Learning to live with debt

[jaisoif07]

This goes out to everyone facing a greater amount of debt than they think they could ever manage, whether it's from student loans, credit cards, mortgage, etc...

How are you dealing with the notion that your ability to succeed financially may be greatly limited by your debt, no matter what you do? In the case of student loans, for instance, I realize that because I will owe an obscene amount by the time I complete my education (WAY above what people quote in any article that I've ever read on the subject), I will either a) have to pray, pray, pray that I'm able to get some sort of work that qualifies me for a repayment plan and rely on its staying in tact for forgiveness b) hope that I come into some unexpected money that I won't need for any other life expense that I can use to pay it down or c) make payments to the grave. I admit that I brought this upon myself by borrowing for a year in a professional program that didn't work out and could literally cost me for the rest of my life (though I believe deep down that the costs would have been oh-so-much higher if I had stayed in the program). And even half my debt would put me in the same situation.

The economy being what it is now, I've decided to go back to a much lower cost grad program, and sooner rather than later, but have to borrow again for the next year and a half (max). I have very little debt from undergrad (actually lucked out w/ scholarships and grants)-- a little bit more than half of what remains will be from the one year mistake, the rest from my new program.

There is a lot of talk about paying off/getting rid of debt, but it seems that we 20-30 somethings may have to learn to cope with or even to embrace our debt rather than letting it drive us insane.

Any inspirational stories or advice for learning to live with debt?

[winneythepooh7]

Outside of our mortgage, my student loan debt is my only debt. I've learned to accept the fact that it's going to be around for many years. It really doesn't bother me much. I think i'd feel worse if I had more debt than that---like in credit cards. I also am able to still save money and pay a good amount towards my student loans each month. That's better than what many people are faced with so I feel blessed.

I wonder what it's going to be like years from now if my son chooses to go to college.

[pisces2473]

I think you have to make choices. I know a lot of people who have debt but also manage to have a life, and aren't living off of Ramen and with 20 roommates. It depends on your priorities and what you're willing to live with/without.

Some have pretty good paying jobs to help take care of their debt--which can come with its own trade-offs, especially with free time. Other people have adjusted their living around their salaries, so that they can make their payments, but this might involve working odd hours, living in a more rural or low cost area, etc.

It is very hard to "have it all" while you're in debt. Many people adjust their living accordingly, and change their mindset about what they "want" and instead, focus on what they "need."

Hope this helps.

[NewMrs.]

I don't know how much debt you consider to be "a lot" of debt.

However, I had absolutely no revolving credit card debt. Then I got married to a man who did. Before we got married, I knew about this debt, but I didn't think too much about it. I knew that he had a few thousand on one card, and a few thousand on another card. Well, after the wedding we added up all of the various amounts that he had on different cards and both realized for the first time that my husband had $15K in credit card debt.

This really stressed me out. We had a lot of very stressful discussions regarding paying down our debt. We made paying this off one of our biggest priorities at the beginning of our married life, and we had it completely paid off right before our second anniversary. During that time, we also paid off a $6K personal loan that had been taken out to help a family member. We also paid off my car and paid towards our student loans. After we paid off my car, we sold it to my sister and used the money to help pay down more debt. (Right now we share my husband's car.)

As of right now, we are one month away from paying off my husband's car and about three months away from completely paying off all of our student loans. After we pay these off, the only debt that we will have we be our mortgage. (I am praying and keeping my fingers crossed that nothing else comes up.)

I found Dave Ramsey's book "Total Money Makeover" to be an enormous inspiration when I got depressed about all of our debt. Dave Ramsey isn't for everybody; for instance, he is a born-again Christian and in all of his books and on his radio and his TV show he frequently quotes from the Bible and talks about his faith, so if this offends you, you might want to avoid his work. However, I have heard that Suze Orman's books are also very highly recommended, although I personally have had no experience with them.

Good luck!

