UMC deep in the negative

[Anonymous]

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Anonymous wrote:Your mortgage debt does not lower your net worth if it, you know, comes with a house.

+1 are you underwater on the house? on the green side, you should be soft-counting the value of your house. I say soft-counting because eggs and hatching and all, but it is a more realistic financial picture.

OP here, you both identified why I am in the legal field working in a non-financial practice! I am not underwater on my house but only 2 years into a 30 year mortgage. Taking the mortgage and equity out of the picture would put me at less than negative half a million. That certainly seems more surmountable even if it takes a decade or so.

To the others offering lifestyle advice: thank you, but I am learning as I go. I don't have major credit card debt now as I learned that lesson carrying maxed out credit cards through undergrad and law school. I have no idea how griping about owning a townhouse is "keeping up with the Joneses" or living beyond my means as we are very comfortable even after replacing the HVAC and poor DIY renovations from the previous cheap skate owner. Again, I am just asking when the upper middle class life, which is obviously a status worth striving for here in the US, becomes comfortable.

It becomes comfortable when you can afford to live an UMC lifestyle. You’re not there yet.

+1. You are not UMC; you are pretending to be. Which a lot of people do, I grant you, but when you owe $700,000, you are not UMC, you are poor. You should be living like you're poor until you are debt-free.

This.
You are in a lot of debt, you are not UMC. An UMC lifestyle becomes comfortable when you can ACTUALLY afford it, which you can't.

I hate HATE piling on but this PP has it right. Right now you and your spouse are dealing with a ton of debt - and nice salaries, but not HUGE salaries that'll let you pay it off quickly. I took on a lot of debt for law school - though not as much as you guys; $160k, and graduated 18 years ago. I'm still paying off those loans. Hope to be done in 4 years. I would say that for 12-14 years, I lived like a poor rich person, or a rich poor person - and only now, with my husband earning more and my loans getting more manageable, am starting to live more like a regular middle class person. That's what happens when you take on a lot of debt and don't have an easy way to pay it down. You live like a student, when you're not a student.

This is the bed you made. You'll deal with it. See if you or your spouse can get higher paying jobs. If not, then do what you have to do: you throw every penny you have into the loans and your other debt, and eventually it gets smaller, and then one day far in the future it gets paid off.

So the TL;DR is: you start feeling more comfortable when you are more comfortable.

[Anonymous]

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Anonymous wrote:I feel for you op. People act like what until you pay off student loans to have kids. Infertility is real. In my office of women lawyers, every single one of them over 35 is having trouble. We are super close so I know they’ve been trying and the troubles they’ve had. I went to a top 25 law school with partial scholarships and then into government and Dh went into non-profit (no loans for him). We are from the south so we started trying for a child at 26. Infertility. Didn’t see that one coming. Luckily, we didn’t wait until mid to late thirties so we had plenty of time to try everything we could before resorting to IVF. Then I went into private practice to try to pay off my loan faster. Worst mistake of my life. I won’t go into all the horrors of my law firm but if I could do it all over again, I would not have gone into private practice. All your problems are not magically solved if you go into private practice that’s for sure. Good luck.

True, but then you have to live with a lot of debt. You have to pick and choose what you can live with. For most of us, you can't have your cake and eat it too.

I had my first at 35 and second at 38, so it's not like I don't know about waiting to have kids. And I'm not a lawyer.

And I never said you could have it all. It’s just people willy nilly push waiting to have kids and with their kind of debt it may not be so easy.
Even though the DC area doesn’t believe it, fertility is on a finite timeline! She’s getting hounded for having kids and not waiting which is crazy to me.

Plenty of people have kids in modest apartments, condos and town homes. Do you get it?

People don't go to law school to live in modest apartments. Do you get it.

Np. But in this case, they should!

Then all that sacrifice, had work is all for nothing.

At the end of the day, there has to be some point, no?

You know what? Sure. Live in a prime location now; you deserve it. Lease that fancy car now; you deserve it!

Later...be saddled with debt for life, die destitute, and leave your children with nothing but resentment and the burden of your care. Leave this world in debt and nothing to show for your work. You deserve it.

You sound really angry. Why does someone else enjoying life irritate you so?

Perhaps you were once in the same boat as op and followed your own advice? It would make me miserable too

I'm the PP you are responding to, and I am far from miserable. I make $110K working at a university, and I leave every day at 4:30 p.m. My husband makes 6 figures working for the DC government, and he his home for dinner every night at 6:30. We have a great daycare for our two girls which is costly, but worth every penny. We have more than $250K each in retirement accounts; I'm 38, he's 43. We have at least another $60K in emergency savings/easy-to-access investments, and $20K for each child in college accounts. Our only debt is our 4-bedroom, 3-level home in a nice Maryland suburb. We love our home and our neighbors. Our public schools are good, and we will have the option for private school when it comes time to make that decision. We go on nice-but-not-fancy vacations; we drive nice-but-not-fancy cars. We go out when we want to, we buy clothes and furniture and experiences when we want to--that being said, we prefer a more modest lifestyle.

