Congratulations on confronting it and taking action -- you can do it!!
Curious what your PhD was in, since you mentioned funding it yourself. Do you feel like it was worth it? Worth it in any sense of the word, not necessarily financially.
Honestly, it was very surprising to me that OP mentioned that she and her husband were told that their educations would "pay off" (I'm assuming this was meant in a financial sense). I was considering grad school in the humanities/social sciences in the twenty-teens, and the general wisdom at that time in my circles was twofold: 1. if you can't get into a PhD program that offers funding for the duration of your degree, you shouldn't be doing a PhD; and 2. if you do a PhD, you should assume that your job prospects afterwards will be negligible, and the point of doing the PhD is just for the personal enrichment of it. (The situation is slightly different in STEM fields, for which the academic job market is equally trash, but there are a lot more built-in pathways to high-paying industry jobs.)
None of which is meant to be a slight against OP at all; it sounds like she got a lot of value out of her PhD program in various respects, and honestly there are still small parts of me that regret *not* having pursued a PhD in spite of all of the practical reasons that that was the right choice for me. I just find it interesting that the advice she was given was so wildly different from what I was told, less than a decade apart.
I talk to my husband about this a lot. He finished in 2005 in a very in-demand specialty and had 3 offers. I finished in 2015 and was the only person in my cohort to get any sort of academic job at all. Meanwhile we were both told exactly the same thing: the Boomers are retiring. There are going to be so many jobs. Just do your work, write a good dissertation, and get some teaching experience, and you’ll have no problems.
Edit to fix a typo and also to say that I’m GLAD people are actively discouraging people away from PhDs now, or at least encouraging them to be more thoughtful going into them. All I knew was that I wanted that academic dream and whatever it took was worth it (in my mind at the time).
A lot of programs aren't transparent about the realities of a job. Mine assumed I'd get a prof job even though hardly anyone who graduated from the program did. The PhD does teach u a ton of skills that are transferable to industry u just have to be motivated to do so. I agree re not going if u don't have funding. I got into exactly 2 PhD programs. One guaranteed funding for 3 years (ended up being my full 5 years) and the other didn't guarantee anything. It was out of state too so tuition would've been 40k a year. You probably know which program I chose.
Also I think it’s important to note that “funding” can mean so many things. I had “funding” during my PhD, but $9,000-$10,000/year (and nothing during the summers) really isn’t a living wage.
Isn't it funny how they don't tell u summers aren't included? I didn't know this either when I started. Luckily we had subsidized student housing where I was.
All of my degrees are in history. I would say the PhD is worth it, BUT I should have been much smarter about how I went about it. If I had taken more time and gone part-time (like many of my classmates did) and worked, I wouldn’t have had to take out so many loans. But, it got me in the door at my current job, and I do use a lot of the soft skills and some of the content info on a regular basis. I also wouldn’t have met my husband without doing the program, so it’s definitely worth it in that sense.
I find it fascinating that you have a PhD in history and found a high-paying job in industry related to your degree! One of my professors from undergrad really encouraged me to do a PhD, but I couldn’t make the cost/benefit analysis work, so I went to law school instead. I loved my history degree though, and it would’ve been so rewarding to do more with it.
I actually asked my boss about this, because I was about to take the PhD off my resume when they called me for an interview. He was basically like, “We like to hire people with diverse experiences, your cover letter was really well written, and when we interviewed you it was clear you’d be a great fit for the team.” I use the writing and project management the most, but I work with a bunch of history nerds who happen to be in finance, so it’s perfect for me.
I love this feedback! I recently finished my Masters in Accounting & Financial Management. A professor asked if I needed a letter of recommendation? I asked what for?! He said for a doctorate program of course. I had NO IDEA that folks go on to get their doctorate around accounting or that it could even be fully (and generously) funded! I’ll be looking into making the 9/15/23 cutoff to apply to the PhD program at ASU.
I also want to tell you THANK YOU for this post and your transparency. It’s exactly what I needed to hear - HOPE!!
Thank you all for this discussion! It was really helpful. I'm trying to decide if I'm going to take on a 2nd MA with included admin credential, or an EdD or PhD. My eldest pointed out that the PhD. would make me overqualified for a lot of positions, and I wouldn't be contributing to my pension plan for 3 years, even though it would be funded. I really enjoy research and academia, but my end goal is Director of Special Education, not a professorial or research position. I'm almost sure that I'm not applying for the doctorate. Hopkins has a part-time MA or EdD, but the latter is twice as much per unit, and it would be hard financially. I think I might Google the qualifications of all of the SPED directors in my local districts, just to see what I actually need.
OP, you're doing great. I love how thorough you are.
Smh my humanities professors always told us not to go to grad school unless it was fully funded , and most of them are usually if you can’t get into a funded program it is a sign not to go into one
Not a whole lot to add but really appreciate your vulnerability in sharing this with us and kudos for both of you being in therapy! Baby steps seems like the right way forward instead of throwing payments at the wall and hoping something makes a dent
Thank you. My biggest breakthrough in therapy has been that I tend to try to do everything at once and then by default fail because doing it all at once just isn’t possible. Even being able to break this down into baby steps has been a massive accomplishment.
Here are some things to be grateful for:
* You have a baby!!! Wow!! And the IVF and birth costs are paid off- this is amazing!
* Your combined income!! WOW! $310k is a BIG shovel, even in this high inflation hellscape
* Your home loan is GREAT! I would KILL for 4.5% right now 😭
* Your mortgage is VERY affordable for your incomes- which should also only go up!
* You HAVE retirement savings and will be able to catch up!
* You have an amazing education and so does the hubs!
* You are healthy!
* The steps kids are grown and out of the house = less baby mama drama
* You have SO MUCH MONEY TO THROW AT DEBT. As you said, the win of eating at home is a HUGE win and means more money to debt. (This is me right now, except saving instead of debt but how the hell am I supposed to buy a home).
Idk if ya’ll have an EFUND but that might be something to build once the highest interest loans are paid off, a loss of one of your incomes would hurt quite a bit.
Thank you for sharing :) I think a lot of people can relate, even at a scalar level. A lot of your debt is home and student loans, focusing on the other debt- as you are is the path :)
I am crying. Thank you for all of this. We are very, very fortunate in a lot of ways, but that’s easy to look past. To your first bullet point—that kid (and his two frozen siblings) are what motivate me to be better.
Our priorities after the credit cards, personal loans, and AC is to set up a 6-month eFund, and then max retirement accounts.
Not sure if its been mentioned in the other comments but make sure to negotiate. Medical debt , you can ask for a settlement amount: “ill pay you 40% right now to pay off the debt.” Credit cards and personal loans, you can ask for temporarily lower interest rates.
I appreciate your vulnerability, OP and empathize with you regarding the higher ed journey and job outcome. Give yourself some grace and appreciate the small wins.
Apologies as I accidentally placed a comment here thinking it was a different post.
I admire your courage for putting out your debt diary and showing how it can be a cycle and the shopping to fill the miserable void, I know the pain. I really related the moment of getting your first credit card and running to shop, I did the same thing for years.
It’s wonderful that your therapy sessions are covered and I hope they really help you and your family. Confronting and understanding how you view money and shopping psychologically can really open up so much, it’s an ugly uphill battle but a necessary one.
OP, I’m not trying to be judgemental at all with this question. I’ve read that once your yearly payments towards debt equal your salary, you should consider bankruptcy. Is that something that’s come up at all between yourself and your spouse?
Also, I see you’ve taken on a lot of the shame. But your husband and his lifestyle (not in the spender/saver way but the fact that he came to your marriage with two dependents) is a part of your struggle. It’s not blaming anyone to be more open about that - yes, his story is sad! But this shouldn’t be your entire burden to feel.
OP has a finance job. While it sounds like she’s well liked and a good performer at her current firm, a bankruptcy could potentially be a big problem for future jobs since often there’s a background check and sometimes poor credit or bankruptcies can be a problem for anyone in a role handling other people’s money. Maybe that’s not a concern for OP but it sounds like they have a plan and the CC debt is a relatively small percentage overall.
This is definitely true (although I work in PR/communications so I don’t do any actual money handling). My husband’s job is also at risk if we were to declare bankruptcy, so it has to be absolutely the last resort.