Edit: I forgot to mention that the reason that I found Dave Ramsey to be so helpful is because of his instructions regarding the Debt Snowball. I wrote about it before on these boards, and I believe that other poster's have mentioned the Debt Snowball before, so you should be able to find it if you use the search function on this board or else Google it because so much has been written about it on other boards. I did my own version of the Debt Snowball because I didn't agree with some of Dave's advice.

[NewMrs.]

Other people have adjusted their living around their salaries, so that they can make their payments, but this might involve working odd hours, living in a more rural or low cost area, etc.

It is very hard to "have it all" while you're in debt. Many people adjust their living accordingly, and change their mindset about what they "want" and instead, focus on what they "need."

Hope this helps.

I guess that I didn't actually provide any advice on how we were able to pay off the debt. For one thing, we live in a really low COL area. We have both lived in this region for most of our lives, so we don't feel like we are missing out on anything by living here. I sometimes (but definitely not always) shop at Goodwill. I got some of my jackets for work from Goodwill. I sometimes clip coupons when I am in the mood. Neither of us have ever had brand new living room furniture, because that's not at the top of our list of priorities right now. Our living room consists of secondhand stuff right now. We sometimes splurge, but we splurge on the things that are most important to us.

[hereisnewyork]

I've definitely posted about my situation before. I could go on and on about this... It's tough...I'm in a ton of debt, credit cards and student loan...a lot i regret and a lot i couldn't do much about...and i know it keeps me from doing A LOT of things like travel, living alone, having ANY savings, etc...but this is life.

"society" and people i've spoken to tells me i should feel horrible probably on a daily basis about the debt i'm in and there were times when i did...i even once read an article about how these 2 college kids were in so much debt they committed suicide...i was completely blown away, there's no way that was their only issue...its insane! so at some point i decided how is it possibly worth it to be miserable over debt...i pay what i can and its my life and im the one who has to deal with the fact that i can't do certain things.

it's going to be there for a long time and hopefully some day ill make a little better salary and put a dent in it at least. until then, i'm learning to spend a lot less (unemployment helps me learn how lol) and try not to think about it <--that is key

best thing is, always make your payments on time so that THAT is never an issue, cuz that can make you feel like a low life (at least for me it would) and will destroy your credit rating...high amounts of debt actually isn't a credit killer if you don't default or make late payments...debt you are paying back like you are supposed to, you shouldn't feel terrible about...there are much much much much worse things.

this economy crisis is AWFUL but personally has made me feel a tinge better because i realize hey! i'm not the only person who sucks when it comes to money lol.

[jaisoif07]

Hi again, thanks for all the comments and advice. I just wanted to add a few more thoughts...

In terms of how much debt we're talking about here, it's much greater than what sets off alarms in most people and entirely student loans (anyone who has considered or attended professional school may have some idea of the staggering debt graduates can potentially leave with). I haven't been able to find a job that pays more than enough to barely meet my basic needs since graduating from undergrad. I'm trying to avoid credit cards like the plague and am not yet married or thinking about having a family. I know I may never reach certain 'milestones' like car or home ownership, retirement, etc... but am working on being ok with that. I actually have been able to travel a bit and have generally enjoyed life thus far, despite all of this. While I admire those who are overcoming/have overcome their debt by being careful, I know that I won't be able to manage my own debt just by staying on a budget, clipping coupons, living in certain areas, etc. My debt is so extreme that even the most sophisticated financial savvy on the planet cannot save me from it. I have to assume that I don't have the option of a future in a high-paying field, and, at the end of the day, may actually be worse off in that case. I have to face the reality that debt is a part of my life and am looking for ways to avoid ending up like those students who took their own lives... I'm very aware that there is no light at the end of the tunnel for me financially (there is no dreamy 'someday' far off in the future, when I'll be able to do xyz), and live accordingly (find creative ways to experience things in life).

I know I'm not alone...but it's difficult to find anyone willing to talk openly about these things...what it means to be so young and already shot down because you value education and a higher quality of life (as in what comes from experience rather than what money can buy)...

[1977]

Try to put a value on your education - you may find consolation in the fact that the value is much greater than the monetary cost of it.

