My Student Loan Baggage

One of the few topics in Dave Ramsey's Total Money Makeover that really irks me is his discussion of student loan debt. I'm not saying his points are all without merit. But when he talks about credit cards, he seems to understand that the mental/emotional game is just as important, perhaps even more important, than the financial one. And so he recommends paying off your lowest balance card before your highest interest card, purely so you can see results sooner. And I totally get that. But he does not allow for the same types of emotional weakness when it comes to student loans. Consider the rant of his in this link for instance. Ouch. That's all I can say. And since I am one of those previously professional, now stay-at-home mom's with over $100K in debt he's ranting about, it can't get much more personal than that.

When I look back over my life, there is only place I can think of that I maybe should/would have made a different decision about my education. And that was when I chose to keep pursuing a PhD in a field I wasn't sure was a good fit for me, instead of being willing to start graduate school over, or at least stop with a masters. Given that my graduate tuition was paid for, however, and that I was receiving a stipend for most of my living expenses, cutting out that leg of the journey wouldn't have changed that much. Maybe $20K less at best.

Growing up, we were poor. Like free school lunch, hand me down clothes from cousins, can't afford a school yearbook poor. I vividly remember my mom dividing one family size can of spaghettios between the 4 of my sisters and I, plus a glass of milk, for lunch. I was a small, hungry, skinny and very active kid, who hung out a lot at my friend's houses bumming snacks. My mom and dad fought constantly, and would have no matter what, but certainly a major theme of their blowouts was money. There was never enough of it, and it seemed that would never change. My mom often grew wistful in private about how, despite how smart she had been, she had dropped out of college after only a year or so at her first husband's insistence (my father) and never found her way back once the babies started coming with her second. And worse, how she could never leave her abusive second husband because she could never support the 5 of us on her own.

I'm not sure how directly it was ever stated, but I grew up with the clear impression that it was absolutely imperative that I go to college some day so that I would be able to support myself without a man. But that there would be absolutely no financial help for me to do so. This was further complicated by my step-father's abusive put downs of me compared to my sisters, and his continuous proclamations that I was never going to be good enough for anything.

Given the trouble I was often into growing up in a home like that, there were many years it seemed like he was right. There were many years I didn't bother with homework. For a period of time, I was suicidal. And I was pregnant before I was out of high school. But I harbored a deep, driving need to prove him wrong as well. And despite his insults otherwise, I was actually quite intelligent. And seriously driven to believe that there was a way out of my childhood and into the type of future I had always dreamed of. Halfway through high school, I turned over a new leaf and started to show what I was capable of academically, though my new daughter senior year complicated things a bit.

When I was applying to colleges, the last thing on my mind was the amount of money I was taking out in student loans. Certainly I qualified for every need based option possible, not to mention a few merit based ones as well. Imagining what that payback would look like 5 to 10 years down the road when I finally had a real job and was out of this mess seemed besides the point. My burning questions were: Am I really capable of this? A 4 year degree at a respectable university with a child? What if they see only what my step-dad saw? What if I am doomed to repeat the same life for my daughter as the one that was given to me?

But I got in and I did my best. My first year I did outstanding actually, but the second year my young marriage began to fall apart and afterwards, it took a couple years of struggle before my daughter and I found a new equilibrium. My last two years of undergrad I did much better for the most part, and somewhere during that time, I realized that to become anything more than a lab rat with my degree, I would need to apply for graduate school. In this sense, Dave's rant doesn't completely apply to me. I did understand that I needed to be highly marketable to pay for all this.

At that point in life, I was pretty clear that I wanted to be a working mother. I loved my daughter dearly, and was very much looking forward to being done with school and having more time eventually. But I was the kind of person who got depressed without something intellectual to pursue. Something for myself separate from my role as a mother. Perhaps partly because I had become a mother before I had gotten time to be just myself. As exhausting as it was during the semesters, school holidays were often worse because I just got so depressed with nothing to work towards.