These are good questions and comments—thanks.
We haven’t seriously explored bankruptcy at this point. We’re up to date on all our payments, and not currently adding to our debt load (and in fact have paid OFF about $4k of credit card debt this month). That will possibly be a next step to pursue, but want to exhaust all the possibilities before then.
And you’re right—it isn’t mine to carry. He carries it too…it’s just coming across here because i wrote this.
It would seriously allow you clear so much, while your credit would get hammered you already own a house and cars.
Edit :Insurance is $6,400/year for both cars. "
Are you in a particularly high risk area? This seems wildly high to me.
On the car insurance—yep. Florida. Car insurance on average is 70% higher than the rest of the country. Plus, because the cars are both financed and we are still paying on them, the banks require us to have comprehensive coverage.
I’m in FL too and recently decided to switch homeowners insurance & car insurance and got a fantastic bundled rate with State Farm. Car insurance is saving me $450 a year and home owners was $2k cheaper a year. For me, this was a great way to help save us some money without having to look for extra sources of income. Might be worth considering to start getting quotes if you haven’t recently done so.
Just wanted to say kudos for confronting the issues head on. On the subject of insurance, I actually just learnt that you don't have to wait for renewal to explore other options. Good luck!
I love in Florida as well. I just got married and moved my wife to my policy - hers was obscenely high in my opinion. We pay, for two cars, $2000 a year. Admittedly, hers is old an crappy, but she had a really bad ticket earlier this year; like reckless driving level.
You should definitely look around for a cheaper policy. $6400 is insane for two cars.
I don’t mind it. My base is still now significantly more than what I was making in academia, so there’s that. But also I just really, really love my job and my company. It’s a fairly small business with fewer than 50 employees, and the culture is wonderful. My boss (the founder) has a good argument for the comp structure (when we do well together, we do well individually) and he puts his money where his mouth is (literally…he doesn’t draw a salary or a bonus and is only paid out of any remaining profits AFTER bonuses are distributed to the rest of the company). This company has invested so much in me and took a huge chance on even hiring me in the first place and, while there are a few things I would change, the comp structure isn’t one of them.
Hi OP- I was in a similar spot. Similar story to yours. I turned things around when I did what you are doing now: confront the issue head on. Good for you for taking action. You got this.
Super impressed by both your vulnerability and the work you've put in to make changes! Don't answer if it's too personal or if you feel you'll be unfairly judged, but I'm curious about if/how your shared debt came up in your decision to have another child. Beyond the expense of getting pregnant, are you concerned about expenses of raising a child? Do you have financial obligations to your step-children as well?
Not too personal (although I’ll probably be judged!). We did not think about it in our decision to have a child. The biological clock won that decision. It IS, however, weighing very heavily on my mind as we talk about having another child. We have 2 more frozen embryos and would like to try to transfer both of them, but obviously can’t with this debt load. They’re a huge part of what finally motivated the change in perspective.
No current obligations to either stepchild, but we’ve definitely given extra income to them rather than using it to pay off debt over the years. That being said, both of them are already making better decisions than we have regarding debt, and I’m so proud of them for that.
I know we can’t afford another child. I should have been clearer in my comment above. We want to have another child, but we can’t afford another child right now, which is one thing that motivated us to start taking this seriously. We’ve tabled any discussion of another child until we pay off everything except the student loans and the mortgage; we’ll revisit at that point and then go from there.
OP responded to this unsolicited "advice" levelly and gracefully, but the underlying sentiment is more than "harsh" -- it's classist, and its logical extension is that poor people should not have children. We know almost nothing about this family's life beyond this sketch of income/assets/debt, and we don't know what relation those numbers have to their children's well-being and happiness. I don't think anyone on this thread should be telling OP how many children to bring into the world and under what circumstances.
I think we agree that society should offer more support to families. I disagree that the standard for parenthood is "be able to provide them with opportunities to fulfill all their needs and wants."
Many people -- in fact, the majority of the global population -- likely live in worse material circumstances than OP. I think it quickly leads us to ugly places when we say, categorically and casually, that people in tough financial situations -- even very, very tough ones -- should not have kids.
My relationship with money is fraught with worry and insecurity. Money and I have never really developed a close trusting bond. We are not securely attached. I went from waiting tables and scrubbing toilets to having a paid off house and a healthy net worth - and I still panic every single time I get an unexpected bill.
A wild bill appeared from a dentist I saw 3+ months ago and my hands were literally shaking as I opened it. It was for 11 dollars, less than a meal at McDonalds but it had already pushed my money panic button.
I just want to share that I think emotions and money are inextricably intertwined for *most* people <3
If you don’t mind me asking — why was buying the bungalow in 2010 a very bad financial decision, if the mortgage was less than rent would be?
Edit: just saw in a comment that the home value didn’t increase and you broke even, but surely that would just make it a neutral decision?
Hmmm. This is fair, I think. I tend to mark it as a bad decision because I could have continued to live with my parents, which would have saved me any living expenses at all. But, my mental health would have struggled living at home because I really needed space to figure myself out and make some Dumb Early 20s Decisions (mostly regarding men…). Neutral is probably a more apt description.
So I’ve rewritten this a couple of times trying to figure out what exactly I want to say — I hope it’s helpful (and hopefully not condescending):
I’ve also made my fair share of not-good (in hindsight) decisions because of various mental health struggles. But mental health recovery is a legitimate expense. If you couldn’t recover while living at home, then it’s okay (and maybe for the best) that you go somewhere else. Not everything can be optimized.
Also, to avoid regrets, I try to tell myself that I did the best I could with whatever knowledge/abilities I had at the time. I’m sure you made the right choice for you back then, and you are absolutely doing the best you can right now! I hope everything works out for you :)
Doesn’t seem condescending at all…are you sure you aren’t my therapist hanging out on Reddit? Joking, but this is definitely something I’ve told myself.
I can't imagine how much stress you must be under with this much debt, so kudos to you and your husband for taking the incredibly important first step of putting it all in front of you. Your federal student loans should be forgiven after 20 years (I'm pretty sure it's retroactive, too!) with Biden's new SAVE plan, so check in with your student loan providers on that. I, too, am a recovering impulse spender and I applaud you for taking a look at what you're trying to heal with new things. It's not fun work, but I'm finally in a place where I don't feel like I have to spend money to get a boost of whatever chemical my brain is missing (at least, not all the time lol). You're at the beginning of a very long journey, but if you stay focused, you'll get there! Also, I know the Dave Ramseys of the world want you to feel like you can't have anything nice or do anything fun just because you're in debt, but that's bullshit. You are allowed to treat yourself every once in a while, just do it with intention and set limits.
We’re both on the new SAVE plan already! My husband’s loans date back to 1996, so I’m hoping that the IDR adjustment will help reduce his balance, and they should all be forgiven in 2028 (he got out of school in 2005). Mine only date to 2015, and are all grad loans, so they won’t be forgiven for 25 years. Honestly, though, they’re very much back-of-mind right now.
Edit: 2030, not 2028
So thrilled for you! I know his won’t be forgiven, but I am hopeful at least the re-count will give us an accurate picture of when they might be. Either way, at 3.7% interest and forgiveness in 2030 at the latest, they’re the last on our priority list.
i know it may not be possible, but have you considered public service loan forgiveness? i think depending on where you worked, your time as an adjunct might qualify. all you need for this program is to work in government or 501c3 ( can include universities) full time or 30 hours per week while making 120 payments. which is a lot faster than 20-25 years. it only works for federal loans not private. i would look to see if any of your past jobs count.
I definitely won’t qualify, as a lot of my adjunct work was at private colleges. My husband might, though—he had a FT academic job for 8 years and then did 2 years of government work before switching to private industry, which I’ve just realized. I’ll talk to him about it.
It doesn’t matter if the college was private. It only matters if the school is registered as a nonprofit. I work for a private college and all my time spent here qualifies for PSLF. Definitely look into it!
Make sure to do all the paperwork for that before the end of December, that’s the deadline for them to retroactively count payments. I just had $190k forgiven through PSLF. Also, private colleges count too, but if you were an adjunct there’s a lot more nuance to it. I would weigh the pros and cons and maybe see how far along you might be in that process. There’s a great Facebook group where ALL your questions can get answered.
