Earning Well but Drowning in Debt...how to dig out?

[Anonymous]

this, folks, is a lesson in keeping your fixed costs down.

[Anonymous]

Anonymous wrote:this, folks, is a lesson in keeping your fixed costs down.

And also not reproducing while you have 200k in student loans outstanding! Who does that? I feel bad reproducing because we'll have to take money out of savings for the baby room.

[Anonymous]

Anonymous wrote:OP here. First of all, we are NOT in DC. We are not far from DC but do not have easy access to metro. Second, we have three kids in two different locations. Even with two cars, drop off and pickup from daycare / aftercare is stressful as can be and we often run right up to the 6pm deadline even when we leave at 5pm. Figuring out how to take public transport back and forth from two locations with Jobs just isn't realistic. So selling cars is not an option. It would be great if we could get by on one car. But we cannot.

We do run around a lot to activities in evenings and on weekends. We do not shop at Whole Foods as a PP suggested. Try giant, shoppers, and occasionally trader joes if we need RTH foods for an especially busy work week. We do tend to get carryout and some delivery 1-2x per week. We have a restaurant night one night per week. DH travels a lot for work so when he is away and I am flying solo with the kids doing two drop offs and pickups and working a 9-10 hr day, I do give myself the luxury of not having to cook an extra night.

We do have two elderly dogs in addition to the three kids. Dogs predate kids. So we have dog walking we pay for each month and extra expenses there for food.

Honestly, I am grateful to those who post helpful and positive comments instead of the "oh you shouldn't have had three kids and bought a house." Well thanks a frickin lot for those genius comments. What do we do? Give two kids up for adoption and live in a box down by the river?

We certainly are not going to sell our home, which is already too small, and move our kids into an even smaller apartment in a crappy school district in DC with even higher taxes!

You keep mentioning that the kids are in a lot of activities. I would start looking there because activities are not cheap.

Your mortgage is high. You need to pare down somewhere. Is your 2012 vehicle almost paid off?

[Anonymous]

Anonymous wrote:

Anonymous wrote:this, folks, is a lesson in keeping your fixed costs down.

And also not reproducing while you have 200k in student loans outstanding! Who does that? I feel bad reproducing because we'll have to take money out of savings for the baby room.

Feel bad why, what moral imperative did you violate

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:this, folks, is a lesson in keeping your fixed costs down.

And also not reproducing while you have 200k in student loans outstanding! Who does that? I feel bad reproducing because we'll have to take money out of savings for the baby room.

Feel bad why, what moral imperative did you violate

None. But I do feel bad taking money out of savings to buy furniture.

[Anonymous]

Anonymous wrote:

Anonymous wrote:this, folks, is a lesson in keeping your fixed costs down.

And also not reproducing while you have 200k in student loans outstanding! Who does that? I feel bad reproducing because we'll have to take money out of savings for the baby room.

Please, not everyone had decent public university options (and honestly, it could be $100k for each parent: my public university was 2 hrs from my house so I would have to live on campus, which means about $8k tuition but $12k room and board, so you have $80k right there doing the 'right' thing, and $20k for grad school would be pretty easy). A lot of you folks scoff at student debt but it can be very expensive if you don't live near a public university not have any parental help. Most people on this board are from east and west coast metros and have no idea of the hurdles for lower income from small towns just to get out of that town.

Don't have kids until $200k is paid off; so basically you are saying folks who didn't have parents fund their 529 shouldn't ever have children?

I am pretty sure OP is like us; they want to keep the govt jobs because they value stability highly b/c their is NO safety net outside of their jobs. No parents or relatives or even old friends with connections to get them through a downsizing. And those govt jobs mean living as close to DC as possible to have decent commutes, and good schools they see as the key for their children's future success and hence living in Bethesda/Arlington or what not in as small a place as possible. Townhouse is right choice, b/c condos becomes $$$ as they age and you will end up with huge fees and headaches. And a small two bedroom townhouse in Arlington is $650, and the cheapest 3 bedroom is $750k. Renting is not an option now b/c rents have been increasing 5% a year and it is now cheaper on a month to month basis to buy a property then rent the same property. Unless you rent something much smaller, but with current rent increases that would be a poor gamble to make.