[jaisoif07]

Hm, yes...an invaluable education, matched with infinite debt :googly:

[1977]

Hm, yes...an invaluable education, matched with infinite debt :googly:

I have infinite student debt also but every penny was worth it in the sense that it opened the doors that really mattered. You may find the same down the road.

[wordsmith]

My student loan debt, which is by far my largest debt, actually doesn't bother me at all. I've always been able to meet the reasonable payments without breaking a sweat, even having toiled in some seriously low-paying fields. Owing money generally always stresses me out, but my educational loan is a curious exception.

Part of it is that my mindset toward this category of debt is different than it is toward other debt. It's just kind of a given, and not an expense I kick myself over having been unwise/careless enough to have incurred, unlike, say, consumer debt. I never doubt the wisdom over borrowing money for school. Compared to the pricetag of my alma mater, I really didn't have to borrow that much. Any new homeowner and many auto owners owe a hell of a lot more than I do for my four years of top-notch private school education, so that helps me keep it in perspective for myself.

[winneythepooh7]

I also think it's important for many to remember (especially in high cost of living areas) that many "goals" like home ownership are out of reach for most people unless you are doing it on a joint income. And often one partner's income has to be double, even triple their partner's. At least I know that is what it's like for me/most people in my circle/area.

Don't even get my started about coming up with a "down payment".

I think a key as well is not comparing yourself to where others are in terms of these areas of their lives.

[wordsmith]

[QUOTE=NewMrs.]
I found Dave Ramsey's book "Total Money Makeover" to be an enormous inspiration when I got depressed about all of our debt. Dave Ramsey isn't for everybody; for instance, he is a born-again Christian and in all of his books and on his radio and his TV show he frequently quotes from the Bible and talks about his faith, so if this offends you, you might want to avoid his work. However, I have heard that Suze Orman's books are also very highly recommended, although I personally have had no experience with them.

QUOTE]

I find that Dave Ramsey is highly annoying to me on a personal level with all the born-again stuff, but that the financial advice is very sound. I find Suze Orman to be suspect, myself.

[1977]

[QUOTE=NewMrs.]
I found Dave Ramsey's book "Total Money Makeover" to be an enormous inspiration when I got depressed about all of our debt. Dave Ramsey isn't for everybody; for instance, he is a born-again Christian and in all of his books and on his radio and his TV show he frequently quotes from the Bible and talks about his faith, so if this offends you, you might want to avoid his work. However, I have heard that Suze Orman's books are also very highly recommended, although I personally have had no experience with them.

QUOTE]

I find that Dave Ramsey is highly annoying to me on a personal level with all the born-again stuff, but that the financial advice is very sound. I find Suze Orman to be suspect, myself.

Although it may be innovative to offer complimentary exorcisms with the budgetary advice, i too tend to agree that preachy religious agendas masquerading as financial advice are somewhat distasteful. Having said that I am not personally familiar with the work of this broadcaster (tele-evangelist?)

[cameralady]

I also think it's important for many to remember (especially in high cost of living areas) that many "goals" like home ownership are out of reach for most people unless you are doing it on a joint income.
I am realizing that is true. (So much for the feminist notion of buying a place alone.)

I think a key as well is not comparing yourself to where others are in terms of these areas of their lives.
True. If I were to compare myself constantly with my former classmates, especially those in my city, I wouldn't bother getting out of bed in the morning.

As long as things aren't dire enough to call Consumer Counseling Services, you will somehow survive.

[I find Suze Orman to be suspect, myself.
Oh, why?

[NewMrs.]

[QUOTE=NewMrs.]
I found Dave Ramsey's book "Total Money Makeover" to be an enormous inspiration when I got depressed about all of our debt. Dave Ramsey isn't for everybody; for instance, he is a born-again Christian and in all of his books and on his radio and his TV show he frequently quotes from the Bible and talks about his faith, so if this offends you, you might want to avoid his work. However, I have heard that Suze Orman's books are also very highly recommended, although I personally have had no experience with them.

QUOTE]

I find that Dave Ramsey is highly annoying to me on a personal level with all the born-again stuff, but that the financial advice is very sound. I find Suze Orman to be suspect, myself.