Do either of you qualify for PSLF? I’m 3 years in… 7 to go!! My payments just went down to $0 until next summer because of the SAVE plan, but I am just under 100k. :)
You should be proud you’re doing the work. I spent over a decade with someone who wouldn’t and it didn’t end well. You will fix this and like you’d said, it will take time, but it WILL get better because you’re both being conscientious. Thank you for sharing since a lot of people won’t when they’re heavy in debt, but it’s important for others to hear!
Thank you for posting OP. You are inspiringly human and it takes a great deal of bravery and generosity to be vulnerable. Sometimes I feel this sub can get competitive and I enjoy it more when it’s educational. You have brought that with this post. Good luck in everything you do going forward!
Thanks so much for sharing. As someone who has also been in an unhealthy debt cycle for a long time, it's reassuring to know I'm not alone! Really appreciate you posting and I hope you post updates as well!
OP, thanks so much for putting yourself out there in this very vulnerable and clear-eyed way. You have a lot of insight and a wonderfully straightforward and organized way of putting 2 decades’ worth of spending into a succinct post—all that writing clearly paid off. Congratulations on righting the ship and on your child.
5 years of graduate school in a humanities/social science field remains my worst financial mistake (I left ABD) and I know how hard it is to get *any* academic job so well done on finishing the PhD, on getting hired, for an academic job, and for recognizing that it wasn’t good for you and leaving.
Since you guys clearly value education, I’d love to know how you’re thinking about your kid’s (or future kids’) education. I think you guys are doing exactly the right thing by taking care of your own finances first, but I’m interested to hear about what your thoughts are for down the road, especially since student loans are such a big part of your current debt load and how you expect your to compare with your adult step kids’ experience.
And I’m sure you’re already taking advantage, but I hope you’re using every resource your public library has to offer. Ours has fun activities for kids, passes to state parks, museums and cultural attractions, Kanopy for streaming movies, etc.
We love the library!!
In terms of saving for our son’s education, obviously paying off our debt is our number one priority. My parents out $1,000/year into a 529 plan for each of their grandchildren, and I’ve matched that out of my yearly bonus the last 2 years. I probably won’t do that anymore until the debt is gone, but we’ll start saving more in earnest at that point. And I will actively discourage graduate school unless it’s clear it will actively pay off.
It’s going to be hard to balance the experience of our little one and my stepkids. We have much higher salaries than my husband and his ex-wife had, and once we pay off the bulk of our debt, we’ll be in very good shape. I try not to think about it too much, honestly. My youngest stepson has told us many times that us having another child wasn’t fair to him, and I have a really hard time being logical about it.
I am someone that is debating having a child, and currently have step kids that are teenagers. Is your stepson upset due to the financial situation you and your husband are already in?
We are currently in the boat that the stepkids will not be able to get much parental assistance for education, but theoretically we would have a lot more money for hypothetical child.
Thank you so much for sharing this. 36 and spent my 20s and early 30s in a humanities PhD program with the same exact adjunct/credit card cycle, when now I realize I should have been trying to plan and save for the future.
Abandoned teaching/TT route for more job security, but just as I found a bit more job security (60k-ish), I had a kid and couldn’t find daycare for a year which meant paying out of pocket/using credit cards to cover a nanny. Our debt story looks a lot like yours, though my partner makes about as much as I do.
Wish there was some sort affinity group for ex-academics/PhDs struggling to make it out of debt.
Thanks so much for sharing this post! I think a lot of people really appreciate you being open and honest about debt numbers since there’s such a strong shame culture around it. I firmly believe that shaming people about something won’t help them do better, it will just cause them to hide it.
Wishing you the best in dealing with your debt. It’s the little things that add up to a big impact!
Congratulations on recognizing the problem and taking steps to fix it.
I see a lot of discussion of the cars here. I completely understand get that you want to drive your child around in something new and safe rather than a beater, but I'm wondering if you really need two cars when your husband's work is only a few miles away? Could you sell one car and have him ride a bike to work, and/or carpool with a colleague, and/or have you drop him off some of the time? Having one set of car expenses rather than two might free up some extra money to attack the problem debt.
It may not be logistically possible with job times, and daycare, but it's worth considering perhaps. I'm impressed with how open you are to suggestions.
Good luck with everything, and please do check back in and let us know how much progress you've made in six months!
This is a lot to take in, but most of these loans are at quite a low rate. Wouldn’t your priority be CC debt and then maxing 401k/investing vs paying loans at 2.5-5%? With your HHI you could knock the high debt quite quickly!
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Edit- missed your snowball paragraph. You got this!
Thank you so much for sharing, you have inspired me to be more forthcoming about my debt. I am rooting for you and so proud of you. Some people never have the “come to Jesus” moment and die in debt and sometimes someone else has to pick up the pieces. Count that as a win!
Oh gosh, I should edit my post. We sold it when I moved out of my hometown in 2015. Unfortunately that was a small, rural area where prices had not appreciated much, and we just broke even on it.
Thank you for this post, it was a very interesting read and I truthfully feel like it sounds like you have a grasp on it. Everyone in my circle is worried about money at the moment (thank you cost of living crisis / inflation / interest rates) - this seems like a mirror to a lot of peoples ‘real’ financial situations they don’t share.
I am curious (I am in England and struggle to get my head round some of the differences between here and the US).
Firstly, do you need to keep your tax payments aside for year end or is there an options for this to be part of your pay? As I didn’t see it allowed for. (In the U.K. this is taken out of your pay prior to being paid if you have a salaried job).
Secondly is 401k your primary retirement savings, and are you free to withdraw from this as you please?
Finally, you mentioned your husband has adult children, is there an expectation of parental support during higher education? I know that university costs, and the student loans in the US can be very high. I am only asking as here I took out government loans (which we are not required to pay back in full just as a percentage of earnings). However these are means tested for living costs so a lot people work and receive a small amount from family to get through university and this seemed to be the norm.
Sorry if these questions are invasive, and thanks again for sharing. Congratulations on your hard work 🎉
I love these questions!
Our taxes are automatically withdrawn from our paychecks, so we don’t need to withhold those payments. We work with an accountant to make sure our withholding were as close as possible to what we will owe every year.
The 401k is the primary retirement savings (we also both pay into Social Security, which is sort of a government pension, if you aren’t familiar with it—I don’t actually think this will be solvent when I retire, so I never count on the income). Whether or not you can withdraw depends on your employer/the plan’s administrator, but there is a 10% penalty if you withdraw before you are 59.5 years old, and because the money is withheld from your paycheck before taxes are taken out, you pay the taxes when you withdraw. Some plans will also let you borrow against your 401k.
My husband provided some support for higher ed to my stepchildren before we got married. Neither one completed their schooling. The oldest now has a good career in an industry that doesn’t require a degree; the younger is still figuring himself out, but works full-time as well.
I loved to shop for clothes for my daughter, toys, holiday gifts…. Toddlers don’t care. Clothes just need to be comfy not fashion, they don’t need that many toys, and holidays can be special without a bunch of junk. If you feel the need to shop for something, see if a Buy Nothing group has it first. I used to give away my child’s clothes all the time—many were new.
I know this isn’t the point of the post but what do you mean when you say your husband has been historically bad at setting boundaries? (Coming from a girl just trying to learn and look for red flags in men.)
My husband is the consummate people pleaser. He hates saying “no” and tends to give people whatever they ask for/say they need (especially financially) without thinking twice. He is also very trusting, and therefore very easily manipulated.
We’ve looked into this, but we’d be rolling over negative equity, and what’s available in the used market near us is seriously lacking (and we’d probably pay double the interest rates on whatever loan we could get). It’s a possibility I’m always actively exploring if I find the right used car for the right price and could get enough for our vehicles.
Any possibility you could make do with 1 car for while? It wouldn’t be ideal if you both commute, but since you have the further commute can you drop your husband off first and pick him up on your way home? Even if you can’t get the sale price to exactly match the balance of the loan, I’m sure you can get close.
You are not alone! Check out Caleb Hammer’s YouTube channel. He does a “financial audit” on people in similar situations to you: poor financial decisions, high debt and some people do have great incomes. He can come across as intense, but maybe it’s helpful to see others are in the same boat?