They could downsize their cars: we have 3 car seats in a Yaris and it is fine, just need to look at radian80 car seats and the like. Not sure of the value of selling a 2012 and 2013 vehicles; those are not new and I suspect if they run into the ground it will turn out to be a good option; definitely better than a Kia which won't last as long. OP go borrow some narrow car seats and give a smaller car a test drive and run the numbers. If you can get $20k for odyssey and buy a used fit for $10k you will make a dent. But these are one time changes and won't bring you home.

I would recommend paying down credit card debt by using emergency fund. You have 401k for true emergencies, and you can use your credit cards for semi-emergencies like a new furnace. He rate on the cc debt must be awful and is working against you. Pull that bandaid then stick the credit cards in a bowl of water and freeze them. You need to work on a cash basis

Pp recs for summer camps are true, go with ymca and county; kids may complain but will be ok. Try to coordinate hard with friends b/c kids like best when they know someone in camp more than how organized it is.

Drop kid activities that cost more than $50/month. Music instruction is expensive but maybe look at a grad student or someone to do instruction or have lessons every other week and push for more practice time. Community bands are an option to get more time playing in public or church piano for the choir.

Freelancing is hard b/c you work for govt and this core career is off limits.

I would eliminate cc debt, and depending on rate I might roll student loan debt into mortgage but that does put your home at risk by converting unsecured debt into secured debt. But if interest rate is fixed st 1/2 of student loan debt it might be worth it.

[Anonymous]

You know, I'm not going to say no one should have kids, or even 3 kids, with student loan debt, even staggering debt like OP's. But it's about PRIORITIES. You can't do the 3 kids in childcare and the student loans AND the high mortgage house AND two late model cars. It doesn't work. 3 kids and 200K in student loan debt calls for some degree of cheerful, modest frugality, but OP isn't having it.

[Anonymous]

For the last time, OP's oldest child is in elementary school and doesn't need a car seat.
Please and thank you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The OP fails to remember one thing: they did this to themselves. They made a decision to have 3 kids(or not!), they chose the cars they have, the places they live, and, and this is key, they CHOSE to incur the debt they did. Yes, it might be medical issues, but, you chose to make those pymts. Or, you chose a job that has crappy or no medical coverage. It is a story of choices made. And, unfortunately, unwise choses made. Asking for help, or even, paying for help, won't get you there. You need to make rational decisions.

+1. This is why I don't have much faith in OP turning things around. I can't imagine a normal person would ever make these decisions to begin with. I would die from stress if I lived off of a credit card during maternity leave. I could understand maybe a single mom who has NO other options during leave. But a wife with a husband making six figures? They couldn't buckle down and live off of his salary for ONE month? Then to make that same mistake over and over again?

I remember waiting to have kids with my husband because I knew we could afford to save for a home while also paying for childcare. I don't think OP gets it and understands one has to think this way.

Actually no they can't because mortgage, student loan payments, and daycare would consume the husbands entire salary. They need to incomes to make it work, and that is true for many people with two more or less equal incomes

[Anonymous]

Anonymous wrote:For the last time, OP's oldest child is in elementary school and doesn't need a car seat.
Please and thank you.

They are in K and need a booster.

[Anonymous]

Anonymous wrote:For the last time, OP's oldest child is in elementary school and doesn't need a car seat.
Please and thank you.

I think you need to be in a booster until age 7 in Virginia. OP's kids are in first grade, so probably six.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For the last time, OP's oldest child is in elementary school and doesn't need a car seat.
Please and thank you.

They are in K and need a booster.

And we found boosters wider than many car seats.

[Anonymous]

3 kids is a lot. I find it irresponsible to go into $50k credit card debt for a third.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:this, folks, is a lesson in keeping your fixed costs down.

And also not reproducing while you have 200k in student loans outstanding! Who does that? I feel bad reproducing because we'll have to take money out of savings for the baby room.

