GRS Home  Forum Home
Bank Rates Center
   Savings Account Rates
   Money Market Rates
   Highest CD Rates
Insurance Rates Center
  Auto           Health
   Life              Home
Mortgage Rates Center
  Mortgage Rates
  Mortgage Quotes

Last visit was:
A place for Get Rich Slowly readers to ask questions
and exchange ideas
It is currently Thu Apr 24, 2014 1:28 am




Post new topic Reply to topic  [ 5 posts ] 
Author Message
 Post subject: New to the game and have a mountain of student loans
PostPosted: Sat Nov 17, 2012 2:32 pm 

Joined: Sat Nov 17, 2012 2:02 pm
Posts: 2
Location: Holland, MI
Hey guys, I'm Tyler and basically I have gotten myself into a mountain of student debt. I finished college after 6 years of basically hopping and skipping my way through, really unsure about what I wanted to do. After I finished, I ended up with a Economics degree and about 1 class short of a chemistry minor and 1 class short of a math minor. More importantly though I now have ~$60,000 worth of student loan debt.

I was lucky enough to get an entry level Quality Assurance job and was so happy, not just to start a career with a decent income, but knowing that I could be on the path to paying off my loans. That loan part just never seemed to happen though, I got into the routine of spending more money than I should, not really having much of an emergency fund, I opened my first credit card that I would pay off at the end of each month... until this last month and I took a smallish loan out on a car that I have forever wanted (e28 bmw, 84 533i). Not a good call, especially when I had a completely functional, if a bit smelling like a raccoon died in it 1990 honda civic.

After this last purchase of a vehicle I ended up having to put about $2500 worth of unforeseen repairs into the vehicle, which for the 1st time led me to not only not pay off my credit card, but actually carry a massive balance ~3k. (I also did a fun but dumb trip and waiting on money from my expense report (~$700).

So total bummer news right there but this is my game plan and I would love to have your guy's support on this, it really was kind of an awakening that I was in this bad of shape financially. I even read the Dave Ramsey book and in the process of "The Millionaire Next Door".

My current Debts are as follows ~60k student loans (mostly public, but some private, int from 6-11%) $3000 on my credit card (ugh) 1300 on my loan to get Lasik surgery (Don't regret but needs to be first on the list b/c if I don't pay off by feb 15 all the interest from the 2 years will be applied vs 0% can't believe I lollygagged on that for so long) and $3200 on my car loan (absolutely would not have done in hindsight and 3% int)

I know this will be a long haul at least 5 years to get back to square one, during that time I know I am going to have trouble to stay motivated and I would like to keep my story updated, it will absolutely make me feel better knowing I have support. I am planning on as I have been busting my butt at work and learning work related skills on the side. I also have the opportunity to pick up an extra 10-15 hours a week of OT anytime I would like, so I need to plan on doing that.

I do have incoming windfalls to my budget in $1200 from sale of old car, $700 from covering work expenses, ~$1000 for my bonus. What follows is the budget my mom helped me set up (doing the cash envelope method)

TYLER'S MONTHLY BUDGET $1800


DIRECT LOANS (STUDENT LOANS) $57.00 PER WEEK $226.00 PER MONTH

SALLIE MAE (STUDENT LOANS) $80.00 PER WEEK $320.00 PER MONTH

RENT AND LAUNDRY $60.00 PER WEEK $240.00 PER MONTH

CAR LOAN PAYMENT $38.00 PER WEEK $151.00 PER MONTH

CAR MAINTENANCE $25.00 PER WEEK $100.00 PER MONTH

CAR INSURANCE $21.00 PER WEEK $ 83.00 PER MONTH

GAS FOR CAR $50.00 PER WEEK $200.00 PER MONTH

GYM MEMBERSHIP $ 9.00 PER WEEK $ 35.00 PER MONTH

SPENDING/FUN MONEY $40.00 PER WEEK $160.00 PER MONTH

MISC. FUND $ 7.00 PER WEEK $ 28.00 PER MONTH

TOILETRIES $ 7.00 PER WEEK $ 28.00 PER MONTH

AUDIOBOOKS $13.00 PER WEEK $ 50.00 PER MONTH

BANANA REPUBLIC MC/VISA $13.00 PER WEEK $ 50.00 PER MONTH
(Until you pay off your laser eye surgery...then you will pay more on this each month to pay it off.)