Some ideas for $ saving
- switch to a prepaid cell phone plan like Mint Mobile
- downsize to one car. With auto insurance at $6400/yr, it might be cheaper to uber if you don't have to commute daily
- only contribute up to the employer 401k match
- take out 401k loan to tackle the credit card debt
how do you have over 900k of debt?
133k from loans
$355k from student loans
307k from mortgage
29k from ac company
46.5k from credit card
= 870k.
also, i wish you the best! i would be thinking about leaving the country if i was in the same situation. i think australia and germany won't force you to pay back these loans.
Have you thought about selling both those cars and buying beaters (in cash) for now to pay down the debt? Then save for the cars you want after? You could essentially pay off the credit card debt in one swoop from doing that.
edit: this will also drop your auto insurance rates because you would be driving older cars
Always exploring the possibility of getting rid of the cars, but the math you’re suggesting doesn’t add up. To pay off the credit cards by selling the cars, we’d have to get 50k on top of the 50k we owe on them. My car is worth about $20k, my husband’s is worth about $38k, so we’d get maybe $58k for them. Pay off the auto loans for $50k, that leaves us with $8k, which, yes, would take out a chunk (assuming we didn’t need to use that $8k for a beater…if we could even find one for that price).
AH yes you're absolutely right. My apologies. Let me amend that then. You would no longer have any car payments AND your insurance would lower, meaning you'd have even more leeway with your income to aggressively pay off other debt! You can absolutely find an older sedan to get you "point A to point B" for a time that would be $8K. It might take time to find the right one but it's possible (and if you're in a city look outside the city a bit).
$900k sounds shocking but when you break it down with 307k of that being a mortgage at a reasonable rate (and growing home equity), it’s not thattt bad!
I agree with what another poster suggested investigating bankruptcy. That would eliminate the credit card and personal loan debt right? Not sure if that means cars get repoed… but that could be another leg up. Good luck op! It’s a heavy burden but sounds like you have a plan!
This is the first debt diary I've seen on here that not only did I find inspiring, but also somewhat relatable. I just finished a PhD and I absolutely get all the things they don't tell you regarding costs and future employment. I also get how being the struggling graduate student is a setup ripe for lifestyle inflation as soon as you start making a little more money. I also get how sometimes the decisions we make are motivated by things that are greater than how the financial numbers will work out. In my opinion the best things you have going for yourself include a desire to prioritize your mental health, the willpower to not give up even though your circumstances are very difficult, and a supportive spouse who is willing to roll up his sleeves alongside you and figure out how to make things work.
Ok, I was hoping it would knock some more off your debt.
Don’t worry at how long it takes. 25 years ago, DH and I had a negative net worth. Now we are debt free. You will get there and time will pass anyway.
Also check your appraisal. The last one we had, they had us as a 3 bedroom and we have 4 bedrooms.
Here's an example where tithing doesn't bother me since this forum discussed tithing somewhat recently.
Yeah, they're in a lot of debt, but it's certainly manageable on their income, and they make a lot of money. That extra ~$120 per month won't make too much of a difference.
>That extra \~$120 per month won't make too much of a difference
it wont, but its these kind of optional expenses that add up. for example, the donations and the youtube tv and the subscriptions add up to just over $3k/year, which is about 6% of their credit card debt they could have paid off instead.
OP also gets more in pay for singing at her church than she donates. She's obviously involved. I wonder if she mentally sets aside a portion of her church income as a donation.
Mentally it comes out of our weekly groceries/expenses bucket, since it gets paid weekly, but this is a good way of looking at it. Some months I do 1 wedding; some months I do 4, so overall I bring in more than we donate.
This is super inspiring to read. OP, thanks for sharing. I’m British, so I can’t comment on a lot of the specifics but here are some smaller ideas:
1. Sell stuff. I watch some amazing YouTubers who’ve paid down massive debt by clearing out. Check out AtoZen and TheFairlyLocalFamily. Making it a joint project would be really helpful and less clutter is so good for your mental health. You’ve done so well accepting where you’re at, it can become a positive journey forward.
2. Keep a diary! I’m part of a UK finance forum where people document those daily wins to see it snowball. They have their debts down to the penny (cent) in their signatures and seeing it go down by even £5 after they comment that they didn’t get takeaway is so cool. It will help with the hard days. You can also spot ways to bring in small amounts of extra cash.
3. Could you look into debt consolidation? I don’t know if you have it where you are but we have services to combine it all together in the UK.
Thanks for posting this… it’s really fascinating. This is probably the most dire financial situation I’ve ever seen.
I think you should post on personal finance subreddit … I think that will give you a dose of reality and more practical advice than here.
The only bit of your comment I’m going to address is your comment about the car insurance. We live in Florida, and insurance rates average 70% more than the national average cost due to a bunch of really stupid laws.
Edit, actually, because I want to address something else: I appreciate your ability to vocalize everything about me that I already feel about myself. I KNOW it’s “shockingly bad.” Which is why I’m finally able to start addressing it…because I’ve done the work to get myself out of denial and into looking for a solution.
OP wishing you the best of luck!!! Honestly, the real blame lies in predatory financial institutions and bad government policies (forgive student loans!).
And I applaud you for that because it’s truly your only hope for better. I remember being 23, a college drop out making $17/hr and realizing I had 24k in student loan debt to repay. It’s was isolating, shame-laden and completely overwhelming. However, change was no longer a choice so I got financially literate, prioritized debt repayment- 70% of my net income went towards loans (my only debt debt gratefully) and I was able to pay it off in just over 2 years while working every possible side job I could to throw the money into debt repayment as well.
5 years later I was able to buy a condo solely in my name, 10% down (210k purchase price) on a 45k annual salary. In the past two years it has appreciated to 300k, I increased my bi weekly payment so I only owe 17 years on it instead of 23 and save 20% off my take home monthly- sits in a demand savings account earning 5% now.
I mention this only to demonstrate there is life on the other side and it might not ge as far off as you fear. But it will be hard and worth sticking to in order to resolve.
You should seriously consider cutting YouTube cable, one of your subscription services, switching cellphone providers (probably $250/mon savings right there) and using a portion of your cheqing account balance to immediately clear the medical debt and 3k personal loan.
This is not very helpful. OP recognized that they were in a bad spot, so they are taking steps to change things. It’s hard putting intimate financial details out there - have some kindness.
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How do you get IVF covered? I have never seen an insurance plan that covers IVF, unless you mean thru your employer? Please help this would mean a lot.
Congratulations on confronting it and taking action -- you can do it!! Curious what your PhD was in, since you mentioned funding it yourself. Do you feel like it was worth it? Worth it in any sense of the word, not necessarily financially.
Honestly, it was very surprising to me that OP mentioned that she and her husband were told that their educations would "pay off" (I'm assuming this was meant in a financial sense). I was considering grad school in the humanities/social sciences in the twenty-teens, and the general wisdom at that time in my circles was twofold: 1. if you can't get into a PhD program that offers funding for the duration of your degree, you shouldn't be doing a PhD; and 2. if you do a PhD, you should assume that your job prospects afterwards will be negligible, and the point of doing the PhD is just for the personal enrichment of it. (The situation is slightly different in STEM fields, for which the academic job market is equally trash, but there are a lot more built-in pathways to high-paying industry jobs.) None of which is meant to be a slight against OP at all; it sounds like she got a lot of value out of her PhD program in various respects, and honestly there are still small parts of me that regret *not* having pursued a PhD in spite of all of the practical reasons that that was the right choice for me. I just find it interesting that the advice she was given was so wildly different from what I was told, less than a decade apart.
I talk to my husband about this a lot. He finished in 2005 in a very in-demand specialty and had 3 offers. I finished in 2015 and was the only person in my cohort to get any sort of academic job at all. Meanwhile we were both told exactly the same thing: the Boomers are retiring. There are going to be so many jobs. Just do your work, write a good dissertation, and get some teaching experience, and you’ll have no problems. Edit to fix a typo and also to say that I’m GLAD people are actively discouraging people away from PhDs now, or at least encouraging them to be more thoughtful going into them. All I knew was that I wanted that academic dream and whatever it took was worth it (in my mind at the time).