If you had told me that I would one day choose to be a stay at home mom, I would have laughed in your face. Dave can say that young women without kids yet have no idea how they're going to feel when they do, but I think that's overly simplistic and implies we all want to stay at home deep down. I'm a stay at home mom now, and I'm still not always sure its what I want to be doing. Furthermore, I already had a child at that point. I did know what it was like. If I could have had the option to work only part time with a young family, that probably would have been my first choice. But that is not a realistic possibility in most fields, least of all mine, and I was not unrealistic. I figured with a PhD, I could make enough that my future husband could stay home if we wanted.

Graduate school was hard though. Really hard. My fears about not being good enough were constantly at an edge when surrounded by so many other brilliant people. I had developed a fuzzy, idealistic picture of my doctoral field while leisurely pursuing undergraduate research with lower expectations I had no trouble meeting. This vision was shattered to make room for the more brutal and difficult reality of what higher academia really was. The relationship with my advisor slowly went from love to hate. Somewhere along the way, I began to question whether I was really doing this for myself, or just to prove that I could. Some days, I began to acknowledge that despite how far I had come, it was possible I was moving in the wrong direction.

That is the one point in my academic journey I regret. If I had been brave, or maybe even just less tired, I would have thrown in my first 2 1/2 years of research and allowed myself to start again in a new field. If I had done this, perhaps I would be happily pursuing my new career even now? I had an inkling of what at least some of those other possibilities could have been. It wouldn't have set me back more than a couple years (though that would have added even more to my debt!). But that light at the end of the tunnel I had been impossibly chasing for so long was finally so close. I had already passed my preliminary doctoral exam. I had my project all mapped out. I just needed to buckle down for 3 more years and do it.

And so that's what I did. I figured when I was done I could work on re-branding myself in an area of research I was more interested in for the job hunt. Instead, I found myself perfectly trained to do exactly the type of research I did not want to pursue. But it sure payed well. Even if it did necessitate moving halfway across the country.

It seemed like that would be enough, eventually. But it wasn't even close. And despite my husband (then boyfriend) being brave enough to come along with my daughter and I and start this new life together out west, it just never felt right there. We just couldn't get settled. We couldn't get to a place where the future we  had pictured together seemed possible. We couldn't define what needed to shift. And despite crossing the 30's threshold, we couldn't possibly imagine starting a family in that life and place.

Through all of this, my daughter moved into her teenage years, and despite being very close when she was younger, she suddenly wanted nothing to do with me. It became painfully obvious that though my school was finally done and I was ready to focus more fully on her, she no longer had any interest in focusing on me. That ship had sailed, so to speak, and I had missed my boat. That was hard. That was very hard. And it made me reflect a lot on my plans to start a family again soon. The role I wanted to play in my new children's life and the type of mother I wanted to be. As my regret grew, I also stopped giving a crap what other people thought about how capable I was. I had gotten a PhD for cripe sakes. What more could they expect of me? And it was my right to decide what I wanted to do with that degree from that point on. Obviously, it was always my right. But that was when I finally realized it.

So anyways, long story short, with my boyfriend's blessing, I quit my high paying job and decided to become a stay at home mother with over $100K in student loans instead. It was a rough few years of transition. At this point, my husband finally makes a pretty decent income. Almost as much as I used to (and adjusted for the midwest, probably a lot more). But with three kids, primarily one income, and a student loan payment of over $600/month, it never goes as far as it seems like it should. It's going to take us a while to get out of this mess. And though we are now over 4 years into this new life path, it's hard sometimes to accept where we are now compared to where we used to be. Hard to know that we will probably never live in a beautiful home/location like that one ever again. That it will be years, eons, before we can afford another fancy trip. That given the realities of our budget, money is going to continue to feel like a struggle for probably at least another 5 or so years until I'm working again. My husband and I find that hard. And depressing. And Dave would probably just say "What did you expect!?!"

