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Increasing Student Loan Payments

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Nothing like being kicked when you’re down, right?

Well, I’ve had a good run. After 3 years of Income Based Repayment where our student loan payments were only a couple hundred a month (it varied, but was never over $300/month in total), I knew there would be some changes in store after updating our income info using last year’s tax information (this update is required annually). What I did not know or expect, was that the change would be SOOOOOO extreme.

Overnight, we went from a minimum payment of $300….to a minimum payment of over $1,000. THAT’S MORE THAN OUR MORTGAGE!!!! My take-home pay is under $5,000/month, so we’re talking over 20% of our income!!! AHHH!!!!!

After my update, I was notified that we no longer qualified for IBR based on last year’s income. Unfortunately, this occurred during summer when all our finances just went straight to hell so I didn’t give it much thought like I should have.  No thought, that is, until the payment was auto-drafted and my account ended up being overdrawn.

To say I “freaked out” would be an understatement. It was my own fault for not paying closer attention, but I felt totally blind-sighted!

So I did something that maybe (probably?) messes up my credit. But I felt I had no option. I called and asked for my student loans to go into forbearance status for a few months. It was approved the same day. I’ve continued making smaller-sized payments (in the $200-$300 range), but no payment is actually due until January. I’m trying to reapply for IBR with our current income (since the update was based on our tax information from last year, it showed a much higher salary than what we have this year given that hubs no longer works and I dumped my part-time job, too).

Re-doing our current income paperwork is a whole process, as you can imagine.  I haven’t completed it yet but my hope is that this voluntary forbearance gives us the time to get all the paperwork submitted and processed and – fingers crossed – maybe we can get approved for a more reasonable-sized payment. It will still likely be larger than in the past. But we just cannot afford $1,000/month right now as a minimum payment. We’d be much more comfortable in the $300-ish range. I did talk to a representative who said there are other programs available, too (e.g., I was told we could apply for the “standard extended payment”). I’d love to get back on IBR if we can qualify but, if not, I’m glad other options exist. The one problem is the TIME it takes for all that stuff to be processed. I felt backed into a corner with the forbearance because I needed a lower payment NOW and didn’t have time to wait a month (or however long) for a new application to be processed and approved (or potentially rejected).

So that’s where we’re at with my student loans. Another piece of the messy financial puzzle.

Ashley

Texan at heart; Arizonan on paper. Lover of running, cheese, camping, and family (fur-family included!). Blogger, motivated to get out of debt YESTERDAY! Follow along with my journey!

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64 Comments

  • Reply Walnut |

    So the thousand a month seems shocking…but…is there any way you can make it work? It’s a ton of money, but it’s also a ton of debt. Gotta pay it back somehow.

  • Reply Lisaq |

    Yeah, but it’s student loans. Wouldn’t it be better to put the $1,000 to something else?

  • Reply Jayp |

    Sorry to hear this. You have been making so much progress! Keep your head up, it will work out.

  • Reply Stillatwork |

    The standard extended repayment isn’t horrible. It just puts your loans on a 25-year repayment. When I had 134k of law school debt, I put them on an extended repayment plan, even though I planned to pay them in far less than 10 years. It allowed me to focus on buffing up my retirement accounts (the annual tax benefit of contributing to which you don’t get back in subsequent years) and savings in months when we had to and we put thousands extra towards the loans in months when we didn’t. It also let us focus on making sure our monthly bills were paid first. Four years later, we paid off the loans and had 250k in our retirement accounts/savings.

    • Reply Ashley |

      YAY! It’s so good to hear success stories like this! Thanks for the encouragement!

  • Reply Sarah |

    You’ve really surprised me these past few months. I have always been impressed by how on top of things you seem to be, even in the face of overwhelming debt. Recently, though, it looks like you have been burying your head in the sand. We’ve seen you dig in and tackle the hard stuff. I wonder why you are not able to do that now? You knew the payment change was coming but you ignored it, even though you have auto draft? I think you need to stop focusing on the change in your take-home pay – and while I’m at it, your take-home is closer to $5,000 a month than $4,500. You are insisting you get 2 paychecks a month, which would be 24, when in actuality you receive 26. So my fear is that you are counting those other two paychecks as free money and not including them in your budget. You need to start accounting for every penny you earn and budgeting for it appropriately. At any rate, I am hoping to see the old Ashley back soon and tackling the debt with a concrete plan. I’ve seen you do it before and I know you can do it again. Debt can be beaten down without a $10,000 a month income, it just takes longer. I should know – that’s my life!