I sleep well at night, knowing that I'm debt-free and have a nice cushion. As someone who works closely with world-renowned economists, let me tell you; a significant recession is coming in the 2030s.

I've never been in debt, because my focus is on security and freedom, not in keeping up with the Joneses or living some fantasy lifestyle that I've fooled myself into thinking I'm entitled to.

[Anonymous]

PP again: I went to one of the fanciest law schools. Top five in the country. Most people graduating went to big firms - I came from what I thought was an UMC background but learned there that I was actually a hayseed; I didn't have parents footing my law school bill and I didn't even know what a big law firm was when I started law school. I tried biglaw for a year and hated it, and have earned a very very modest income ever since. No kids, didn't buy a house until I was in my 40s, because them's the breaks.

Anyway, I remember our career guidance person giving a big talk one time about how if you didn't have someone paying for law school, and weren't there on a scholarship, you probably shouldn't be there. I was't in either of those situations. Here I am, 18 years later, stil paying off my loans - but one day they'll be gone, hopefully before I'm 50.

We make choices. Sometimes dumb choices. Sometimes choices that affect how we live for the rest of our lives.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP needs to be more specific. What is the house worth and what did he pay for it? What's the exact student loan amount? I don't think the OP has any idea of what "net worth" means. We need to do the math for her.

Thanks for the assistance. $310,000 mortgage and "estimated" value of $425. Combined student loans are $575,000.

Pay off loans asap the interest alone is going to take over your finances like a nasty weed. You are not UMC until you get rid of those loans?!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP needs to be more specific. What is the house worth and what did he pay for it? What's the exact student loan amount? I don't think the OP has any idea of what "net worth" means. We need to do the math for her.

Thanks for the assistance. $310,000 mortgage and "estimated" value of $425. Combined student loans are $575,000.

Pay off loans asap the interest alone is going to take over your finances like a nasty weed. You are not UMC until you get rid of those loans?!

Do not listen to the above advice. If (a) you and/or your partner are in PSLF-eligible jobs and (b) you have been getting your PSLF certifications, stay the course until you’ve done the 10-year service and get the loans forgiven. It will suck to have tight finances, but that is the optimal outcome short of a tripling of your household income.

[Anonymous]

Yes do that but only if you qualify for loan forgiveness and that is still in action in 10 years

[Anonymous]

op, do you both qualify for loan forgiveness?

[Anonymous]

Anonymous wrote:Yes do that but only if you qualify for loan forgiveness and that is still in action in 10 years

pslf is a contract right. Even if the Feds tried to eliminate the program, existing borrowers in the progoram would be grandfathered in. Possible that the government could try to cancel it retroactively, but there would be lawsuits to fight it. Both Obama’s proposed reforms and Trump’s campaign platforms treated the programs as grandfathered in for existing borrowers already on the PSLF track.

[Anonymous]

Anonymous wrote:PP again: I went to one of the fanciest law schools. Top five in the country. Most people graduating went to big firms - I came from what I thought was an UMC background but learned there that I was actually a hayseed; I didn't have parents footing my law school bill and I didn't even know what a big law firm was when I started law school. I tried biglaw for a year and hated it, and have earned a very very modest income ever since. No kids, didn't buy a house until I was in my 40s, because them's the breaks.

Anyway, I remember our career guidance person giving a big talk one time about how if you didn't have someone paying for law school, and weren't there on a scholarship, you probably shouldn't be there. I was't in either of those situations. Here I am, 18 years later, stil paying off my loans - but one day they'll be gone, hopefully before I'm 50.

We make choices. Sometimes dumb choices. Sometimes choices that affect how we live for the rest of our lives.

I also went to a Top-5 law school. You sound very naive or fragile for not sticking it out in biglaw for more than 1 year. You're still paying off your loans 18 years later? Most of my friends from law school paid off their loans within 2-4 years of graduation, as did I, by just grinding away in biglaw. During law school, I didn't know anyone whose parents were footing the bill, nor do I think there were many "scholarships" for law school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I feel for you op. People act like what until you pay off student loans to have kids. Infertility is real. In my office of women lawyers, every single one of them over 35 is having trouble. We are super close so I know they’ve been trying and the troubles they’ve had. I went to a top 25 law school with partial scholarships and then into government and Dh went into non-profit (no loans for him). We are from the south so we started trying for a child at 26. Infertility. Didn’t see that one coming. Luckily, we didn’t wait until mid to late thirties so we had plenty of time to try everything we could before resorting to IVF. Then I went into private practice to try to pay off my loan faster. Worst mistake of my life. I won’t go into all the horrors of my law firm but if I could do it all over again, I would not have gone into private practice. All your problems are not magically solved if you go into private practice that’s for sure. Good luck.

True, but then you have to live with a lot of debt. You have to pick and choose what you can live with. For most of us, you can't have your cake and eat it too.

I had my first at 35 and second at 38, so it's not like I don't know about waiting to have kids. And I'm not a lawyer.