...A chance to live a life much different than the one my parent's gave me I guess. A chance to feel like I had enough money to never be trapped in a relationship that was bad for me. A certainty that my children would always have enough to eat, as well as year books and new clothes and maybe even stories about trips to Disney World with our family last summer. I probably didn't need a $100K education to secure all those things, but it was an emotional journey for me that took a while to figure out.

For now, I comfort myself with the fact that though this is not always the life of my dreams, it is finally the life of my choice. I am choosing to be much poorer than I could be. I am choosing to temporarily give up most personal and intellectual pursuits (though I did start a secret blog!) so that I will have fewer regrets next time about the mother I am to my children. I could do it differently, and from time to time I check in and make sure this is what I still want. So far it is.

How We Got Into This Mess

I’ve been starting to find a lot of good debt blogs, which I’m hoping to provide links to on my own blog soon. One type of post I’ve noticed on some of these that I haven’t yet done here, is a debt history entry. Or as I’ve titled it here: “How We Got Into This Mess”.

Sometimes I’m a little surprised to find myself here, because back when my husband (then boyfriend) and I were both working 6 years ago, there was a point where we were making quite a bit of money.  During that two year period, we managed to pay off all the credit cards we had at that time (due to divorces and our big move west for my job) as well as the remainder of hubby’s student loan. We did not, however, manage to save a dime towards retirement or anything else. And we went on at least two fancy trips. And ate out a lot. And didn't even look at price tags in certain stores. We also did not own a home at that point, and were paying a small fortune to rent a very nice one (we needed one with with space for our huge dog to run!), while paying only the minimum on my student loans.

Each month we wondered how we could possibly make so much money (some months we brought in more than $10K total - after taxes) and still have nothing left to save towards a house or retirement by the end of the month. I have a few defenses for this. One is that I was less than two years out of graduate school (finally!) and after having been a young, poor, and mostly single mom for that difficult 11 year period, I had a big wish list for life. I needed some fun time. Additionally, my field was very specialized, and required us to live in a very expensive area on the west coast. We were both completely shell shocked by the cost of living adjustment our first year. The price of things like cheese always floored me. Plus, Hubby and I weren't actually married yet at that point, and despite entering our 30's, we were simply not ready yet to buckle down and get serious about financial planning.

So that’s my list of reasons, minus a lot of things I could say about hind sight that you can fill in for me if you like. That period of my life ended almost 5 years ago when hubby and I made the difficult, but long coming decision for me to quit my job (or really career in this case) and move back to our hometown in the Midwest. At that point, we did begin to reign it in a bit in preparation for the 60% reduction in income we would be undergoing in a few short months. We stop planning for the next big vacation and started planning for the journey home instead. We cut back on spending, and put a little away each month for the huge moving expenses we knew from experience that we would be racking up soon. Not nearly enough, but it helped. And I began to look into information on starting a new home business.

We made a mix of good and bad financial decisions over the next few years, but also worked very hard. That first year back, I often spent upwards of 50 hours a week laying the groundwork to get my business up and running, and even took on housecleaning jobs in the meantime until my cash flow became more regular. Thankfully, hubby's job was able to come with him on our move, but the recession had just kicked in and there would be no cost of living raises that year. We had a few thousand in credit card debt again from the move we had to pay on, but we put my student loans on temporary forbearance (which sadly wiped out all progress we had made thus far).  My daughter had hit the difficult teenage years, and no matter how much we made, it could never be enough to acquire all the things she was certain she needed (and that every other person she knew already had). Additionally, I felt bad downgrading her too much from what she had become used to at that point, given that the second move was hard enough on her, and certainly not what she had wanted or expected. In all honesty, we had a bit of a hard time adjusting to all of that ourselves actually, and though our rent was much cheaper than it had been out west, it was still much more expensive that what we probably should have taken on. But we felt we needed to step into our new cost of living situation gradually, so as not to give up everything we'd had all at once.