I think that the books are Dave's strong points, although the only one that I read was Total Money Management. Best $25 that I ever spent. However, if anybody is new to his approach, you might want to check his book out of the library before you buy it, so that if he rubs you the wrong way, you didn't waste your money.

I only saw his television show twice, and he was pretty annoying on both episodes that I saw. It also bothered me that he kept telling the people that called into his show that they had "stupid ideas" or did "stupid things" or made "stupid mistakes."

[NewMrs.]

In terms of how much debt we're talking about here, it's much greater than what sets off alarms in most people and entirely student loans (anyone who has considered or attended professional school may have some idea of the staggering debt graduates can potentially leave with).


You don't have to say, but I'm guessing its somewhere in the six figures. There were people who posted on this board in the past with that amount of SL debt, and I've seen people on other money boards that I visit post figures in this range as well.

I just want to let you know that I feel for you. My FIL is almost 60, and he is still working on his PhD. (He is an assistant professor right now and is ABD.) I don't know exactly how much debt he has, but I know that he does have SL's.

[vinsanity]

I am realizing that is true. (So much for the feminist notion of buying a place alone.)


True. If I were to compare myself constantly with my former classmates, especially those in my city, I wouldn't bother getting out of bed in the morning.

As long as things aren't dire enough to call Consumer Counseling Services, you will somehow survive.



lol, I had to run for shelter under Consumer Credit Counseling about 7 years ago; I had to get bailed out before it was the cool thing to do :redface:

But somehow, I survived. I was even granted a hefty sudent loan, which I'm actually ahead of schedule in paying, thanks mostly to low interest rates. I might even save up enough for a down payment on a home sometime this year.

So yeah, even CCCS isn't the end of the world; it's purpose is actually to be the opposite :)

[Echo]

Like most people I'm in debt too. I have the equivalent of $28k (£14K) in student debt which, I'm told by the government, won't affect my credit-rating when it comes to getting a mortgage for a house, and I won't be expected to pay it back until I'm making £15,000 a year when it'll be automatically taken out of my pay. If I'm 65 and still haven't paid it back back in full, my student debt will be wiped out. That's the way it works over here and it's good that I won't take it with me to the grave, so to speak.

But I'm annoyed that I'm not making £15,000 a year (because I only work 39 weeks a year and it's low-paid work) and so the monthly interest on my loan is something like £50 - or £600 a year or more.

I also have a bank overdraft which I'm slowly but surely paying back. In a way, having a bank balance in the minus hundreds has been a blessing in disguise - it's made me more hard-working, and in looking for a random job to work to pay off my debt I've found a lovely job that I'm really satisfied with - so my quarterlife crisis is kind of gone now.

Nowadays I spend very little on luxury items (I don't count paint brushes, books and canvas boards as luxury, but they're costly nevertheless) and have a better work ethic (i go to work every single day without complaint) and so I should be able to start paying off my student debt in a couple of years' time when I have progressed onto a better job within the field of education.

Good luck to everyone else who's busy paying off their debt, let's all work to pay it off once and for all.

[wordsmith]

lol, I had to run for shelter under Consumer Credit Counseling about 7 years ago; I had to get bailed out before it was the cool thing to do :redface:

But somehow, I survived. I was even granted a hefty sudent loan, which I'm actually ahead of schedule in paying, thanks mostly to low interest rates. I might even save up enough for a down payment on a home sometime this year.

So yeah, even CCCS isn't the end of the world; it's purpose is actually to be the opposite :)

Yep, I've knowns people who went the CCCS route, and it was the best thing they ever did.