  • Reply Angie |

    Looks like they calculated you out on a 5 or 6 year repayment schedule. I would find any way possible to make it work but I realize the IRS debt is mucking up this idea. It’s great you are sending in the $300 now monthly so your balances don’t increase! But $300 barely covers your interest, so I think you have to shoot a little higher for a monthly payment long term.

    I sense a budget post coming up soon….

    • Reply Angie |

      Based on your April debt numbers…. Your interest was $315 a month. A $300 payment wouldn’t even cover the interest so you must find a way to do better. If you cut 1% off your rate by refinancing that would at least cut $50 a month off your interest and have it not accrue anything.

      Also, how many years have you been on IBR? I just read that subsidized loans only clear your interest the first 3 years on IBR (please verify before taking as truth). If you have completed 3 years your balance will actually be growing with $300 payments.

  • Reply Margann34 |

    Ashley, I am so sorry that you have had another money crisis. You have had a lot of change in the past year and things are still settling out. I think you are at rock bottom now. The only place to go is up! You can do this!

  • Reply Chantal |

    Right. You still earn plenty. Pay your mortgage and also the $1,000 monthly and bite on the bullet.

    For comparison my daughter, in rural Texas, has an assured income of $2,440 a month, plus some more from her disabled craftsman husband– never higher than $700 a month in the past 2 years. They owe only ca $2,000 medical bills from the latter’s heart surgery.

    Her 21 year old son has full time work with an ornamental iron-making company and is paid to get electrician and plumbing certifications. Her 16 year old daughter has just been elected to the National Honors Society and intends to shoot for the highest ( Princeton, Yale, etc.) on full scholarship. They own a small house and intend to buy another next year, with land, sharing the cost with her son.

    You have to live differently, you cannot coast along looking for ways not to repay your debts. You could end up in awful trouble–I’m sorry but the writing is clearly on the wall.

    • Reply Margann34 |

      Ashley, your take home pay and mortgage are similar to mine. You CAN pay your mortgage, tax bill and if you had to, you could squeeze out 1000 for student loans. Everything else will have to be tightened down. No eating out, super careful on groceries, minimal tv and phone packages. It will be tough but you can do It!

  • Reply Angie #2 |

    Woof. This sucks. But I agree with some of the other posters… you’ve gone soft, Ashley! (OK, totally just kidding.) This journey is a slog, and you’ve hit some pretty big hurdles. Keep it up!

    • Reply Ashley |

      Good to know. I wasn’t sure one way or another but since it’s basically admitting that you can’t pay your bill, I thought it might have a negative effect. Glad to hear it doesn’t. Thanks for setting the record straight!

  • Reply Alice |

    Just an FYI, these ‘extended’ and ‘graduated’ repayment plans do NOT quality for Public Service Loan Forgiveness. I don’t think you were planning on PSLF (though maybe now is the time to run the numbers on that) but for anyone planning on Public Service Loan Forgiveness your 120 payments must either be made in an income based repayment plan or the standard 10-year repayment plan.

    • Reply Ashley |

      Good info. You’re right that I’m not doing PSLF, but I appreciate the comment for others reading who might be on that plan!

  • Reply Scooze |

    I haven’t checked in for some time, and am confused – I remember when you first started blogging you seemed to have everything under control with debts being kicked to the side left and right. What happened? In the interim, I gather, you bought a house, used your emergency fund to pay for it and now are getting into debt trouble with the IRS and Sallie Mae.

    Maybe you never really had things under control. Maybe you just managed to get a salary that was high enough to be comfortable so you didn’t have to think about the long term. It is clear that you act on impulse – when things looked good, you bought a house that you couldn’t afford and when things are bad you can’t even bear to read your mail and plan for a payment that you have been told is coming out of your checking account.

    You put your loans in forbearance while you wait for Sallie Mae to calculate a new payment. But you realize that the debt grows every month you pay less than the interest, right? You are simply living beyond your means.

    You and your husband need to start from scratch with a calculator and a list of every debt you have and every payment you make and to figure out how to: 1) make student loan payments that don’t allow the debt to grow (even if you are approved for a lower payment), 2) pay off the IRS ASAP, and 3) create a new emergency fund.

    Right now you are sacrificing your tomorrows to pay for your today. You need to sacrifice today to ensure a brighter tomorrow. You can do it – you are clearly smart and capable – but you have to get real. Good luck!