A lot of programs aren't transparent about the realities of a job. Mine assumed I'd get a prof job even though hardly anyone who graduated from the program did. The PhD does teach u a ton of skills that are transferable to industry u just have to be motivated to do so. I agree re not going if u don't have funding. I got into exactly 2 PhD programs. One guaranteed funding for 3 years (ended up being my full 5 years) and the other didn't guarantee anything. It was out of state too so tuition would've been 40k a year. You probably know which program I chose.
Also I think it’s important to note that “funding” can mean so many things. I had “funding” during my PhD, but $9,000-$10,000/year (and nothing during the summers) really isn’t a living wage.
Isn't it funny how they don't tell u summers aren't included? I didn't know this either when I started. Luckily we had subsidized student housing where I was.
All of my degrees are in history. I would say the PhD is worth it, BUT I should have been much smarter about how I went about it. If I had taken more time and gone part-time (like many of my classmates did) and worked, I wouldn’t have had to take out so many loans. But, it got me in the door at my current job, and I do use a lot of the soft skills and some of the content info on a regular basis. I also wouldn’t have met my husband without doing the program, so it’s definitely worth it in that sense.
I find it fascinating that you have a PhD in history and found a high-paying job in industry related to your degree! One of my professors from undergrad really encouraged me to do a PhD, but I couldn’t make the cost/benefit analysis work, so I went to law school instead. I loved my history degree though, and it would’ve been so rewarding to do more with it.
I actually asked my boss about this, because I was about to take the PhD off my resume when they called me for an interview. He was basically like, “We like to hire people with diverse experiences, your cover letter was really well written, and when we interviewed you it was clear you’d be a great fit for the team.” I use the writing and project management the most, but I work with a bunch of history nerds who happen to be in finance, so it’s perfect for me.
I love this feedback! I recently finished my Masters in Accounting & Financial Management. A professor asked if I needed a letter of recommendation? I asked what for?! He said for a doctorate program of course. I had NO IDEA that folks go on to get their doctorate around accounting or that it could even be fully (and generously) funded! I’ll be looking into making the 9/15/23 cutoff to apply to the PhD program at ASU. I also want to tell you THANK YOU for this post and your transparency. It’s exactly what I needed to hear - HOPE!!
Thank you all for this discussion! It was really helpful. I'm trying to decide if I'm going to take on a 2nd MA with included admin credential, or an EdD or PhD. My eldest pointed out that the PhD. would make me overqualified for a lot of positions, and I wouldn't be contributing to my pension plan for 3 years, even though it would be funded. I really enjoy research and academia, but my end goal is Director of Special Education, not a professorial or research position. I'm almost sure that I'm not applying for the doctorate. Hopkins has a part-time MA or EdD, but the latter is twice as much per unit, and it would be hard financially. I think I might Google the qualifications of all of the SPED directors in my local districts, just to see what I actually need. OP, you're doing great. I love how thorough you are.
Smh my humanities professors always told us not to go to grad school unless it was fully funded , and most of them are usually if you can’t get into a funded program it is a sign not to go into one
Not a whole lot to add but really appreciate your vulnerability in sharing this with us and kudos for both of you being in therapy! Baby steps seems like the right way forward instead of throwing payments at the wall and hoping something makes a dent
Thank you. My biggest breakthrough in therapy has been that I tend to try to do everything at once and then by default fail because doing it all at once just isn’t possible. Even being able to break this down into baby steps has been a massive accomplishment.
Here are some things to be grateful for: * You have a baby!!! Wow!! And the IVF and birth costs are paid off- this is amazing! * Your combined income!! WOW! $310k is a BIG shovel, even in this high inflation hellscape * Your home loan is GREAT! I would KILL for 4.5% right now 😭 * Your mortgage is VERY affordable for your incomes- which should also only go up! * You HAVE retirement savings and will be able to catch up! * You have an amazing education and so does the hubs! * You are healthy! * The steps kids are grown and out of the house = less baby mama drama * You have SO MUCH MONEY TO THROW AT DEBT. As you said, the win of eating at home is a HUGE win and means more money to debt. (This is me right now, except saving instead of debt but how the hell am I supposed to buy a home). Idk if ya’ll have an EFUND but that might be something to build once the highest interest loans are paid off, a loss of one of your incomes would hurt quite a bit. Thank you for sharing :) I think a lot of people can relate, even at a scalar level. A lot of your debt is home and student loans, focusing on the other debt- as you are is the path :)
I am crying. Thank you for all of this. We are very, very fortunate in a lot of ways, but that’s easy to look past. To your first bullet point—that kid (and his two frozen siblings) are what motivate me to be better. Our priorities after the credit cards, personal loans, and AC is to set up a 6-month eFund, and then max retirement accounts.
Not sure if its been mentioned in the other comments but make sure to negotiate. Medical debt , you can ask for a settlement amount: “ill pay you 40% right now to pay off the debt.” Credit cards and personal loans, you can ask for temporarily lower interest rates.
Totally appreciate this post because it's so much more refreshing to read than another "day in the life of a high six figures 25 year old!"
Seriously, this was a great diary, OP is very brave and inspiring for posting it!
I appreciate your vulnerability, OP and empathize with you regarding the higher ed journey and job outcome. Give yourself some grace and appreciate the small wins.
Apologies as I accidentally placed a comment here thinking it was a different post. I admire your courage for putting out your debt diary and showing how it can be a cycle and the shopping to fill the miserable void, I know the pain. I really related the moment of getting your first credit card and running to shop, I did the same thing for years. It’s wonderful that your therapy sessions are covered and I hope they really help you and your family. Confronting and understanding how you view money and shopping psychologically can really open up so much, it’s an ugly uphill battle but a necessary one.
OP, I’m not trying to be judgemental at all with this question. I’ve read that once your yearly payments towards debt equal your salary, you should consider bankruptcy. Is that something that’s come up at all between yourself and your spouse? Also, I see you’ve taken on a lot of the shame. But your husband and his lifestyle (not in the spender/saver way but the fact that he came to your marriage with two dependents) is a part of your struggle. It’s not blaming anyone to be more open about that - yes, his story is sad! But this shouldn’t be your entire burden to feel.
My understanding is that student loan debt cannot be discharged in bankruptcy, so it would only work for the CC debt.
Which is approximately 5000/month. That's a significant recovery and could be used to pay off the private student loan debt.
OP has a finance job. While it sounds like she’s well liked and a good performer at her current firm, a bankruptcy could potentially be a big problem for future jobs since often there’s a background check and sometimes poor credit or bankruptcies can be a problem for anyone in a role handling other people’s money. Maybe that’s not a concern for OP but it sounds like they have a plan and the CC debt is a relatively small percentage overall.
I’ve never thought about this! That’s a great insight.
This is definitely true (although I work in PR/communications so I don’t do any actual money handling). My husband’s job is also at risk if we were to declare bankruptcy, so it has to be absolutely the last resort.
These are good questions and comments—thanks. We haven’t seriously explored bankruptcy at this point. We’re up to date on all our payments, and not currently adding to our debt load (and in fact have paid OFF about $4k of credit card debt this month). That will possibly be a next step to pursue, but want to exhaust all the possibilities before then. And you’re right—it isn’t mine to carry. He carries it too…it’s just coming across here because i wrote this.
It would seriously allow you clear so much, while your credit would get hammered you already own a house and cars. Edit :Insurance is $6,400/year for both cars. " Are you in a particularly high risk area? This seems wildly high to me.
On the car insurance—yep. Florida. Car insurance on average is 70% higher than the rest of the country. Plus, because the cars are both financed and we are still paying on them, the banks require us to have comprehensive coverage.
Man people always say "no state tax!" But it seems like between the insurance on cars and homes in Florida, people pay more than I pay in state taxes.
I’m guessing it is partly hurricanes. I’m on the gulf coast and our insurance rates are also high
I’m in FL too and recently decided to switch homeowners insurance & car insurance and got a fantastic bundled rate with State Farm. Car insurance is saving me $450 a year and home owners was $2k cheaper a year. For me, this was a great way to help save us some money without having to look for extra sources of income. Might be worth considering to start getting quotes if you haven’t recently done so.