[Carrie0930]

I am in the same boat as many of you here. I have two student loans, 1 federal (about $16,000) and one private (about $100,000) and about $8,000 in credit card debt. It is really frustrating sometimes, since I'll be paying until 2037 unless a large windfall lands in my lap. I am not sure why I always hear the average student loan debt is around $20,000, since everyone I've ever known has had much more than that. I'm not sure how people do it. I am currently trying to pay down my credit cards and then I guess I'll pay more towards my student loan debt, trying to at least get rid of my federal loan (which has a fixed interest rate of 6.75% while my other loan is 3.75%). I also consolidated my loans about a month before Sallie Mae discontinued it, because it was financially unwise, which I did not realize at the time. Now I live with my boyfriend, who pays the rent, so I can afford my $718 student loan payments, which I know isn't as bad as some, but I don't see how we would realistically be able to buy a house for at least 5 years (I'm 24 now) and we would only ever be able to afford a house in an area that is much more affordable than where we are now (MA). It's really distressing. Plus, all that debt is for just a Bachelor's in liberal arts and I went to state school the first year of my degree. So I make $40,000/year without prospects for making much more anytime soon. So 36% of my monthly pay goes to my student loans with my credit card payments eating up the rest. And I haven't even thought about how I would save for retirement or pay for children. So I don't know how people do it.

[vinsanity]

I am in the same boat as many of you here. I have two student loans, 1 federal (about $16,000) and one private (about $100,000) and about $8,000 in credit card debt. It is really frustrating sometimes, since I'll be paying until 2037 unless a large windfall lands in my lap. I am not sure why I always hear the average student loan debt is around $20,000, since everyone I've ever known has had much more than that. I'm not sure how people do it. I am currently trying to pay down my credit cards and then I guess I'll pay more towards my student loan debt, trying to at least get rid of my federal loan (which has a fixed interest rate of 6.75% while my other loan is 3.75%). I also consolidated my loans about a month before Sallie Mae discontinued it, because it was financially unwise, which I did not realize at the time. Now I live with my boyfriend, who pays the rent, so I can afford my $718 student loan payments, which I know isn't as bad as some, but I don't see how we would realistically be able to buy a house for at least 5 years (I'm 24 now) and we would only ever be able to afford a house in an area that is much more affordable than where we are now (MA). It's really distressing. Plus, all that debt is for just a Bachelor's in liberal arts and I went to state school the first year of my degree. So I make $40,000/year without prospects for making much more anytime soon. So 36% of my monthly pay goes to my student loans with my credit card payments eating up the rest. And I haven't even thought about how I would save for retirement or pay for children. So I don't know how people do it.

A lot of state schools are cheaper, some students have assistance from grants and parents, and a few like myself transfer in from a jr. college.

[wordsmith]

I borrowed less than that and I DIDN'T go to an inexpensive public school. Grants and scholarships made all the difference in the world. My alma mater at full sticker price, with only loans to pay for it, would have cost around $100K. But due to the awarding of money I don't ever have to pay back, it ended up costing me less than a quarter of that. Better than I made out at any of the state schools I looked at.

[redav]

A lot of state schools are cheaper, some students have assistance from grants and parents, and a few like myself transfer in from a jr. college.
My total undergrad college expenses (tuition, fees, books, etc) was under $20k. I never lived in a dorm, which saved significant money. Rates have gone up significantly since then, though--a bit over 2x, IIRC. I was able to pay for my grad studies with what I was paid as a TA.

Because of the low cost, I didn't have to take out loans.

[ricotta]

With junior college and scholarships, I was able to do undergrad for about $3k. With grad school, about $25k.

My SO after grad school has just under $100k in SLs. We're trying to pay it off now, and I would be lying if I said I didn't think about it often. That much debt, even between two people, is a hard thing to manage. The private loans have a high interest rate, but we hope to have those paid off within a couple years. Thankfully, tax deductions on the fed loans make things a bit easier.

With job prospects the way they are now, however, I don't know what we'd do without two income streams. We barely put away any savings as it is. Forget trying to buy a house in the next 3 years. Education is supposed to open doors, but at least for 3-5 years it has just closed them.

I feel for anyone stuck with a lot of student loan debt. SL debt is all the more crushing considering the state of higher education in the past 15 years. A liberal arts degree isn't worth a damn anymore. Its been oversold for so long and continues to be. I cringe every time I hear someone call for more people to attend college. With student loans + the opportunity cost of missing years of full time paid employent, the payoff is low.