Please, not everyone had decent public university options (and honestly, it could be $100k for each parent: my public university was 2 hrs from my house so I would have to live on campus, which means about $8k tuition but $12k room and board, so you have $80k right there doing the 'right' thing, and $20k for grad school would be pretty easy). A lot of you folks scoff at student debt but it can be very expensive if you don't live near a public university not have any parental help. Most people on this board are from east and west coast metros and have no idea of the hurdles for lower income from small towns just to get out of that town.

Don't have kids until $200k is paid off; so basically you are saying folks who didn't have parents fund their 529 shouldn't ever have children?

I am pretty sure OP is like us; they want to keep the govt jobs because they value stability highly b/c their is NO safety net outside of their jobs. No parents or relatives or even old friends with connections to get them through a downsizing. And those govt jobs mean living as close to DC as possible to have decent commutes, and good schools they see as the key for their children's future success and hence living in Bethesda/Arlington or what not in as small a place as possible. Townhouse is right choice, b/c condos becomes $$$ as they age and you will end up with huge fees and headaches. And a small two bedroom townhouse in Arlington is $650, and the cheapest 3 bedroom is $750k. Renting is not an option now b/c rents have been increasing 5% a year and it is now cheaper on a month to month basis to buy a property then rent the same property. Unless you rent something much smaller, but with current rent increases that would be a poor gamble to make.

They could downsize their cars: we have 3 car seats in a Yaris and it is fine, just need to look at radian80 car seats and the like. Not sure of the value of selling a 2012 and 2013 vehicles; those are not new and I suspect if they run into the ground it will turn out to be a good option; definitely better than a Kia which won't last as long. OP go borrow some narrow car seats and give a smaller car a test drive and run the numbers. If you can get $20k for odyssey and buy a used fit for $10k you will make a dent. But these are one time changes and won't bring you home.

I would recommend paying down credit card debt by using emergency fund. You have 401k for true emergencies, and you can use your credit cards for semi-emergencies like a new furnace. He rate on the cc debt must be awful and is working against you. Pull that bandaid then stick the credit cards in a bowl of water and freeze them. You need to work on a cash basis

Pp recs for summer camps are true, go with ymca and county; kids may complain but will be ok. Try to coordinate hard with friends b/c kids like best when they know someone in camp more than how organized it is.

Drop kid activities that cost more than $50/month. Music instruction is expensive but maybe look at a grad student or someone to do instruction or have lessons every other week and push for more practice time. Community bands are an option to get more time playing in public or church piano for the choir.

Freelancing is hard b/c you work for govt and this core career is off limits.

I would eliminate cc debt, and depending on rate I might roll student loan debt into mortgage but that does put your home at risk by converting unsecured debt into secured debt. But if interest rate is fixed st 1/2 of student loan debt it might be worth it.

The OP had probably been out of college for at least 10 years. She could have paid 20k a year towards this debt. I don't see how any rationale person could think it's a good idea to have three children when you still have over 200k in student loans. They should have aggressively paid most of that down before starting a family. Or they should have purchased a townhome farther or if they insist on driving to work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The OP fails to remember one thing: they did this to themselves. They made a decision to have 3 kids(or not!), they chose the cars they have, the places they live, and, and this is key, they CHOSE to incur the debt they did. Yes, it might be medical issues, but, you chose to make those pymts. Or, you chose a job that has crappy or no medical coverage. It is a story of choices made. And, unfortunately, unwise choses made. Asking for help, or even, paying for help, won't get you there. You need to make rational decisions.

+1. This is why I don't have much faith in OP turning things around. I can't imagine a normal person would ever make these decisions to begin with. I would die from stress if I lived off of a credit card during maternity leave. I could understand maybe a single mom who has NO other options during leave. But a wife with a husband making six figures? They couldn't buckle down and live off of his salary for ONE month? Then to make that same mistake over and over again?

I remember waiting to have kids with my husband because I knew we could afford to save for a home while also paying for childcare. I don't think OP gets it and understands one has to think this way.

Actually no they can't because mortgage, student loan payments, and daycare would consume the husbands entire salary. They need to incomes to make it work, and that is true for many people with two more or less equal incomes

Which is why I can't understand why they had three kids.