  • Reply Laura |

    You and your husband need to sit down and have a serious budget talk. Something has to give, you can’t keep on robbing Peter to pay Paul. How much is the interest on your loans? If the IBR wasn’t even covering interest you were sinking further in the hole each month. I’ve said this before but your husband needs a part time job and you need to cut expenses to the bone for the foreseeable future. For now you need to be paying at least enough on the loans to cover interest and work on getting the IRS paid off ASAP so that money can be freed up elsewhere.
    I saw someone above point out how your take home Income is higher then you think since you get 26 paychecks a year and you shouldn’t count the extra as free money. I actually think you should count those as free money as in free to throw at debt. Make a monthly budget based on 2 paychecks and for the 3 paycheck months throw the extra paycheck at debt. The entire thing, no excuses.
    You can do this!

  • Reply Kiki |

    Oh, goodness, that is a real kick in the pants, but $300/month is just not enough to be putting to your student loans. From what I can see, your big three monthly expenses are your mortgage, student loans, and the IRS payments. Did you ever share on this blog how much the IRS payments are? I tried to find this. Maybe I just overlooked it.

    Set up your budget to include these 3 large monthly payments and see what is left over. Cut everything to the bone. Yes, if you can get back on IBR for the student loans, this may give you some breathing room, but a payment of just $300 is not even covering the interest. Student loan payments must be more than that, but continue to pay off the IRS. After that is paid, direct all that money to the student loans.

    I knew when you took that cruise that tough times were coming! People always justify these things as you only live once etc . But you lived once when you took out all those student loans. That ship has sailed!

    As a little aside, when Hubby and I were in our early married life, we had an income of $350 month to live on. $135 of that went on rent, $100/month on food etc. We drove a $500 car that we were able to buy with humble savings. We had two little kids. Yes, this was back in the early 70’s, but you can see that even though things were less expensive, it was tight! But we had no debt at all! Every single dollar had a job, and that is what you need to do. You have to get a handle on things. I think the income is there, but you have gotten lax. Time to bite down as others have said. Cut expenses even more and an increase in family income is needed too. Bring back the old Ashley!

  • Reply Kiki |

    Oh, I see that the IRS payments are $1,000 month. Ouch. So, your mortgage, IRS debt, and maybe $500/month on the student loans adds up to about half of your monthly income. I think you can do this! Check all the leaks in the budget with a fine tooth comb.

    • Reply Ashley |

      I hope so! But just for the record, those aren’t our only 3 large expenses (mortgage, student loans, IRS). We still have childcare as a large expense, too. Not quite as much as when they were in preschool, but full-day kinder is not free in our area. We still pay $600/month just for kinder (+ aftercare on the days when it’s needed). Not to mention the rest of our debts. “Debt” as a collective category is our #1 largest monthly expense.

  • Reply Janie B. |

    While I have to admit that I was questioning myself as to how you were going to get along well with your buying a house *BEFORE* you had your student debt resolved, with your husband’s quitting working, his attending college, and your giving up your part-time work, I think that many of the other posters are being far, far too hard on you!

    They are not taking into account all the time, energy, problem-solving, and STRESS that dealing with your father’s situation is *costing* you!!

    I’ve been there; I’ve done that! I’ve dealt with on-going, unrelenting-until-the-person’s-death, not to mention the aftermath, situations. They can suck the very life out of *YOU!!* Also, it makes one want to live one’s life to the fullest–NOW!!–not later, when everything, finally, is all paid in full.

    To expect you to *always* make the very *BEST* decisions at all times, no matter what, is unfair–in my opinion.

    I’d like to see some of these other “experts” do as well . . .

    • Reply Vesta |

      I agree Janie B!

      My father had Alzheimer’s Disease and while I was not his primary caregiver you grieve twice in those situations; for losing the person you know and love, but then only the shell remains. Dave Ramsey says to cover your 4 walls first, food, shelter (including utilities) basic clothing and transportation then your debt – making the IRS first because they have so much power!

