September, 2016

For the student loans

I get a cancellation in 2020 even with a balance so it doesn’t really matter that it gets paid off. Because I owe so much, I would never be able to make a regular payment so I am on the income based plan. it automatically cancels after 25 years of payments. yes, I know that TS would say that I should just pay it anyway, but this is one time that I plan on taking advantage of the cancellation. I pay 541 each month (installment loans for bad credit) and it barely touches the principal. We’re two moms with Ph.D.s so together we have 157,000 in student loans. Most of that is mine because my parents did not pay for my undergraduate years and because I have two masters’ degrees. But, in 7 more years, about 90,000 of that will be gone. If I had it to do again, I’d find a way to go to school without the loans, but I did not know any better at the time. Right now, my partner has 47,000 in student loans and hers we have to pay off. That’s still a lot, but it’s a better number than the first and her interest rate is only 3 percent. So, when we are ready to snowball the student loans, the money will go into hers. I’m hoping that it can be gone in those 7 years.

I am pretty good at figuring out numbers so I’ll probably try and run them myself. It’ll just take some reading up on the rules. I like to do it myself so that i understand where the numbers came from. But, if I can’t figure it out, then I think I’ll find someone to help us.

Congrats

I know it’s hard to hitch up a partner’s finances (and their financial “style”) to our own. My DH and I are still working on it, after taking FPU almost two years ago. My DH is the type who spends very little but feels justified in spending what he does, since he’s the bigger bread earner by far. So any suggestions to change his spending is a hard, hard sell, no pun intended. Meanwhile I pay all the bills and all the farm bills and set aside money for the sinking funds and some days yes I lose track of this-or-that detail. I use Quicken which helps but I still manage to lose track sometimes. It’s a work in progress. Kudos to both of you for getting started on that work.

Yes, this was the case

Things have changed somewhat. She gave me all of her information so that we could put it all together and in front of us.

It turns out that she wants to be on board, but struggles with the issue of paying attention to the details. She hates to keep track of it all. I offered to be the one to do that for both of us and that was when she offered up all of her information.

She works for the DOD so we are facing a 20 percent cut in her pay for 11 weeks starting sometime in July. It is hard to come up with a joint budget until I know what the exact numbers are, but i put together a plan for a snowball repayment with two different options and presented them. She picked the one that she liked best and we are going to get started. We leave for vacation in two days. Once we get, we will be in a better position to figure out an 11 week budget.

Her spending tends to be the impulse kind and she just doesn’t pay attention to how much it adds up to. I ran the numbers and discovered that she is paying 600 dollars a month in interest – no wonder she can’t get that paid off. She has paid off 10 thousand in the last year so it’s not like she hasn’t been working towards it somewhat, but she could have done better if she had paid attention. Both of us have been doing things like buying clothing, etc. at thrift stores for over a year and she has been good about that. it’s more the seeing something cool at Target while picking up a prescription and then just adding it to her credit card. That’s the stuff that needs to stop. She had no idea how bad things were because she just hasn’t noticed. Now, she’ll have me to point it out to her monthly.

I know that DV doesn’t advocate this, but i went through and found a way to transfer balances so that her interest payments will only be about 100 dollars a month. That means that 500 dollars more each month will go to the principal balance. With my debt, I am only paying about 12 dollars of interest a month. Plus, even my highest interest card is only 13 percent and that one has no balance. My card with a balance is only 7 percent. Now, we should be able to start making some progress. It’ll still be a few years before it is all paid off, but I feel so much better knowing that we are doing it together.