless you are working in government or non-profit)

I, also, won’t get into the rate-of-return question on your masters. I have a masters in public health that cost about $40k, and typically puts you in jobs that don’t pay a whole heck of a lot. One thing to consider, depending on your field, is whether there are positions you can take that offer loan repayment/forgiveness. A friend of mine who graduated from dental school with an astounding about of debt had the option to work in the public health sector & have the loans forgiven after a couple years.

Even if standard debt forgiveness isn’t an option in your field, you should also consider negotiating signing bonuses or straight debt repayment from employers who are interested in you. If you’re in a field with high demand for talent but relatively low incomes, employers often use tuition or loan payment as incentives to attract prospects.

Finally, the 2nd job thing sounds good on paper, but can run you ragged & leave you no room for the rest of your life (read: the wife & eventual kids). We use ebay & craigslist like a second job to earn some more income but with substantially less effort. Look around your house - you’d be surprised what people will buy from you.

Good luck!

30000*.75 (25% tax bracket) yields $22,500 after taxes or $1875 per month. It isn’t a lot of breathing room, but the situation may not be as dire as it seems.

Strategically speaking, you may wish to get a HELOC and move some of the student loan at 8% into it. The HELOC will be tax advantaged.

I was discussing this article with my girlfriend and she said similar things. However, then I had to ask her “Aren’t you in the same situation bit 8 years earlier, though?” And yes, she is.

She studied as an Undergraduate in the UK for three years before moving to Boston to work for a Psychological study at Harvard. Now she’s back in the UK studying a Masters at Cambridge with aspirations to be a developmental psychologist in government social policy when she graduates next year.

Why do I name these places? She funded this herself through loans. She has huge student loan debts (£30k / $57k) but no other debts and can expect a job earning £19,000 ($37,000) when she graduates. She earned the equivalent of more than this when working in a bakery full-time last summer.

She didn’t take her advanced degree for money… it’s what she wanted to do!

The financial advice… I’ll leave that for the others.

I am 49 years old with a bachelor’s degree, and twice opted out of grad school (after being accepted) because of low starting salaries in my field and the high debt that would accrue. Boy, am I sorry I made that choice. Around the time I hit 40, I began to realize that not having a master’s degree in something — anything — was a serious disadvantage. And I ended up in debt anyway, but it was “bad” debt instead of student loans. So don’t beat yourself up. If you’re studying for a degree in a field that you want to work in, I believe it will pay off eventually. I don’t have any suggestions for your current situation, other than finding ways to make extra money, or just keeping it stable for now. Just want to support you in your studies.

But even if your starting salery would only be 30-35k, I wouldn’t be suprised if your salery could rise rapidly during your first few years in the work force. (I personally started at 35k after graduating and went to 45k the second year, 52k the third… going from 0 experience to 1-2 years experience makes a difference.)

I think you should probably do some more research, and shop around more in the job market.

What exactly is your masters in (and what was your bachelors in?)

1) concentrate on the smaller student loan first. Throw all your extra money at that one. Deliver pizzas in the evenings, or newspapers in the early morning. you have to generate more income to throw at the debt.

2) i would not have children right now. you need to get some debt paid off first. Children do not have to cost a lot of money, but in order for you and your partner to both work, you will have to pay daycare. That could run you $1000 a month for a newborn. This is money that you could knock your debt out with very quickly.

3) do not worry about your mortgage right now. You have a loan of $45,000 that could be paid off much faster than the $165,000 mortgage could. And once you have 1 of the loans paid off, that will free up a chunk of cash to either debt snowball or pay daycare if at that time you have any.

I hope you can get through this, it will be hard, but with lots of hard work and discipline, I am sure you can. Good luck!

Jennifer

So, I’m not going to question the value of your higher education or your choice of career. Assuming that you do good work at a job you like and are well suited for, you’re building a good foundation for future advancement.

It sounds like you’ve been making smart decisions, and that you have a realistic perspective on your situation. Honestly, I don’t think you need to do much that you aren’t currently doing.

I might suggest taking a part-time job on evenings and weekends, using that money to reinforce your safety net. Even if you continue to just squeak by financially for a couple of years, knowing that you are prepared to deal with unexpected car problems, computer trouble or medical issues goes a long way towards making you *feel* secure. The real benefit to this is not so much financial as psychological. The big picture seems much less daunting when you have the little things under control.

Once you graduate, give yourself some time to settle into your new responsibilities and lifestyle before making real, detailed plans for kids. It’s not something you’re ever truly ready for, no matter how much you prepare!

Best of luck!
Kitty

Meanwhile, I would find another job / hobby to make some money on the side. $60k/year for two people isn’t good. Invest all the extra money you make in Berkshire.

It sounds risky, but getting ahead in life is simply the process of accepting enough well calculated risks to let them average out and push you ahead. I employ this same strategy because it’s not particularly risky, and very profitable.

Tynan

As for your plan to have kids in the next four years…why not pay off the school debt first? You’ll have more time/less stress/etc when you do have children if you take care of the debt first.

Honestly, I hate to say it, but I feel like $30k/year is something a high school kid can make. With an advanced degree (from an expensive school), it’s time to put that thing to use!

It seems that you have your financial house in order where you dont’ carry any bad debt like credit cards. I think your best option right now it to look for ways to increase your income.

FT
http://www.MillionDollarJourney.com

Education is an investment, but sometimes you have to do some legwork to make that investment pay off.

Good job staying away from the cards. If I were in your shoes, I would focus on:

1.) graduating
2.) finding a master’s level job
3.) getting an emergency fund established
4.) then thinking about kids
5.) then paying down the student loans

I wouldn’t worry about doing anything extra with the mortgage for now. The reason being you already have substantial equity built up, so you can sell and move at any time if you need to (I’m simplifying a little here of course). You can also deduct more mortgage interest than student loan interest. I think the limit for SL interest is like $2500 a year per return, or something like that.