LASER EYE SURGERY $109.00 PER WEEK $435.00 PER MONTH
(This is only for the next "3" months. You will then have this bill paid off.)

TOTAL PER WEEK: $420.00 / TOTAL PER MONTH: $1671.00 / FOR THE NEXT 3 MONTHS: $529/$2106
Use your bonus check to pay off your laser eye surgery. Use any extra (above 40 hours pay to bring down the
MC/Visa bill to zero, then start putting any extra money using a 50/50 split into savings and toward student loans.
When you have $5000 saved change the ratio to 20% savings and 80% student loans.

Let me know what you guys think (I'm considering working on an emergency fund before paying off the visa). Also thank you guys so much for reading my incredibly long winded and not well planned forum introduction. :) Have a great weekend guys and looks like college football for the rest of my day!


Top
Offline Profile E-mail   
 Post subject: Re: New to the game and have a mountain of student loans
PostPosted: Sat Nov 17, 2012 6:44 pm 

Joined: Tue Jun 30, 2009 9:44 pm
Posts: 247
Location: Atlanta, Georgia
Hi, Tyler, welcome to the GRS forum! Although it kind of sucks to have such an "awakening," it is good that it happened sooner rather than later so that you can begin tackling your debt and forming positive finance habits now. The people here will definitely support you on your quest! I'm also happy to hear that your mom is actively helping you with your plan, too. I think you two have come up with a great plan!

As far as your emergency savings, I personally tend to think that after paying off the Lasik surgery, you should do some sort of split between the credit card and emergency savings until your e-fund reaches $1,000. Then go back to everything going to the card until that's paid off. Finally continue with your existing plan for student loan and savings split.

Although I'm not sure whether you're looking for specific input on your budget, IMHO, the gym membership and audiobooks should come out of your spending/fun money (so reduce the spending/fun category accordingly), and the miscellaneous category should be eliminated (just keep it together with spending/fun).

Looking forward to hearing how it goes!


Top
Offline Profile   
 Post subject: Re: New to the game and have a mountain of student loans
PostPosted: Sun Nov 18, 2012 4:06 pm 
Moderator

Joined: Wed Sep 23, 2009 9:01 am
Posts: 5217
I like your/Mom's plan. The modifications LRD suggested are fine too. The most important thing is to stick with whatever plan you finalize on!

Good luck and welcome to GRS. I look forward to seeing your updates.


Top
Offline Profile E-mail   
 Post subject: Re: New to the game and have a mountain of student loans
PostPosted: Mon Nov 19, 2012 11:30 am 

Joined: Fri Jul 27, 2012 8:28 am
Posts: 88
A tip - check and see if your public library offers downloads of audiobooks. That's a pretty significant monthly expense you could put towards debt payments if it is available.


Top
Offline Profile E-mail   
 Post subject: Re: New to the game and have a mountain of student loans
PostPosted: Wed Nov 21, 2012 10:23 am 

Joined: Sat Nov 17, 2012 2:02 pm
Posts: 2
Location: Holland, MI
Thanks for the support and tips guys! I'm implementing the following changes
Fun/Spending from 160 to 80 a month
Audiobooks from 50 to 30 a month
O yeah 100 big ones extra to the cause!

I also am following that emergency fund advice, very good call


This is definitely doable and that library suggestion was killer, I totally have the entire collection of Pimsluer Spanish learning audiobooks. I'm a total nerd so I love the ones that can help increase my knowledge and/or ability to perform at my career (especially while I'm driving or working out).

Also this weekend will be a good test of the fun budget, I'm designated driving all weekend and tonight (volunteered) so that should definitely help keep me under budget and more productive this weekend. Happy holidays guys and have a ton of fun!


Top
Offline Profile E-mail   
Display posts from previous:  Sort by  
Post new topic Reply to topic  [ 5 posts ]  Moderators: kombat, bpgui, JerichoHill, Fiscal Fitness Moderator


Who is online

Users browsing this forum: No registered users and 3 guests


You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot post attachments in this forum

Search for:
Jump to:  
Powered by phpBB © 2000, 2002, 2005, 2007 phpBB Group
Theme created StylerBB.net & kodeki