Now that we were back in the much more affordable and homey midwest, we finally felt able to settle down and begin working towards our future together. We got officially engaged and started looking into homes and saving for a down payment. I settled in to my new work routine and despite how much tighter things were, we managed to put away at least $700/month during most of that first year. And though I feel our wedding was perfect, it was a small, elegant but inexpensive, at home affair that did not set us back too much more. Can't say the same for my amazing ring though. (I made it clear there was no way we were spending less than he spent on his ex and I still do not regret that!) We also had a short, but sweet honeymoon that added a little more. And within two months of all that shenanigans, we dropped all our saving and then some into our new house.

Despite putting a little more on the cards to get all settled in, I think our house was a good purchase. A huge step down from what we'd had out west, and more than $1000 per month less than our rent had been even after moving back to the midwest. But a respectable, comfortable, suburban home in a good neighborhood none the less, with a payment we could afford. We bought it at what was the market low (at that point) and with a great fixed interest rate, and it has plenty of room for a family. Therefore, we immediately jumped into the next stage of our long term life plan - babies! And what with that first "Holy Shit" ultrasound, and the later preterm birth that twins tend to bring, less than 12 mos after we said "I do" we had two of them! Not to mention a lot of unexpected time off from work (and savings) on my part due to bed rest.

Somewhere in all of that, there was also a long distance wedding trip, a number of car issues and more than one or two home owner issues as well. We did not have an emergency fund yet at that point, so anything extra was a problem. Plus, my daughter had turned 16 and begun driving, and no matter how crappy a car you give them, the insurance still sucks. Its no secret that kids tend to be the most expensive at the bookends of your 18 years with them, and unfortunately we had some on each end. I had to keep my work hours while I was breastfeeding (and not sleeping) to less than half of what they had been pre-baby. We started getting a grocery delivery service rather than shopping ourselves, despite the extra expense, cause we couldn't figure out how to manage life without hating each other otherwise. And as thankful as we were for hubby's work from home job that came with us on our big move, it was far from competitive in pay (though excellent in health coverage thank goodness), and yet we just didn't feel like we could manage him finding something out of the home until we got closer to the boys first birthday.

Lest I mislead you, there were some toys in there too. We got a new flat screen tv, and we had cable, netflix and audible subscriptions. We both got iPhone 3's when the 4's came out and have since upgraded. We got a new laptop when the old one died. We ate out a couple times a week at least. We took a couple modest vacations. We purchased memberships to the zoo and museum. We weren't partying, but we weren't suffering.

None the less, fast forward to about 18 mos. later and we have finally begun to catch our breath again. Hubby did find a new job outside the home that pays much better (though that required me to cut my hours even more initially, and necessitated another car purchase). We stopped hemorrhaging expenses and started simply treading water instead. I think its been over a year since we even used a credit card,which means we have mostly gotten the hang of living within our means (pre-child support loss at least!). And we did finally get an emergency fund going. But its been pretty clear that we haven't made much of any real progress towards wiping out the debt we accumulated either. And as we slowly inch towards the end of our 30's, it is clear that the time to start planning for our financial future is now. Like, so right now, its yesterday.

So that's how we got here. Nothing completely stupid I don't think (well, maybe ring. But since I'd do that one again, I don't think it counts), though lots of things we could have done a bit better. And today, on this Thanksgiving Day 2012, I am thankful that hubby and I have both the means and dedication to tackle this massive financial overhaul, so that our future can be a bright one.

Grocery Day

It is sad, but I was actually having trouble sleeping last night due to worrying about grocery day today.I feel doomed to over spending failure. I did finally manage to go one week last week without visiting our discount warehouse store for supplies. (You know, that big box store that's supposed to be saving us money, but so far seems to be costing us more instead due to the bulk amounts.) But it seems like that just means there will be twice as much this week instead, so I'm not that impressed with myself anymore.