And I never said you could have it all. It’s just people willy nilly push waiting to have kids and with their kind of debt it may not be so easy.
Even though the DC area doesn’t believe it, fertility is on a finite timeline! She’s getting hounded for having kids and not waiting which is crazy to me.

Plenty of people have kids in modest apartments, condos and town homes. Do you get it?

People don't go to law school to live in modest apartments. Do you get it.

Np. But in this case, they should!

Then all that sacrifice, had work is all for nothing.

At the end of the day, there has to be some point, no?

You know what? Sure. Live in a prime location now; you deserve it. Lease that fancy car now; you deserve it!

Later...be saddled with debt for life, die destitute, and leave your children with nothing but resentment and the burden of your care. Leave this world in debt and nothing to show for your work. You deserve it.

AMEN!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How old are you? Is this another one of those.. "I make x figures and I should be able to live like Y like those other folks (who happen to be like 15 years older than you"?

I'm 49, DH is 54. We both grew up lower/middle class, but neither of us have student loans because we worked our way through college, and I commuted to college from home. Those were the things I gave up to not have a loan when I graduated.

I lived below my means even when I started making six figures almost 20 years. That's how we were able to afford a nice house with a smallish mortgage.

If you are under 40, you have a ways to go. Yes your income is high compared to the rest of America, but not compared to the DC area. That's the problem. We used to live in an area more expensive than here.

Set your expectations to what is reasonable. Otherwise you will always feel like you're just keeping your head above the water rather than inching towards the coastline.

I am as you describe under 40. Unfortunately I had no opportunity to make decent income until after I took out my student loan debt - the IT industry went into full outsource mode just as I was ready to move up from my entry level position. You are right that there is always another $100k income I need to grasp at. Unfortunately my field is not that profitable in the private sector.

The IT field did not go full outsource mode. There are plenty of jobs and companies hiring. You either don't have the skill level or qualifications needed or are not trying hard enough.

I agree. Both DH and I are in IT and there is so much money to be made, it is obscene. I dont even have a degree and am on track for 300k this year. Dh makes a bit less, but had ridiculous RSUs.

[Anonymous]

Anonymous wrote:I'm a little worn out from the grind so just wondering if this whole UMC life becomes more comfortable once your net worth is in the green. Not looking for budgeting advice but would love to hear other experiences. Quick background, I grew up poor but now our combined income is ~$220k/year. Unfortunately our net worth is -$700,000 with the vast majority of the negative being new 30 year mortgage and two absolutely massive student loans from law school. It would be 7 figures in the red if not for our retirement accounts and the "equity" in our townhouse. I am very bitter about my student debt but I have to admit it was the price I had to pay to make six figures. My social security statement shows that the most money I made prior to law school was $28k in a year.

Our cash flow is fine although the vast majority goes to daycare (2 kids), mortgage, huge student loan bills, and insurance. My parents visited recently and were shocked that we weren't popping bottles of champagne and burning bills given that our HHI is probably 5x what they ever earned (and they actually have a SFH). So what is the point of this rat race and when do you actually come out ahead?

You will feel much better when the kids are out of daycare. It is amazing how much that sucks up. Simultaneously, being a dual income household, someone oe.both of your careers will really take off. Your income still isnt great for 2 college educated people. It will get better.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Threads like these make it so, so clear how much more important no student debt is than any pressure to get the degree in a high paying field. Unless it's a T1 university, and you're planning to commit at least a decade to the soul-sucking route of whatever profession you're choosing, prioritize a low debt. You will have so.many.more.options in your life.

And if you do end up making a low-UMC salary, you'll actually be able to enjoy it.

I think they should’ve also prioritized paying down debt before the kids and house.

And ... this is how high student loans really limit your options. Their student loan debt is so high, that even if they lived on one salary (at their current salaries), it would take them close to a decade to pay it off. That might really be too late for children.

[Anonymous]

I reading many stupid answers and advice on this thread. OP's issues have nothing to do with having children or buying a house. Stop the nonsense.
The truth is that they took over half a million in student loans to end up with miserable low paying jobs. They have to be the stupidest lawyers I have ever seen.
They may have gone to the worst law school in the country. You got ripped off. What were you thinking?
Maybe you read too many posts talking about the rich life of biglaw partners on DCUM? Well, you got punk and now you are half a million in debt with nothing to show for.
This is your one and only problem. You have to find a better job asap.

[Anonymous]

Anonymous wrote:I reading many stupid answers and advice on this thread. OP's issues have nothing to do with having children or buying a house. Stop the nonsense.
The truth is that they took over half a million in student loans to end up with miserable low paying jobs. They have to be the stupidest lawyers I have ever seen.
They may have gone to the worst law school in the country. You got ripped off. What were you thinking?
Maybe you read too many posts talking about the rich life of biglaw partners on DCUM? Well, you got punk and now you are half a million in debt with nothing to show for.
This is your one and only problem. You have to find a better job asap.

This. You need to be making A LOT more money. Your HHI needs to be around 450-500k to pay off this debt.