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

[Anonymous]

You need to go on a spending diet OP.

Make a monthly budget and stick to it. Write down every expenditure and go over it with your spouse. Sell anything you can. Refinance any loans you can. Don't buy any new clothes for a year. Get an extra job. Good luck.

[Anonymous]

OP are you gone? If not, did you get any game plan from this thread ? (apart from the experts who want you to not have 3 kids obviously..)

[Anonymous]

OP here. I am really truly baffled and disgusted by the people on here who couldn't say anything more than "you shouldn't have had three kids" or who presume to think we are these upper class wannabees who get 6 year car loans, wear fancy name brand clothes, send our kids to Smithsonian camps, live in some mcmansion we cannot afford in Mclean, and try to keep up with the Joneses. What a bunch of self-righteous mean spirited people! I came on here asking for helpful advice. The shoulda-coulda-woulda bullsh!t just isn't helpful.

Anyone who knows us and sees our lifestyle would never ever make such judgments. Our house is extremely modest and too small for a family of 5, we are the butt of many family jokes, and actually have relatives who won't even visit/stay with us because there is nowhere for them to sleep. We deal with that and don't care, but we are not in a huge unaffordable home. Our rowhouse would probably cost $250k almost anywhere else. Here, it's over $700k. We have done well with our home, and will not sell it to move into a cramped 2 bedroom apartment with three kids. we realize we will be here for a while until we can dig partway out of debt. We drive Hondas for goodness sake, and they are 2012 and 2013, so almost paid off. They are not financed under 6 year loans. I didn't even know there was such a thing.

I do appreciate the advice I got on how to trim back expenses, as well as the recommendations to look at David Ramsey, Michelle, and other experts who will motivate.

I do have a child who is musically gifted. He is not in Kindergarten as other posters have alluded to, but is in older grade in elementary school. It is not some bragging right for us wannabees to flaunt. He has been flagged as gifted by his school, and is playing his chosen instrument at a pre-professional level at a very young age, with just a couple years of training. Elementary school band/orchestra doesn't cut it at this point. Sorry to disappoint you naysayers. We are doing our best to support him. My middle child is graduating form prek and starting K next fall, and my youngest is 3 and has two more years of daycare. That explains the need for two summer camps this summer, and two daycares now. It also explains the need for three carseats/boosters. All three kids still need carseats. We have two dogs as well, so driving a yaris just won't work for our family. We will hopefully have a financial break when DC2 is out of daycare, and can push that toward paying off the loans.

We are both feds and do have job security. We also are highly paid feds (if there is such a thing). We could make more in the private sector, but are not certain we want to sacrifice the job security and long hours. Neither DH nor I have a grand desire to be partners at a law firm and to have that lifestyle (again, we are not the wannabe mclean mcmansion types). We enjoy being parents, our family, and spending time with our kids.

As for camps, I agree that Smithsonian camps are too expensive. Prohibitively so for us. I was using that as an example. We have not yet sent any of our kids to smithsonian camps. We have done local camps through the county and also ymca, and we are planning to do a music camp for DC1 this summer. Even the county/YMCA camps are over $350/week including aftercare. For two kids that's $700/week For cheap camp. We are looking into finding a babysitter instead or sending kids to grandparents further south for part of the summer to help save some money.

We are planning to cash out part of our emergency fund to pay off the CC debt. That will make us feel better and also eliminate the high interest. That has been overwhelming. Was it foolish to use CC for grad school and some maternity leave issues? Yes. I also had some serious medical issues after maternity leave with one pregnancy and had A LOT of medical bills to pay off, e.g., over $8k. That sucked.

Again, I want to thank those of you who provided helpful and productive suggestions. Some extreme. Some not. For those of you who could do nothing but make fun of someone who is trying to get out of the hole... Karma.

[Anonymous]

Thanks OP for coming back. All the moralizing over the number of kids you have and debt is obnoxious, indeed. Just makes the writer feel smug and doesn't help you.
My only additional suggestion is to look for a music major as a summer nanny. Look at Mason for a college BFA student who could babysit and do some music coaching.

[Anonymous]

I'd also add that one way we got on budget was to divide our bank accounts into fixed and discretionary. So X goes into one account and autopays bills and the other gets $350/week for ALL discretionary spending (food, gas, meteo, clothes, kids 500 freaking birthday party circuit gifts, snow shovels, etc). That helped us see how the little spending adds up.

[Anonymous]

Anonymous wrote:I'd also add that one way we got on budget was to divide our bank accounts into fixed and discretionary. So X goes into one account and autopays bills and the other gets $350/week for ALL discretionary spending (food, gas, meteo, clothes, kids 500 freaking birthday party circuit gifts, snow shovels, etc). That helped us see how the little spending adds up.

That is a really, really good idea. Might have to try that .

[Anonymous]

Op - it sounds as though you are getting a plan together and that's great! How much longer until your cars are paid off?

[Anonymous]

Anonymous wrote:OP here. I am really truly baffled and disgusted by the people on here who couldn't say anything more than "you shouldn't have had three kids" or who presume to think we are these upper class wannabees who get 6 year car loans, wear fancy name brand clothes, send our kids to Smithsonian camps, live in some mcmansion we cannot afford in Mclean, and try to keep up with the Joneses. What a bunch of self-righteous mean spirited people! I came on here asking for helpful advice. The shoulda-coulda-woulda bullsh!t just isn't helpful.