Other than our mortgage, groceries is our single biggest monthly expense, and I really feel that getting control of our finances is going to require some soul seraching in this area. Looking over the list (20 items!), I would say that close to half the items are things that are going to last us for quite a long time, so perhaps it is once again that we are just still in the bulk up phase. We've been in this phase for a month and a half now then though. And we really need to be out of it by next month because I am projecting Dec and Jan to both be particularly tight. And then I look at the news and see things about food cost increases due to the drought this past summer, and fiscal cliff payroll tax increases, and I just want to scream a throw things. A little help please??

My husband is not much emotional support this week either as he seem to be struggling with it worse than me. I think it is mostly brought on by his job kind of sucking right now. But he got really annoyed the other day when I said he'd need to wait until pay day to get another new charger cord for his new iPhone (because of course the old ones are no longer compatible) because we used up all of last paycheck's discretionary budget getting the phone itself. He got annoyed and said that it sucks to work hard all day at a job he doesn't like to make all this money, and yet still not have $20 for a phone cord at the end of the day if he wants one. To which I was like, well we do have enough if you want to prioritize that over credit card debt, but we can't do both. He grumbled and went downstairs and was moody for the rest of the night even though he said he did think we were doing the right thing.

My thoughts upstairs were along the lines of, "Come on. You got an iPhone 5 this month. I got an iPhone 4. That's certainly not nothing. And you only need to wait 1 extra day!" He's not normally that whiny (though money issues does seem to be one of his buttons) so I think its mostly work. And I think its more generally the idea of not having enough money period that bothers him a lot more than the phone cord specifically. None the less, its hard to feel like a motivated, goal in site, on the ball team when faced with tirades like that. Also had to explain to him this week that planning a meal with beef instead of chicken because that's what we still have in the freezer doesn't actually save us money if we still have either chicken or beef every time in roughly the same ratios (assuming we never let it spoil, which we don't). To actually save money, we have to use less meat. He is a smart man. I'm not sure why that was hard for him to hear.

I've still been feeling quite motivated and very happy that we are working on this. I just wish it were not so mind numbingly slow! I've seen a number of blogs that mention the idea of "snow flaking" your way through your debt snowball. That is, finding lots of small ways to contribute regularly to the total sum. I think I need to look more into ways to do that, because I really need to find more chances to celebrate in what will undoubtedly be a long and somewhat frustrating year. I also need to get more comfortable with throwing this extra money immediately towards debt instead of holding on to it "in case", because it always gets spent that way. For instance, I realized out of the blue the other day that our bank check cards have been racking up points in one of those rewards programs for months (if not years) now. Turned out we had a little over $100 in cash back savings. Half of that went directly towards a credit card, but half of it got used for things like diapers and wipes this week due to funds being low after the phones.

As long as we truly stick to our budget, that extra should still be there at the end of the month to pay then. But we all know what often happens with things like that. Case and point: it was mailing in the buffer at the end of last month that caused us to be too short for the phone cord this week, and look how my husband reacted. Its hard to not want to keep some on hand to avoid situations like that. I think perhaps we need to have a discussion about keeping our state of mind in the right place for each other during this "small account buffer" period of our finances. I know it makes him uneasy, which in turn makes me uneasy, but this is how its going to be for the next few month if we are to make any real progress. We need to be each other's cheerleaders more often. We are doing something awesome and very worthwhile!

I wish my next money goal could be getting our grocery bill under a certain amount, but to be honest, until we get done with these initial bulk purchases (maybe this week?) I just don't think I can budget as well as I would like for that yet. One thing I am finally going to bite the bullet on though: a "best" price spreadsheet for groceries. We have up to 5 different stores we get things from at this point (though only 3 main ones) and trying to keep track of which place is best for which thing is driving me crazy, especially when sales come up. Granted, the idea of being the kind of crazy, price checking, coupon clipping, store hopping lady who has a list like that also makes me cringe. But as mentioned before, groceries is really the number one things we need to get a handle on in this house. Something must be done.

