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Debt.
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I have around 50 thousand in student loans.
I sometimes wonder whether it was worth it, especially now that I live at my Dad's and make enough to pay the loans/phone/car insurance and keep a little to myself.
Debt sucks.
I forget who said it on this thread, but a BA is becoming a bit overrated. Maybe I'm cynical because of my personal experience, but I haven't found the cost to be worth my current situation.
But at the same time, I did enjoy myself while I was in college. Just not 50k worth it.
I sometimes wonder whether it was worth it, especially now that I live at my Dad's and make enough to pay the loans/phone/car insurance and keep a little to myself.
Debt sucks.
I forget who said it on this thread, but a BA is becoming a bit overrated. Maybe I'm cynical because of my personal experience, but I haven't found the cost to be worth my current situation.
But at the same time, I did enjoy myself while I was in college. Just not 50k worth it.
I have a huge debt that is very difficult for me to get out of. My husband and I owe about 70X our monthly take home payVery, very, very difficult situation for me.
Yikes! You should look in to a debt consolidation company.
I know of a couple people that have used Credit Solutions and finally got a handle on their debt.
I don't buy people things "just because that's what you do" anymore. If I can't afford or find a present someone might actually like, I just given them something more humble.
My car is paid in full. My computer is paid in full. The only debt I have is on my two credit cards, but the amounts I owe don't exceed the money in my checking/savings accounts. And of course, I don't own a house either.
My car is paid in full. My computer is paid in full. The only debt I have is on my two credit cards, but the amounts I owe don't exceed the money in my checking/savings accounts. And of course, I don't own a house either.
I may check into that. Right now I'm working with some of the creditors individually. Debt reduction is my #1 priority right now.
We currently owe less than a year's salary on a mortgage and home equity loan. Our house is worth three times more than we paid for it. No credit card debt (the interest isn't worth it)
We are trying to save 20% of our gross income to avoid taxes and build a nice little nest egg. We don't always meet that goal but are trying.
No student loans ever. Worked our way through college taking scut jobs and when my husband was in graduate school he was a math teaching assistant and I had two jobs. We've worked for everything we have.
We don't have a huge house but a remodeled Craftsman bungalow which we mainly did ourselves. We live in a nice residential neighborhood with sidewalks (we like to walk) and only buy nice used cars. We made all the classic money mistakes when we were younger but seem to have it together now.
We are trying to save 20% of our gross income to avoid taxes and build a nice little nest egg. We don't always meet that goal but are trying.
No student loans ever. Worked our way through college taking scut jobs and when my husband was in graduate school he was a math teaching assistant and I had two jobs. We've worked for everything we have.
We don't have a huge house but a remodeled Craftsman bungalow which we mainly did ourselves. We live in a nice residential neighborhood with sidewalks (we like to walk) and only buy nice used cars. We made all the classic money mistakes when we were younger but seem to have it together now.
That's awesome that you're taking charge and trying to remedy your situation.
In my business I see a LOT of people with debt problems, and it seems so many of them just give up and dig the hole deeper, so it's great to see someone who is actually making an effort. Kudos to you!
I was agreeing with you up until the last part.
I'm no financial planner, but it's always seemed to make more sense to me to purchase a house that you can afford and pay off within a reasonable amount of time than to always rent and never own.
I guess for me, at the end of the day, knowing that I have the house as an investment to give to my children or relatives makes it worth it.
Good for you! I'm glad to see you taking charge of getting it under control.
One thing I would stress with regards to the debt consolidation is to make sure you use it correctly. When I took a financial planning seminar after I graduated college I heard lots of stories where people had gotten their monthly debt payments reduced by X hundreds of dollars and all of the sudden thought that they have just that much (or more) to spend each month, thus getting themselves into greater debt. Consolidation can be a tricky thing if you aren't careful to keep your spending habits in check.
I totally agree. IMO, mortgage debt is one of those justifiable debts just because of the equity you get (not to mention the tax breaks on the interest). In the long run, the equity you accrue can be included in your overall retirement assets (assuming it gets paid off or is worth more than what you have left to pay).
Sorry, I'm just trying to figure this out. If you owe 70X your monthly take-home pay, and all of the loan things I've seen require making payments of 3% of the principle per month, then that's still 2.1X your take-home pay. Have you found something that doesn't require the 3% minimal payments, or are you just falling further behind?