      Just sending you {{{{{hugs}}}}} and encouragement

    • Reply Katie |

      Wow, I agree, you’re getting some harsh blowback here. My recollection is that your mortgage is less than you were paying in rent. You will get the interest deduction too. So, I’m not going to criticize that decision. You’ve also been going through a HUGE family trauma, which is stressful and limits your bandwidth to do other things. Plus, you have young kids, and dang they are expensive. Take a few breaths, take a walk, and get a few nights of really good sleep. Then, after a break, take a fresh look at where there may be room to tighten the budget and/or increase your income. It sounded like your husband was close to finishing his certification for personal training, so I’m sure he plans on picking up some work that way. There has never been a time where I doubted that either of you was extremely hard-working and resourceful. You’ve also been on a long journey and have shown a lot of willpower and self-control. Kudos to you both for sticking with it. I’m sorry you’re getting hit with such a huge payment now. It really stinks. Obtaining a higher education, even your Ph.D., shouldn’t keep you enslaved to Navient for decades. I hope at some point we will collectively accept that higher education serves the public good, and deserves the level of public support that used to exist.

        • Reply Ashley |

          Thanks, all! The “dad” stuff really is a huge stressor. It’s totally changed my life, my relationship with my siblings, and all kinds of things. It’s hard to understand for someone who hasn’t had first-hand experience. Even my close friends who try to be supportive – they just don’t “get” it. It’s hard to understand how all-encompassing dealing with dementia can be.

  • Reply anon |

    I think it’s time for a re-set. Re-list all the debts (including the mysterious IRS debt), credit card, etc. And list your income and saving assets. And your monthly expenses. I think you need to see it all in one place, and we could give better advice with a full picture of what’s going on.

  • Reply dh |

    You need to revisit everything. BUT, you have also done a FANTASTIC job these past years and you are revisiting HALF of what you owed (plus the IRS and the CC bills from going crazy this summer.

    You’ve got this.

    I agree that your DH needs to get a job at this point, even a PT job. We have a close friend who just got his private trainer exam in preparation for retirement. Your DH can try to get private clients and / or use his experience to work at a DIY store. He should probably do both until he can build up his client base.

    I’ll tell you one thing … any deprivation you are feeling, or you feel about your kids, is NOTHING compared to how you’ll feel when they are older. So as painful as it is, try to deal with it sooner rather than later.

    If you are bringing home 5K/mo, and your DH can bring in even 1K/mo, that’s 6K. If 3K are gone for the IRS/mortgage/SLs, that still gives you 3K/mo to live on, which is more than most people have.

    Other thought: I know you can’t do your former PT job because of the non-compete, but you can probably do other things, ie tutor, either on a platform or privately.

    Best of luck to you Ashley! You can, and will, do this!

  • Reply dh |

    Also, clearly, you’re not from the cooks, you don’t enjoy it. Same for your DH. But, you both need to suck it up, because it’s a very easy way to save money.

    I would challenge you to each cook two meals a week, in bulk (ie for 6 or 8). Freeze the leftovers.

    It’s not fun or sexy but after a few weeks you WILL have a bunch of cheap and healthy meals in the freezer. And, obviously, you should cook what your family likes to eat.

    • Reply Angie |

      I recommend the site goodcheapeats.com It’s perfect for Ashley’s situation!

      She’s published several make and freeze ahead cookbooks, though most of the recipes are on the site. Most meals have minimal ingredients and can be sized up accordingly (she cooks for 8 or 10?!). Every month she details her grocery buys item by item and meal plans. Way back before she started publishing cookbooks and getting more blog income her grocery budget was something like $600 for all those people. Definitely do some searching in the archives. Also,lots of freezer lunch ideas for the kids.

  • Reply dh |

    PS I have 4 adult kids, aged 19-31. I know what I’m talking about in terms of “deprivation” (their words, not mine lol) and cooking in bulk.

  • Reply dh |

    Last thought … I don’t remember whether or not you have an independent structure in your home. If you do, you might consider renting it out.

    I wouldn’t want to rent out a spare bedroom but if I had an independent space at this point I would do it.

    • Reply Ashley |

      We don’t have an independent structure. We have one guest room, but wouldn’t want to rent it out because (1) it shares a wall with our master bedroom, (2) it’s tiny – was intended as a baby’s room, and (3) given that we live out-of-state from all our family, the guest room is actually used with relative frequency. We usually have one or both of the grandma’s out at least 1-2 times per year, each.

  • Reply Sarah |

    I just went back and saw that you have set up a plan with the IRS for a $283/month payment. That plus your mortgage and $1,000 toward student loans is doable. It won’t be fun, but you won’t starve on that budget. Unless there are hidden expenses we don’t know about, I am with those who think you need to press ahead with paying off these student loans before the balance grows instead of shrinks. Maybe if you posted a comprehensive budget, we could see exactly where you stand and offer truly helpful advice.