I already have two items I'm going to price check at two places before I purchase this week. As well as two coupons I printed and then discarded when I discovered the store brand is cheaper anyway. I did totally fall for a $5 store card with diaper purchase, only to realize as I was getting in my car that they had just marked up their regular diaper price by $5 (Bastards!). Actually, I think that was the very moment I finally accepted that I needed to make this spreadsheet. To redeem myself, I made sure to cut up and freeze the two extra bananas I didn't use after all this week, so that I can use them next week instead. To me, these are the true Baby Steps of Dave Ramsey's process right now. Because the distance between this Baby Step and the next one in the Total Money Makeover book feels more like an Olympic hurdle to me right now. But I am slowly finding my balance in this stage, and there are many milestones yet to come.

Realism or Another Cop-out?

I've been having a hard time finding the motivation to write again given the major Fail I feel like our money makeover ran into this week. It started out with good intentions. I wanted to feel more certain about Pulling the Trigger on our debt and making a big initial payment from my preliminary budget excess estimate. So I finally put it all down in a spreadsheet for the next year. All our fixed expenses, all our non-discretionary non-fixed expenses, and all the little extras we're still learning to trim. And I compared that with both our fixed and estimated sources of income. I've been doing this with Quicken for years actually, but somehow it looks different in Excel. Or at least, in this case, it looks much smaller. The excess that is. All I know is that somehow the $2000 I found before dissipated into only about $250. WTF?

Am I just that bad at this? I thought I was pretty good with math and estimating/projecting? I thought I was ready to make some sacrifices. Did I go too easy on us? And why do Quicken and Excel say such different things? The best I can come up with, (other than user error which I have repeatedly checked for) is that it has something to do with me doing specific month by month totals in Excel, whereas in Quicken its kind of a running average. For instance, the 30 day low balance projection in Quicken isn't much affected by the fact that grocery day will just happen to occur 5 time in Oct rather than 4 as usual. And the fact that some months get 2 paychecks, but a few months get 3 paychecks is sort of averaged out. In my spreadsheet though, each column gets only exactly what that month has (or doesn't) and so some months look much better than average, and others look much worse.

There's also a few things I hadn't really included in Quicken. The new car tires we need before this winter. Xmas. The fact that, for whatever reason, my home business is totally sucking compared to normal right now. Not to mention all the things I don't even know about yet. I tend to use more average amounts in Quicken, but I wanted my spreadsheet to reflect the worst case scenario so that I would know we could afford that much "no matter what". Be careful what you ask for.

Unfortunately, in terms of debt reducing motivation, these first few months seem kind of stacked against us. This month and Jan. look to be especially dismal, and Nov. and Dec. won't be much better. Feb and the spring should kick butt though, if we don't lose steam by then. Ugh. How to get this debt snow ball rolling? And not lose more traction in the meantime? The Total Money Makeover book answer is to start selling stuff. I repeat, Ugh. What if we're just...not that type? Lame, I know. Do I really want this or not? And if so, what am I willing to do for it? I'm still trying to answer that.

Hubby and I actually have talked a little about some things we could sell. Unfortunately, most of it would sell much better in the spring than now, but there are a few possibilities. I should stop sulking and start pricing. Sigh. Did I mention how little free time I have as it is, with two year old twin boys? This is seriously not how I want to be spending my time. There's a lot of things I don't like about the early part of this process though. Obviously, this isn't the fun part. The fun part is coming. Its just a few years out yet.

I need to keep the faith. I need to trust that this CAN happen for us. I need to believe that a stable, healthy and exciting financial future is a true possibility - no, Reality, for us. Its starting small. Very small. But it will get Big. And it is going to start with this goal: No matter what else comes up this month, or how the numbers seem to change, I am going to pay at least $250 extra (above the $500 minimum we are required to pay already) towards our credit card debt by the end of this month. Hold me to it!