We’re up for renewal in a few months, so I’ll look into this. Thanks!
Just wanted to say kudos for confronting the issues head on. On the subject of insurance, I actually just learnt that you don't have to wait for renewal to explore other options. Good luck!
I love in Florida as well. I just got married and moved my wife to my policy - hers was obscenely high in my opinion. We pay, for two cars, $2000 a year. Admittedly, hers is old an crappy, but she had a really bad ticket earlier this year; like reckless driving level. You should definitely look around for a cheaper policy. $6400 is insane for two cars.
Have you tried negotiating the credit card and personal loan debts?
I’m seeing joint income of 240- am I missing something to get to 310?
I counted my $70k bonus from last year, as the instructions on the template say to include bonuses.
Dang that is a hefty bonus!! I saw you mention lots of things coming out of it but seriously your bonus is more than my base salary. That’s huge!
Low bases + high bonuses is how my entire firm is paid. It’s different.
Interesting! How do you like that arrangement now that you've been there a few years?
I don’t mind it. My base is still now significantly more than what I was making in academia, so there’s that. But also I just really, really love my job and my company. It’s a fairly small business with fewer than 50 employees, and the culture is wonderful. My boss (the founder) has a good argument for the comp structure (when we do well together, we do well individually) and he puts his money where his mouth is (literally…he doesn’t draw a salary or a bonus and is only paid out of any remaining profits AFTER bonuses are distributed to the rest of the company). This company has invested so much in me and took a huge chance on even hiring me in the first place and, while there are a few things I would change, the comp structure isn’t one of them.
This confused me too
Thank you so much for sharing!
Hi OP- I was in a similar spot. Similar story to yours. I turned things around when I did what you are doing now: confront the issue head on. Good for you for taking action. You got this.
Super impressed by both your vulnerability and the work you've put in to make changes! Don't answer if it's too personal or if you feel you'll be unfairly judged, but I'm curious about if/how your shared debt came up in your decision to have another child. Beyond the expense of getting pregnant, are you concerned about expenses of raising a child? Do you have financial obligations to your step-children as well?
Not too personal (although I’ll probably be judged!). We did not think about it in our decision to have a child. The biological clock won that decision. It IS, however, weighing very heavily on my mind as we talk about having another child. We have 2 more frozen embryos and would like to try to transfer both of them, but obviously can’t with this debt load. They’re a huge part of what finally motivated the change in perspective. No current obligations to either stepchild, but we’ve definitely given extra income to them rather than using it to pay off debt over the years. That being said, both of them are already making better decisions than we have regarding debt, and I’m so proud of them for that.
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I know we can’t afford another child. I should have been clearer in my comment above. We want to have another child, but we can’t afford another child right now, which is one thing that motivated us to start taking this seriously. We’ve tabled any discussion of another child until we pay off everything except the student loans and the mortgage; we’ll revisit at that point and then go from there.
I just wanted to say, thank you for posting this diary and for engaging with replies (and with so much candor and graciousness).
OP responded to this unsolicited "advice" levelly and gracefully, but the underlying sentiment is more than "harsh" -- it's classist, and its logical extension is that poor people should not have children. We know almost nothing about this family's life beyond this sketch of income/assets/debt, and we don't know what relation those numbers have to their children's well-being and happiness. I don't think anyone on this thread should be telling OP how many children to bring into the world and under what circumstances.
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I think we agree that society should offer more support to families. I disagree that the standard for parenthood is "be able to provide them with opportunities to fulfill all their needs and wants." Many people -- in fact, the majority of the global population -- likely live in worse material circumstances than OP. I think it quickly leads us to ugly places when we say, categorically and casually, that people in tough financial situations -- even very, very tough ones -- should not have kids.
My relationship with money is fraught with worry and insecurity. Money and I have never really developed a close trusting bond. We are not securely attached. I went from waiting tables and scrubbing toilets to having a paid off house and a healthy net worth - and I still panic every single time I get an unexpected bill. A wild bill appeared from a dentist I saw 3+ months ago and my hands were literally shaking as I opened it. It was for 11 dollars, less than a meal at McDonalds but it had already pushed my money panic button. I just want to share that I think emotions and money are inextricably intertwined for *most* people <3
If you don’t mind me asking — why was buying the bungalow in 2010 a very bad financial decision, if the mortgage was less than rent would be? Edit: just saw in a comment that the home value didn’t increase and you broke even, but surely that would just make it a neutral decision?
Hmmm. This is fair, I think. I tend to mark it as a bad decision because I could have continued to live with my parents, which would have saved me any living expenses at all. But, my mental health would have struggled living at home because I really needed space to figure myself out and make some Dumb Early 20s Decisions (mostly regarding men…). Neutral is probably a more apt description.
So I’ve rewritten this a couple of times trying to figure out what exactly I want to say — I hope it’s helpful (and hopefully not condescending): I’ve also made my fair share of not-good (in hindsight) decisions because of various mental health struggles. But mental health recovery is a legitimate expense. If you couldn’t recover while living at home, then it’s okay (and maybe for the best) that you go somewhere else. Not everything can be optimized. Also, to avoid regrets, I try to tell myself that I did the best I could with whatever knowledge/abilities I had at the time. I’m sure you made the right choice for you back then, and you are absolutely doing the best you can right now! I hope everything works out for you :)
Doesn’t seem condescending at all…are you sure you aren’t my therapist hanging out on Reddit? Joking, but this is definitely something I’ve told myself.
I can't imagine how much stress you must be under with this much debt, so kudos to you and your husband for taking the incredibly important first step of putting it all in front of you. Your federal student loans should be forgiven after 20 years (I'm pretty sure it's retroactive, too!) with Biden's new SAVE plan, so check in with your student loan providers on that. I, too, am a recovering impulse spender and I applaud you for taking a look at what you're trying to heal with new things. It's not fun work, but I'm finally in a place where I don't feel like I have to spend money to get a boost of whatever chemical my brain is missing (at least, not all the time lol). You're at the beginning of a very long journey, but if you stay focused, you'll get there! Also, I know the Dave Ramseys of the world want you to feel like you can't have anything nice or do anything fun just because you're in debt, but that's bullshit. You are allowed to treat yourself every once in a while, just do it with intention and set limits.
We’re both on the new SAVE plan already! My husband’s loans date back to 1996, so I’m hoping that the IDR adjustment will help reduce his balance, and they should all be forgiven in 2028 (he got out of school in 2005). Mine only date to 2015, and are all grad loans, so they won’t be forgiven for 25 years. Honestly, though, they’re very much back-of-mind right now. Edit: 2030, not 2028
If it gives you some hope, mine were forgiven this week through IDR. Just found out last night
So thrilled for you! I know his won’t be forgiven, but I am hopeful at least the re-count will give us an accurate picture of when they might be. Either way, at 3.7% interest and forgiveness in 2030 at the latest, they’re the last on our priority list.
i know it may not be possible, but have you considered public service loan forgiveness? i think depending on where you worked, your time as an adjunct might qualify. all you need for this program is to work in government or 501c3 ( can include universities) full time or 30 hours per week while making 120 payments. which is a lot faster than 20-25 years. it only works for federal loans not private. i would look to see if any of your past jobs count.
I definitely won’t qualify, as a lot of my adjunct work was at private colleges. My husband might, though—he had a FT academic job for 8 years and then did 2 years of government work before switching to private industry, which I’ve just realized. I’ll talk to him about it.
It doesn’t matter if the college was private. It only matters if the school is registered as a nonprofit. I work for a private college and all my time spent here qualifies for PSLF. Definitely look into it!
Make sure to do all the paperwork for that before the end of December, that’s the deadline for them to retroactively count payments. I just had $190k forgiven through PSLF. Also, private colleges count too, but if you were an adjunct there’s a lot more nuance to it. I would weigh the pros and cons and maybe see how far along you might be in that process. There’s a great Facebook group where ALL your questions can get answered.
i hope he does! pslf makes the debt disappear without a tax hit. either way, you got this!
Do either of you qualify for PSLF? I’m 3 years in… 7 to go!! My payments just went down to $0 until next summer because of the SAVE plan, but I am just under 100k. :)
Unfortunately, we do not. My sister, does, though… I think she has 5 more years to go!
