Anonymous wrote:You are not very smart considering you're a doctor.

Your are the trolly twat waffle that attacked me, the lawyer. Bitch bye

Anonymous wrote:OP, I'm also a single mom with one child and a similar income. I feel very fortunate to be able to support myself and DS in a pretty comfortable manner but you are right - it's tough to make all these decisions on your own! I like this board, if you dig through all the brags/insults there is often solid advice. I also highly recommend the Bogleheads forum (though I only lurk there) which provides a wealth of in-depth investment knowledge.

Hi other single mom…glad you're here, and that I'm not the only one who feels overwhelmed at times. I agree that there is solid advice to be found here, as long as one brings a thick skin to the party. I will check out the Bogleheads forum, and if you're not already on Mint.com as a prior poster suggested, check it out. I downloaded the app today and it's a pretty awesome budgeting tool.

OP, I'm also a single mom with one child and a similar income. I feel very fortunate to be able to support myself and DS in a pretty comfortable manner but you are right - it's tough to make all these decisions on your own! I like this board, if you dig through all the brags/insults there is often solid advice. I also highly recommend the Bogleheads forum (though I only lurk there) which provides a wealth of in-depth investment knowledge.

OP here…I checked out the Dave Ramsey podcast today and caught this gem…"Go into the December holidays with a plan. I don't want you to come out in Jan/Feb with a mountain of debt because you didn't have a plan. Also you know who does have a plan? The mall. And the plan is to take your money."

Lol! This'll be great to listen to on my commute.

I'm the "you are impressive" PP and want to make a recommendation: I listen to the Dave Ramsey podcast almost every day (it comes out M-F daily, free). It's a call-in show where people call with questions or to celebrate being debt-free. It's incredibly encouraging. He's a bit of a right-wing-evangelical nutjob, but on the whole has really down-to-earth, no-excuses, get-it-done advice (often for doctors who just went from 30K to 200K and are spending like there's no tomorrow). I just find the show really encouraging. Keep on keeping on doc!

OP here...yep, it would take me 22 years and 1 mo, to be exact. Re: the mortgage, a few banks (fewer since the housing crash) still offer what are colloquially referred to as "doctor loans", which account high debt/net worth ratios based on our statistical job security (barring obvious outliers). Doesn't mean it's a great idea to take on one of these loans, just that it makes home ownership possible. I'd rather wait and do it when we can afford it, though.

Regarding $800/mo discret income, yes, it's low, and we don't always meet it. For example, last month I sent a nice housewarming gift to a girlfriend and we went over. But generally our expenses our low; I only drive to work and we walk everywhere else (hence the high-rent area), groceries at Aldi (but I eat at the hospital when I work), etc. But it will be hard to stay at this rate. I also need to address my social life and some point, and that always means more $$ going out. I will try Mint.com to track things. Great idea.

At $1000/month for your student loans, it will take almost 20+ years to pay off. I would double or triple the student loan payment even if the interest rate is low - and put nothing into the 529 right now. Plus, chances are you wont qualify for much of a mortgage with all that debt.

Sounds like you believe you net $4000/mo after your bills. This is probably not correct - have you signed up for mint.com yet? Then you can see what you really spend on what every month. $200/week is totally not enough for almost everything you spend money on other than regular bills.

OP here...I know I said thanks a few times, but I just want to express how much it means to get this kind of help from an anonymous forum. This financial stuff has weighed very heavy on me since DD was born, before which I was basically a financial disaster. No big debt other than school, but to say I wasn't on a budget is a bit of an understatement. Like many of my peers out of residency, I felt fatigued after eight years of being a broke student/resident. When you finally start making some money, despite the looming loans, it's really easy to eat out, go out, take crazy trips, etc. And for a few years I had a lot of fun.

The interesting thing about it though, is that it didn't take long to feel pretty hollow. DD coming along whipped my life into shape pretty fast, but what's interesting is that feeling accountable to someone/something adds meaning to my life that all those luxuries could never provide, even if our lifestyle is much leaner. It also helps to get a daily reminder through my job that, compared to many other families, our struggle is quite minimal. When my non-English speaking patients tell me that their toddler is back in their home country with grandparents and they are sending money back from their cleaning job, it really hits home.

Being a single parent is lonely sometimes, and while I'm actually quite happy with just DD and I for now, one of the hardest things is not having a partner to run stuff by when it comes to big life decisions. Rent or own? Save or invest? An earlier poster chided that "for a doctor", I'm not very smart. Not a helpful comment, obvs. But when it comes to $$, it's not inaccurate. Given the average debt incurred by American medical students (119K for public med schools, 150K for private, usually in our 20's, and those are 2003 numbers), it's surprising the amount of financial counseling we receive; i.e. zero. I think about folks incurring signif debt for undergrad and imagine it's worse.