I would say further behind --- but because I have no more credit available to me, the only way I'm falling behind is by not paying some bills. I have to decide every month which bills won't get paid and which ones will.
My biggest credit card loan was reduced from 29% interest rate to a 2% interest rate by Bank of America. That was a HUGE help.
I'm in the process of selling my car, which will give me a profit of about $4,000 to buy a car outright.
My student loan is on a special deferment for 3 months because of a change in income.
So that leaves me with the mortgage, home equity and 1 car payment that I am paying the same as always for.
I've also gotten rid of extra's like cell phones and I am buying food that is much more economical and stretches further. My son's preschool is giving me full tuition credit for work done around the school, which is also a very big help.
I have no credit card now, so whatever we need, groceries, bills, gas etc. ALL has to come from our paychecks.
Apologies, as I don't know what country you are writing from. But in this country, not buying property is, for my generation, a fate which is almost forced upon us. If I fast forwarded a year, in my first proper job as a graduate earning the average starting salary (£18-23,000), living in London, and I was looking for my own flat, I would have to take out a mortgage around 10x my salary!!
Now, I don't care about how buoyant the property market may be, what a great investment for the future it may turn out to be, or leaving something behind for relatives or kids, if I took out a debt like that, I would not be able to sleep at night. If I ever lost my job, I would be destitute. If the housing market crashed (and who's to say it won't?), I would be throwing money down the drain (much more than the equivalent 'waste' you pay when you rent). Furthermore, if I bought a place, it'd be much worse than a place I could afford to rent.
The idea of property ownership as a signifier of wealth or comfort is an outdated idea for my generation. The baby-boomers got there before us, and royally screwed us over with their second homes and rent-to-buy investments.
It's pretty much the same way in major US cities.
£23,000 = US$45,392
10 x $45,392 = $453,920
$453,920 can be pretty low for something right in NYC or Chicago.
Surely there are other areas of your country that you could find an affordable house, no?
Depending on where you are in Chicago 453,920 can get you a killer house or condo. My wife & I bought a huge loft in the south loop for just a little more than that. 2 BD+den, 2 BR, WBF, 2 indoor garage spots, huge porch and private rooftop deck to boot. You can get decent 1-2 BR spots for $225-350 easily. What kills me is how long we pissed our money away on rent when we could have been building equity.
That said, we've been religious about not accumulating debt. If there's anything on the credit card it gets paid off right away. Car was paid for in 6 months as well. The only debt we have now is our condo and that we're double paying every month.
I agree. I don't understand the infatuation with house-ownership in this country.
(If I see anymore 'Relocation, Relocation, Relocation' where the presenters have to 'struggle' to find a property in some city, plus a place in the country for a 'paltry sum' of £750,000 - £1,000,000 I think my head will explode. But I still watch it because one day Phil and Kirsty will have a real challenge of finding a first time home for about £40,000.
)
$453K? nice little 1900 sq. ft. house in Bridgeport. Or maybe a 3 flat in Bucktown.
We're looking to spend about $350K for a shack somewhere in the near west side or southside in 1.5 yrs
I'll give you an example from my own credit experience to explain what I meant.
Let's say I owe $1000 on my credit card, and it charges 16% interest per year, then (depending on the compounding), we'll say that it charges 16/12 or 1.333% interest per month. The interest itself amounts to $13.33. But, the minimum monthly payment is 3%, and has nothing to do with the monthly interest rate, except that it has to be larger. So, my actual minimum payment would be $30, and not $13.33. This means that I'm forced to pay down the principle by (30-13.33) or $16.66 this month. I think it's part of some law here in Canada that you can't just charge interest, but have to force the borrower to pay down principle as well.
Is it different where you're from?
Gotcha. I can understand your situation completely. I lived just outside of London for two years and my parents and I were astonished at the cost of real estate in the United Kingdom and Europe in general. Is that due to taxes or just a high demand for property (e.g. not enough land for everyone, so the cost increases?)
As someone else has pointed out, the starting salary in the UK seems to be close to the starting salary in the States (where I am posting from) but the main difference is the availability of fairly inexpensive property and land, especially in the state that I'm from, Texas.
For instance, with enough searching, an individual in Texas could purchase land for about $8,000-$10,000 per acre. That's just the raw land, but it usually has water and electrical hook-ups. Obviously, planning and building a house increase the final cost, but it's not uncommon in Texas to have people buying several acres with a very comfortable house.