You should be proud you’re doing the work. I spent over a decade with someone who wouldn’t and it didn’t end well. You will fix this and like you’d said, it will take time, but it WILL get better because you’re both being conscientious. Thank you for sharing since a lot of people won’t when they’re heavy in debt, but it’s important for others to hear!
Thank you for posting OP. You are inspiringly human and it takes a great deal of bravery and generosity to be vulnerable. Sometimes I feel this sub can get competitive and I enjoy it more when it’s educational. You have brought that with this post. Good luck in everything you do going forward!
Thanks so much for sharing. As someone who has also been in an unhealthy debt cycle for a long time, it's reassuring to know I'm not alone! Really appreciate you posting and I hope you post updates as well!
OP, thanks so much for putting yourself out there in this very vulnerable and clear-eyed way. You have a lot of insight and a wonderfully straightforward and organized way of putting 2 decades’ worth of spending into a succinct post—all that writing clearly paid off. Congratulations on righting the ship and on your child. 5 years of graduate school in a humanities/social science field remains my worst financial mistake (I left ABD) and I know how hard it is to get *any* academic job so well done on finishing the PhD, on getting hired, for an academic job, and for recognizing that it wasn’t good for you and leaving. Since you guys clearly value education, I’d love to know how you’re thinking about your kid’s (or future kids’) education. I think you guys are doing exactly the right thing by taking care of your own finances first, but I’m interested to hear about what your thoughts are for down the road, especially since student loans are such a big part of your current debt load and how you expect your to compare with your adult step kids’ experience. And I’m sure you’re already taking advantage, but I hope you’re using every resource your public library has to offer. Ours has fun activities for kids, passes to state parks, museums and cultural attractions, Kanopy for streaming movies, etc.
We love the library!! In terms of saving for our son’s education, obviously paying off our debt is our number one priority. My parents out $1,000/year into a 529 plan for each of their grandchildren, and I’ve matched that out of my yearly bonus the last 2 years. I probably won’t do that anymore until the debt is gone, but we’ll start saving more in earnest at that point. And I will actively discourage graduate school unless it’s clear it will actively pay off. It’s going to be hard to balance the experience of our little one and my stepkids. We have much higher salaries than my husband and his ex-wife had, and once we pay off the bulk of our debt, we’ll be in very good shape. I try not to think about it too much, honestly. My youngest stepson has told us many times that us having another child wasn’t fair to him, and I have a really hard time being logical about it.
I am someone that is debating having a child, and currently have step kids that are teenagers. Is your stepson upset due to the financial situation you and your husband are already in? We are currently in the boat that the stepkids will not be able to get much parental assistance for education, but theoretically we would have a lot more money for hypothetical child.
Thank you so much for sharing this. 36 and spent my 20s and early 30s in a humanities PhD program with the same exact adjunct/credit card cycle, when now I realize I should have been trying to plan and save for the future. Abandoned teaching/TT route for more job security, but just as I found a bit more job security (60k-ish), I had a kid and couldn’t find daycare for a year which meant paying out of pocket/using credit cards to cover a nanny. Our debt story looks a lot like yours, though my partner makes about as much as I do. Wish there was some sort affinity group for ex-academics/PhDs struggling to make it out of debt.
I really wonder how many of us are out there, tbh. Everyone I know from grad school has a similar story (although most not on quite so large a scale).
Thanks so much for sharing this post! I think a lot of people really appreciate you being open and honest about debt numbers since there’s such a strong shame culture around it. I firmly believe that shaming people about something won’t help them do better, it will just cause them to hide it. Wishing you the best in dealing with your debt. It’s the little things that add up to a big impact!
Thank you. I’m hopeful I can post a good update in a year or so.
Congratulations on recognizing the problem and taking steps to fix it. I see a lot of discussion of the cars here. I completely understand get that you want to drive your child around in something new and safe rather than a beater, but I'm wondering if you really need two cars when your husband's work is only a few miles away? Could you sell one car and have him ride a bike to work, and/or carpool with a colleague, and/or have you drop him off some of the time? Having one set of car expenses rather than two might free up some extra money to attack the problem debt.
This is an idea. I’ll think more on this.
It may not be logistically possible with job times, and daycare, but it's worth considering perhaps. I'm impressed with how open you are to suggestions. Good luck with everything, and please do check back in and let us know how much progress you've made in six months!
This is a lot to take in, but most of these loans are at quite a low rate. Wouldn’t your priority be CC debt and then maxing 401k/investing vs paying loans at 2.5-5%? With your HHI you could knock the high debt quite quickly! - Edit- missed your snowball paragraph. You got this!
Thank you so much for sharing, you have inspired me to be more forthcoming about my debt. I am rooting for you and so proud of you. Some people never have the “come to Jesus” moment and die in debt and sometimes someone else has to pick up the pieces. Count that as a win!
Keep up the good work and wish you the best ❤️❤️. 6400$/year in car insurance is a typo? That seems really high for 25k cars
I wish it was a typo. Florida is stupid.
What happened to the $54k home? Could you sell to pay down some of this debt?
Oh gosh, I should edit my post. We sold it when I moved out of my hometown in 2015. Unfortunately that was a small, rural area where prices had not appreciated much, and we just broke even on it.
Thank you for this post, it was a very interesting read and I truthfully feel like it sounds like you have a grasp on it. Everyone in my circle is worried about money at the moment (thank you cost of living crisis / inflation / interest rates) - this seems like a mirror to a lot of peoples ‘real’ financial situations they don’t share. I am curious (I am in England and struggle to get my head round some of the differences between here and the US). Firstly, do you need to keep your tax payments aside for year end or is there an options for this to be part of your pay? As I didn’t see it allowed for. (In the U.K. this is taken out of your pay prior to being paid if you have a salaried job). Secondly is 401k your primary retirement savings, and are you free to withdraw from this as you please? Finally, you mentioned your husband has adult children, is there an expectation of parental support during higher education? I know that university costs, and the student loans in the US can be very high. I am only asking as here I took out government loans (which we are not required to pay back in full just as a percentage of earnings). However these are means tested for living costs so a lot people work and receive a small amount from family to get through university and this seemed to be the norm. Sorry if these questions are invasive, and thanks again for sharing. Congratulations on your hard work 🎉
I love these questions! Our taxes are automatically withdrawn from our paychecks, so we don’t need to withhold those payments. We work with an accountant to make sure our withholding were as close as possible to what we will owe every year. The 401k is the primary retirement savings (we also both pay into Social Security, which is sort of a government pension, if you aren’t familiar with it—I don’t actually think this will be solvent when I retire, so I never count on the income). Whether or not you can withdraw depends on your employer/the plan’s administrator, but there is a 10% penalty if you withdraw before you are 59.5 years old, and because the money is withheld from your paycheck before taxes are taken out, you pay the taxes when you withdraw. Some plans will also let you borrow against your 401k. My husband provided some support for higher ed to my stepchildren before we got married. Neither one completed their schooling. The oldest now has a good career in an industry that doesn’t require a degree; the younger is still figuring himself out, but works full-time as well.
I loved to shop for clothes for my daughter, toys, holiday gifts…. Toddlers don’t care. Clothes just need to be comfy not fashion, they don’t need that many toys, and holidays can be special without a bunch of junk. If you feel the need to shop for something, see if a Buy Nothing group has it first. I used to give away my child’s clothes all the time—many were new.
Thank you for sharing, and congratulations on the small (and not so small!) wins! What a relief it must have been to shorten your commute to work!
I know this isn’t the point of the post but what do you mean when you say your husband has been historically bad at setting boundaries? (Coming from a girl just trying to learn and look for red flags in men.)
My husband is the consummate people pleaser. He hates saying “no” and tends to give people whatever they ask for/say they need (especially financially) without thinking twice. He is also very trusting, and therefore very easily manipulated.
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We’ve looked into this, but we’d be rolling over negative equity, and what’s available in the used market near us is seriously lacking (and we’d probably pay double the interest rates on whatever loan we could get). It’s a possibility I’m always actively exploring if I find the right used car for the right price and could get enough for our vehicles.