Anyway, I'm psyched about this plan, and it's an exciting way to enter 2014. Thanks all!

Anonymous wrote:
OP here. This has been such a huge help! Amazing the great advice that comes from these boards. I feel galvanized to make some progress on my debt from med school…the thought of getting out from under these loans while DD is still young (and thus freeing up funds for our house/her college/my retirement) is really exciting. Housing and childcare costs will evolve over time, and I will have to re-eval when she starts pre-school (we are not in bounds for public preschool but are for pre-K). That said, here is our new budget:

• Rent: $2850/mo
• Nanny: $2400/mo
• Student loan: $3500/mo
• IRA contribution: $458.33 (to max out annual contrib of $5500 for tax purposes)
• 529: $120/mo to match Dad’s contrib
• House down payment: $600/mo
• Comcast: $100/mo (cable and internet; I could probably cut cable)
• Cell: $107/m0
• Car insurance: $171/mo
• Pepco: $75/mo
• Groceries, entertainment, travel, gas: About $800/mo

Total: $11,181.33/mo


This leaves a monthly cushion of $818.67 (not much). But at this rate, I can pay off that loan in 5 yrs and 7 mo, with an estimated interest cost of $17,929 (at my current monthly payment of $1100/mo, it would take me 22 yrs and 1 mo, with an interest cost of $75,764, so this saves me $57,835.). Then if I continue to save at that rate for another 4 mos, I can get to $100,000 in the home down payment fund, which will give me a 20% down payment for a 600K house (this would have to be in the Midwest). Next, throw the savings toward DD’s college fund (I’ll have 10 years to get her 529 up to speed before she starts her freshman year) and ramp up my retirement savings. It will take discipline to stay on this budget as DD gets older but I think that’s what we have to do.

How does that look? Doable?

OP, you are impressive as heck. Well done.

I'm one of the PP who recommended aggressively paying down your student loan. While *I* would put 100% of my extra towards the loan (and keep no house down-payment fund, I like to really aim at one thing at a time and knock it out), I think your plan is very workable and will get you exactly where you need to go. Make sure that any raises you get are aimed directly at that student loan. If you can pick up two extra shifts per month (maybe if DD is with her Dad or another family member), put that overage directly to your student loan. When you know that anything extra you earn will be put directly against your debt, instead of joining the swirling sea of money that ebbs and flows without a budget, you will be more motivated to try to earn a little extra here and there (though you already work a ton, I know, and no pressure at all to increase it. You need time with your kid.) At all times, make sure that the extra loan payments are applied to PRINCIPAL and not to future interest (they're sneaky sometimes).

Good luck to you and keep that motivated spirit going! (Make a chart of your debt and put it on the fridge, color in the extra payments with your daughter each time you send another extra payment, something like this to keep yourself motivated. Four years is a long time, but four years will go by no matter what - if you stick to it you'll be debt free at the end of it!!)

Anonymous wrote:
OP here. This has been such a huge help! Amazing the great advice that comes from these boards. I feel galvanized to make some progress on my debt from med school…the thought of getting out from under these loans while DD is still young (and thus freeing up funds for our house/her college/my retirement) is really exciting. Housing and childcare costs will evolve over time, and I will have to re-eval when she starts pre-school (we are not in bounds for public preschool but are for pre-K). That said, here is our new budget:

• Rent: $2850/mo
• Nanny: $2400/mo
• Student loan: $3500/mo
• IRA contribution: $458.33 (to max out annual contrib of $5500 for tax purposes)
• 529: $120/mo to match Dad’s contrib
• House down payment: $600/mo
• Comcast: $100/mo (cable and internet; I could probably cut cable)
• Cell: $107/m0
• Car insurance: $171/mo
• Pepco: $75/mo
• Groceries, entertainment, travel, gas: About $800/mo

Total: $11,181.33/mo


This leaves a monthly cushion of $818.67 (not much). But at this rate, I can pay off that loan in 5 yrs and 7 mo, with an estimated interest cost of $17,929 (at my current monthly payment of $1100/mo, it would take me 22 yrs and 1 mo, with an interest cost of $75,764, so this saves me $57,835.). Then if I continue to save at that rate for another 4 mos, I can get to $100,000 in the home down payment fund, which will give me a 20% down payment for a 600K house (this would have to be in the Midwest). Next, throw the savings toward DD’s college fund (I’ll have 10 years to get her 529 up to speed before she starts her freshman year) and ramp up my retirement savings. It will take discipline to stay on this budget as DD gets older but I think that’s what we have to do.