Granted, many locations in the United States, especially around major urban centers (e.g. Chicago, New York, San Francisco, etc) don't have land in abundance, and thus property prices are much, much higher.
I can definitely see the case for renting, especially if you are living in a larger city because of your profession. But due to the availability and relative affordability of land and houses in the United States, home ownership has become a fairly common goal for many families, hence the large and rapid growth of the suburbs outside of the cities.
Again, speaking from a Texas perspective, I believe there is a law that allows you to declare your house as a "homestead" so that if you lose your job, and aren't able to make payments, the bank cannot seize it for a certain amount of time. This is intended to allow you time to go find another job without forcing you and your family from your home.
I can definitely understand the fear of having that much debt, especially with job security as shaky as it is these days, especially for people just entering the working world, but you'd also have to take into consideration that the majority of American's purchasing homes tend to be further along in their life, usually around 35-40 years of age and thus are less likely to switch or lose their jobs. By that point, most people probably have some savings to tide them over if they did lose their jobs, so again, home ownership and the debt that goes along with it, isn't too big of a concern.
I guess for me, a home represents more than a montetary investment, although it certainly represents one for many individuals. Honestly, my family has had a 150 acre farm in Ohio for the last 75 years that has been passed down from generation to generation. It's completely paid off and if anyone ever needs to retire, they can live out there. I'd tend to think of a house, not as something to be flipped to make a profit, but more of a gift and a legacy for my children to have something to call their own when the time comes. There's nothing more secure than having a property that is completely paid off and that you hold the deed to.
I would assume that we're both fairly close in age...I'm 20, but I'm definitely looking forward to purchasing land and building a house.
haha, I was about to guess that! not that I'm too close to college time, but I have been thinking about Brown, and was wondering if they had any joint programs with risd. it'd be fun to take one or two classes.
anyway, no debt here, I'm 13!
I still live at home, but I have no debt at all. £400+ in the green.
Doesn't sound like a lot I know, but I have lots of nice stuff all bought and paid for, 360, Macs, Car, Phone, etc. All owned by me. I work hard for my money like, 7 days a week, but it has to be done I guess.
I work Mon-Fri and don't get paid, but thats for me dad and I have my hand in a pretty successful company, so really a percentage is mine and if I ever need money for anything I get it. So basically its as good as money in the bank.
Doesn't sound like a lot I know, but I have lots of nice stuff all bought and paid for, 360, Macs, Car, Phone, etc. All owned by me. I work hard for my money like, 7 days a week, but it has to be done I guess.
I work Mon-Fri and don't get paid, but thats for me dad and I have my hand in a pretty successful company, so really a percentage is mine and if I ever need money for anything I get it. So basically its as good as money in the bank.
I'm afraid there isn't any quick and easy schemes to pay it off. I ended up owing about 1.5 times my annual salary. It took me 3 years to pay off
Work out exactly what is coming in and what's going out. You'll be surprised how much is spent on lunches and junk food - it could add up to £100 a month. Tighten the belts, cut down on nights out, eating out, luxuries like CDs, DVDs and new iMacs.
I talked to my creditors and asked them not to give me any more credit, and agreed a monthly payment with them. Ended up paying out about a 1/4 of my wages every month.
But I'm now debt free and it's brilliant. Eventually made a killing by selling my flat, but that was pure luck.
Work out exactly what is coming in and what's going out. You'll be surprised how much is spent on lunches and junk food - it could add up to £100 a month. Tighten the belts, cut down on nights out, eating out, luxuries like CDs, DVDs and new iMacs.
I talked to my creditors and asked them not to give me any more credit, and agreed a monthly payment with them. Ended up paying out about a 1/4 of my wages every month.
But I'm now debt free and it's brilliant. Eventually made a killing by selling my flat, but that was pure luck.
Thanks, I see what you mean. I am not paying all of the bills every month. For example, my electric bill - they let you go 3 months with no late fee to pay your bill until they shut off your electric. I paid them last month, so I know that this month I will not pay them. I always pay my mortgage payment, and there are months I do not make my credit card or other loan payments. Not great for my credit rating, but what else can I do?
Debt can be a terrible thing to be under.
Check out Finish Rich dot com
He has some wonderful ideas on how to change your financial life around including getting out of debt.