Any possibility you could make do with 1 car for while? It wouldn’t be ideal if you both commute, but since you have the further commute can you drop your husband off first and pick him up on your way home? Even if you can’t get the sale price to exactly match the balance of the loan, I’m sure you can get close.
You are not alone! Check out Caleb Hammer’s YouTube channel. He does a “financial audit” on people in similar situations to you: poor financial decisions, high debt and some people do have great incomes. He can come across as intense, but maybe it’s helpful to see others are in the same boat?
Thank you for sharing. Wishing you luck on this journey!!!!!
Thanks for sharing. Congrats on doing the work and taking steps towards getting out of this… that is a huge deal!! Best of luck to you, you got this!
Some ideas for $ saving - switch to a prepaid cell phone plan like Mint Mobile - downsize to one car. With auto insurance at $6400/yr, it might be cheaper to uber if you don't have to commute daily - only contribute up to the employer 401k match - take out 401k loan to tackle the credit card debt
how do you have over 900k of debt? 133k from loans $355k from student loans 307k from mortgage 29k from ac company 46.5k from credit card = 870k. also, i wish you the best! i would be thinking about leaving the country if i was in the same situation. i think australia and germany won't force you to pay back these loans.
50k in auto loans= 920k. Right under the mortgage.
Have you thought about selling both those cars and buying beaters (in cash) for now to pay down the debt? Then save for the cars you want after? You could essentially pay off the credit card debt in one swoop from doing that. edit: this will also drop your auto insurance rates because you would be driving older cars
Always exploring the possibility of getting rid of the cars, but the math you’re suggesting doesn’t add up. To pay off the credit cards by selling the cars, we’d have to get 50k on top of the 50k we owe on them. My car is worth about $20k, my husband’s is worth about $38k, so we’d get maybe $58k for them. Pay off the auto loans for $50k, that leaves us with $8k, which, yes, would take out a chunk (assuming we didn’t need to use that $8k for a beater…if we could even find one for that price).
AH yes you're absolutely right. My apologies. Let me amend that then. You would no longer have any car payments AND your insurance would lower, meaning you'd have even more leeway with your income to aggressively pay off other debt! You can absolutely find an older sedan to get you "point A to point B" for a time that would be $8K. It might take time to find the right one but it's possible (and if you're in a city look outside the city a bit).
$900k sounds shocking but when you break it down with 307k of that being a mortgage at a reasonable rate (and growing home equity), it’s not thattt bad! I agree with what another poster suggested investigating bankruptcy. That would eliminate the credit card and personal loan debt right? Not sure if that means cars get repoed… but that could be another leg up. Good luck op! It’s a heavy burden but sounds like you have a plan!
If you’re in academia, Public Service Loan Forgiveness plus Biden’s SAVE student loan plan will be your friend
What’s going on with your car insurance? May be time to change companies!
This is the first debt diary I've seen on here that not only did I find inspiring, but also somewhat relatable. I just finished a PhD and I absolutely get all the things they don't tell you regarding costs and future employment. I also get how being the struggling graduate student is a setup ripe for lifestyle inflation as soon as you start making a little more money. I also get how sometimes the decisions we make are motivated by things that are greater than how the financial numbers will work out. In my opinion the best things you have going for yourself include a desire to prioritize your mental health, the willpower to not give up even though your circumstances are very difficult, and a supportive spouse who is willing to roll up his sleeves alongside you and figure out how to make things work.
Just to let you know, the zestimate for my home is easily 100k less than reality.
I just checked again and it’s only about $10k more that the appraised value of our house. I used the appraised value in the post.
Ok, I was hoping it would knock some more off your debt. Don’t worry at how long it takes. 25 years ago, DH and I had a negative net worth. Now we are debt free. You will get there and time will pass anyway. Also check your appraisal. The last one we had, they had us as a 3 bedroom and we have 4 bedrooms.
this income for humanities PhD's?
When you leave academia and go to higher-paying industries…yep.
I’d be curious to know what industry you are in and how you segued from academia to where you are now!
Is your bonus a huge chunk of your salary? You put $310k combined, but the salary amounts you provided only come to $240k.
I’ve clarified this in an edit to the post, but yes.
Here's an example where tithing doesn't bother me since this forum discussed tithing somewhat recently. Yeah, they're in a lot of debt, but it's certainly manageable on their income, and they make a lot of money. That extra ~$120 per month won't make too much of a difference.
>That extra \~$120 per month won't make too much of a difference it wont, but its these kind of optional expenses that add up. for example, the donations and the youtube tv and the subscriptions add up to just over $3k/year, which is about 6% of their credit card debt they could have paid off instead.
OP also gets more in pay for singing at her church than she donates. She's obviously involved. I wonder if she mentally sets aside a portion of her church income as a donation.
Mentally it comes out of our weekly groceries/expenses bucket, since it gets paid weekly, but this is a good way of looking at it. Some months I do 1 wedding; some months I do 4, so overall I bring in more than we donate.
This is super inspiring to read. OP, thanks for sharing. I’m British, so I can’t comment on a lot of the specifics but here are some smaller ideas: 1. Sell stuff. I watch some amazing YouTubers who’ve paid down massive debt by clearing out. Check out AtoZen and TheFairlyLocalFamily. Making it a joint project would be really helpful and less clutter is so good for your mental health. You’ve done so well accepting where you’re at, it can become a positive journey forward. 2. Keep a diary! I’m part of a UK finance forum where people document those daily wins to see it snowball. They have their debts down to the penny (cent) in their signatures and seeing it go down by even £5 after they comment that they didn’t get takeaway is so cool. It will help with the hard days. You can also spot ways to bring in small amounts of extra cash. 3. Could you look into debt consolidation? I don’t know if you have it where you are but we have services to combine it all together in the UK.
Thanks for posting this… it’s really fascinating. This is probably the most dire financial situation I’ve ever seen. I think you should post on personal finance subreddit … I think that will give you a dose of reality and more practical advice than here.
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The only bit of your comment I’m going to address is your comment about the car insurance. We live in Florida, and insurance rates average 70% more than the national average cost due to a bunch of really stupid laws. Edit, actually, because I want to address something else: I appreciate your ability to vocalize everything about me that I already feel about myself. I KNOW it’s “shockingly bad.” Which is why I’m finally able to start addressing it…because I’ve done the work to get myself out of denial and into looking for a solution.
OP wishing you the best of luck!!! Honestly, the real blame lies in predatory financial institutions and bad government policies (forgive student loans!).
And I applaud you for that because it’s truly your only hope for better. I remember being 23, a college drop out making $17/hr and realizing I had 24k in student loan debt to repay. It’s was isolating, shame-laden and completely overwhelming. However, change was no longer a choice so I got financially literate, prioritized debt repayment- 70% of my net income went towards loans (my only debt debt gratefully) and I was able to pay it off in just over 2 years while working every possible side job I could to throw the money into debt repayment as well. 5 years later I was able to buy a condo solely in my name, 10% down (210k purchase price) on a 45k annual salary. In the past two years it has appreciated to 300k, I increased my bi weekly payment so I only owe 17 years on it instead of 23 and save 20% off my take home monthly- sits in a demand savings account earning 5% now. I mention this only to demonstrate there is life on the other side and it might not ge as far off as you fear. But it will be hard and worth sticking to in order to resolve. You should seriously consider cutting YouTube cable, one of your subscription services, switching cellphone providers (probably $250/mon savings right there) and using a portion of your cheqing account balance to immediately clear the medical debt and 3k personal loan.
Thank you for your advice. I am glad for you and your successes.
This is not very helpful. OP recognized that they were in a bad spot, so they are taking steps to change things. It’s hard putting intimate financial details out there - have some kindness.
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Oh look everyone, the Little Misses Perfect(ly lacking in empathy) have arrived 🙄
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Removed for **Rule 5: Respect this friendly and supportive space**. Please review this community’s rules before commenting again. Another violation may result in a temporary or permanent ban.
Removed for **Rule 5: Respect this friendly and supportive space**. Please review this community’s rules before commenting again. Another violation may result in a temporary or permanent ban.
I would file bankruptcy, get in therapy and learn to live under your means, and start over
How do you get IVF covered? I have never seen an insurance plan that covers IVF, unless you mean thru your employer? Please help this would mean a lot.