How does that look? Doable?

I think this looks very doable, OP. I'm one who advises paying your student loan off ASAP - I know others think you should prioritize investing given the low interest rate, and I do understand that argument, but you will already have $23K annually in retirement savings in the stock market, which may or may not continue the rapid growth we've seen in recent years. Meanwhile paying off your debt is a sure thing and I think you'll sleep better when that balance is lower. Even cutting it in half would be huge.

You may also want to think about putting some of your $50K savings into the market - maybe $10K so you can buy Admiral Shares of a Vanguard balanced fund (I like Wellington) and then add half of your $600 monthly home savings there. Obviously there is risk with a 5-year timeline for buying, but inflation is a risk too.

In 5 years you will feel as though you've received an enormous raise (your DD will be well into school then too, which will cut your childcare costs unless you go private) and you will be in great shape to catch up.

You seem disciplined enough to make this work. Good luck!

OP here. This has been such a huge help! Amazing the great advice that comes from these boards. I feel galvanized to make some progress on my debt from med school…the thought of getting out from under these loans while DD is still young (and thus freeing up funds for our house/her college/my retirement) is really exciting. Housing and childcare costs will evolve over time, and I will have to re-eval when she starts pre-school (we are not in bounds for public preschool but are for pre-K). That said, here is our new budget:

• Rent: $2850/mo
• Nanny: $2400/mo
• Student loan: $3500/mo
• IRA contribution: $458.33 (to max out annual contrib of $5500 for tax purposes)
• 529: $120/mo to match Dad’s contrib
• House down payment: $600/mo
• Comcast: $100/mo (cable and internet; I could probably cut cable)
• Cell: $107/m0
• Car insurance: $171/mo
• Pepco: $75/mo
• Groceries, entertainment, travel, gas: About $800/mo

Total: $11,181.33/mo


This leaves a monthly cushion of $818.67 (not much). But at this rate, I can pay off that loan in 5 yrs and 7 mo, with an estimated interest cost of $17,929 (at my current monthly payment of $1100/mo, it would take me 22 yrs and 1 mo, with an interest cost of $75,764, so this saves me $57,835.). Then if I continue to save at that rate for another 4 mos, I can get to $100,000 in the home down payment fund, which will give me a 20% down payment for a 600K house (this would have to be in the Midwest). Next, throw the savings toward DD’s college fund (I’ll have 10 years to get her 529 up to speed before she starts her freshman year) and ramp up my retirement savings. It will take discipline to stay on this budget as DD gets older but I think that’s what we have to do.

How does that look? Doable?

for some reason every time I tried "fund" it ended up as fun - you know what I meant!

Your student loans are low - I wouldn't pay a penny extra but would invest any discretionary amount in an Vanguard index fun- you can get some that are a blend of bonds, cash, stocks, though beware of bonds with rising interest rates.

I would continue to max retirement, make sure you have an emergency savings fun (in cash), and to the extent there is a tax deduction for the 529 investment, I would capture that but agree with PP that college will change in 20 years, so I also might be inclined to ignore the 529 altogether.

My advice would be different if you were going to blow the $$, but since you are disciplined to invest, I would maximize investments and minimize fixed debt repayments when the rate is so favorable.

When you buy a house, I would get a 30 year fixed rate mortgage- in theory over 30 years inflation and income will rise and that payment will be a powerful hedge against inflation. IMO paying that much extra for a 15 year is not worth it.

FWIW, I'm bullish on investment, long-term return of the market, and long-term low interest rate debt doesn't bother me a bit, so long as I have equivalent or greater assets appreciating at a faster pace on my balance sheet.

Anonymous wrote:In addition to the 401K, are you contributing to an IRA? You should put aside another $5500/year toward that since you really need to catch up on retirement. Your income is too high for a Roth but you can open a traditional and then do a backdoor Roth. Or just keep it in the traditional if you prefer. But you should shoot for putting aside the maximum $23K annually in all tax-advantaged retirement space available to you before accelerating loan payments further. Of your $4700/month I would prioritize/allocate savings as follows:

1. Retirement ($458.33 monthly on top of the 401K contributions deducted from your paycheck)
2. Student loan repayment ($3500 month will pay off $210K in 5 years or so)
3. Home down payment savings ($600/month just to have something here - can also serve as additional emergency savings. If you push home ownership out till after you've paid off your loans you have a longer time horizon, and could consider putting the money into a balanced fund like Vanguard Wellington)
4. 529 savings (throw the remaining $140/month here, to roughly match her dad's contribution).

Good luck!

Oh wait, you have $4400/month, not $4700. I'd keep the top two as is and reduce the latter two by $300 wherever it feels best for you.