Anyone who knows us and sees our lifestyle would never ever make such judgments. Our house is extremely modest and too small for a family of 5, we are the butt of many family jokes, and actually have relatives who won't even visit/stay with us because there is nowhere for them to sleep. We deal with that and don't care, but we are not in a huge unaffordable home. Our rowhouse would probably cost $250k almost anywhere else. Here, it's over $700k. We have done well with our home, and will not sell it to move into a cramped 2 bedroom apartment with three kids. we realize we will be here for a while until we can dig partway out of debt. We drive Hondas for goodness sake, and they are 2012 and 2013, so almost paid off. They are not financed under 6 year loans. I didn't even know there was such a thing.

I do appreciate the advice I got on how to trim back expenses, as well as the recommendations to look at David Ramsey, Michelle, and other experts who will motivate.

I do have a child who is musically gifted. He is not in Kindergarten as other posters have alluded to, but is in older grade in elementary school. It is not some bragging right for us wannabees to flaunt. He has been flagged as gifted by his school, and is playing his chosen instrument at a pre-professional level at a very young age, with just a couple years of training. Elementary school band/orchestra doesn't cut it at this point. Sorry to disappoint you naysayers. We are doing our best to support him. My middle child is graduating form prek and starting K next fall, and my youngest is 3 and has two more years of daycare. That explains the need for two summer camps this summer, and two daycares now. It also explains the need for three carseats/boosters. All three kids still need carseats. We have two dogs as well, so driving a yaris just won't work for our family. We will hopefully have a financial break when DC2 is out of daycare, and can push that toward paying off the loans.

We are both feds and do have job security. We also are highly paid feds (if there is such a thing). We could make more in the private sector, but are not certain we want to sacrifice the job security and long hours. Neither DH nor I have a grand desire to be partners at a law firm and to have that lifestyle (again, we are not the wannabe mclean mcmansion types). We enjoy being parents, our family, and spending time with our kids.

As for camps, I agree that Smithsonian camps are too expensive. Prohibitively so for us. I was using that as an example. We have not yet sent any of our kids to smithsonian camps. We have done local camps through the county and also ymca, and we are planning to do a music camp for DC1 this summer. Even the county/YMCA camps are over $350/week including aftercare. For two kids that's $700/week For cheap camp. We are looking into finding a babysitter instead or sending kids to grandparents further south for part of the summer to help save some money.

We are planning to cash out part of our emergency fund to pay off the CC debt. That will make us feel better and also eliminate the high interest. That has been overwhelming. Was it foolish to use CC for grad school and some maternity leave issues? Yes. I also had some serious medical issues after maternity leave with one pregnancy and had A LOT of medical bills to pay off, e.g., over $8k. That sucked.

Again, I want to thank those of you who provided helpful and productive suggestions. Some extreme. Some not. For those of you who could do nothing but make fun of someone who is trying to get out of the hole... Karma.

How did you have 8k in medical bills as a fed? I'm unaware of any plan with that high of an out of pocket max. Do you mean infertility related bills?

I don't think people are being unreasonable to attribute your choice to have three kids as a source of your problems. How could you not? You're saying you need these camps, your house is crowded, you need cars to fit the kids, etc. you took Unpaid leave three times. Seems like the kids really are why you are struggling.

If you have 200k in student loans I think it's a bit unwise to insist on staying a fed. Someone needs to make more money to pay off these loans.

[Anonymous]

I don't know of anyone on this board who made fun of you. I think perhaps posters got frustrated that you were unable to see that you made certain choices that led to your financial situation.

[Anonymous]

Anonymous wrote:Thanks OP for coming back. All the moralizing over the number of kids you have and debt is obnoxious, indeed. Just makes the writer feel smug and doesn't help you.
My only additional suggestion is to look for a music major as a summer nanny. Look at Mason for a college BFA student who could babysit and do some music coaching.

This is a really good idea, OP.

[Anonymous]

The $8k after one of the pregnancies could have been therapy for PPD pre-ACA, when mental health wasn't covered like physical health. At $100/session it can add up. Could have also been marital counseling, which is really spends.

[Anonymous]

Good job, OP. Thanks for coming back, and I agree with you. People DID make fun of you not knowing you. People did make horrible moralistic criticism over your decision to have children. Those people suck. And hopefully karma will find them.

[Anonymous]

Anonymous wrote:Good job, OP. Thanks for coming back, and I agree with you. People DID make fun of you not knowing you. People did make horrible moralistic criticism over your decision to have children. Those people suck. And hopefully karma will find them.

When??? When did some post making fun of OP?

[Anonymous]

Anonymous wrote:The $8k after one of the pregnancies could have been therapy for PPD pre-ACA, when mental health wasn't covered like physical health. At $100/session it can add up. Could have also been marital counseling, which is really spends.

That is speculating. It's also possible that OP had major surgery and was under a plan when she had to pay 15% or 20% of the costs after a certain amount. I recently had a very simple surgical procedure that lasted 45 minutes, but cost me close to $4k because Blue Cross Blue Shield Standard required that I pay 15%. Bills to surgeon. Bills to hospital. Bills to anesthesiologist. Bills to pathologist, etc., etc. I can definitely see how it's possible to have $8k in medical bills as a fed. if something isn't covered entirely.

[Anonymous]

Just get a notebook and pen and start from where you are. Write down all your debt and your monthly expenses. Then start cutting things out. If your kids are little they don't need to be in activities until they are older. No more vacations, eating out, etc. Just live like a frugal miser for a few years. Otherwise you will not get out of debt. Kids expenses increase as they get older. You may not need daycare anymore, but your kids will need braces, computers, and college. Just start right now. It is cool to be frugal and horrible to be in debt. Just slash all your expenses now. If not you will regret it even more in two years.