  • Reply scarr |

    I’m sorry that this came as a surprise to you. I remember when I received my first student loan payment notice I freaked out, especially since I didn’t have a job at the time and it seemed impossible. You and your husband have had a very busy and stressful last year – buying a house, your husband going back to school, changing job dynamics, etc… On top of all of that, you have had family medical issues – from your father’s on-going medical care to your mom and her husband’s issues (I remember a fall a while back?). It can’t be easy to stay on top of everything, I feel for you and your family and want you to know I am sending good thoughts your way.

    With that said, I do share some of the concerns of other posters. I think the outcome you have found yourself in is a result of buying a house at the wrong time (thus spending your emergency fund), going back to school without better planning (I was guilty of this in my early-twenties and it almost ruined me financially), and making excuses for these – and other expensive – things. It is not my intention to make you feel bad, rather I want you to become inspired. I hope this past year, financially speaking, can be a teachable moment: stop making excuses and plan better. That means meal planning. An earlier comment mentioned splitting the food prep with your husband, great idea! I hope your husband can get some part-time work soon so things aren’t so tight. But ultimately, I don’t think you need to make tons of more money (although we all wish we had more money) I think you need to spend less and plan better. It seems the IRS debt should be the priority. I hope you and your husband can take some time and really give the budget a makeover and that you share it with us.

    Please know, I am always on your side. Personal finance is personal, we have to do what works for us and our families. Good luck!

  • Reply Shanna |

    Your husband has to get a job. Maybe even work full time and put school on hold until you have paid the IRS back. He also needs to contribute every penny he takes in towards the family budget, no side money for him. Spending the money to get his training certificate was a luxury, the gym is a luxury, it is time for you both to take on this debt as you are in it together. Although a lot of the debt is tied to you it is also what is enabling you to pay for your lifestyle and pay for his errors/medical as well. Don’t let this totally stop your forward motion. Think long term. On a side note, once IRS is paid for, if you plan on paying for college for your kids you should be allowing for a minimum of $100-150K per child to be saved by the time they are 18. And that is for state schools. It will be here before you know it!

    • Reply Ashley |

      Ouch, hopefully not! I’m employed in academia and have great benefits – one of which is reduced tuition for immediate family members (including children). 🙂

  • Reply debtor |

    While I am surprised to read this (I read your confession post as a “fell off the wagon briefly, not all this), I don’t think there’s much use getting into that because you already know!

    First things first, forbearance won’t affect your credit. However, interest will keep accruing and I imagine you do want to pay the loans off. I would see if I could extend the forbearance for the full year because you can make payments while your loans are in forbearance but then you would have some wiggle room with your cash flow. I won’t flat out say IBR is a bad idea, but if your loan interests are similar to mine, then $300 is just a joke – your principal will stay the same if you are not paying more than the interest and that’s just a waste of money. So i’d say – see if you can extend your forbearance for the full year, Take 2-3 months to get your budget in order, then start making bigger payments on your loans to get rid of as much of the interest as you can.

    Definitely think you need to try and stop comparing your old income. This is your income now – so start with a fresh budget and see what the “new normal” is. Funny thing about life is when your grocery budget is $800 you spend it all and when it is $100 you somehow make it work. You need to re-set the limits in your mind and try not to think about it as a reduction in limit.

    Finally, maybe now is the time to get into the basic old school PF blog tricks – take a weekend and look around your house and see what you can sell. I find local FB groups a qucik and easy way to gdt rid of stuff. I’m sure the girls have TONS of stuff you can post for cheap. Also, don’t make decisions for others, i’ve found that truly “one man’s trash is another man’s treasure” when it comes to selling. Like seriously, someone paid me $5 for scrabble tiles that I was going to throw away because I didn’t have the board.

  • Reply Chantal |

    To Shanna: Ashley has the huge advantage of sending her children to college free, if she continues to work in the academic field.. Writers here may be unaware of this.

  • Reply Isabella |

    It does look like a time for a reset! I know it must be discouraging after going gang busters on debt in the past. Yes, I agree with others that Ashley has had some tough times with extended family issues, heartbreak, and hardships in the past few years. Unfortunately, though, debt, school loans and the IRS wait for nobody. They don’t care what your personal situation is!

    I was looking over your 2017 budget (from January?), and it struck me that lifestyle creep has been part of your problem. When you had a larger income, there was a budget line for $300/month for restaurants, $600/month for food, $500/month to fund vacations for a while etc. The more you earned, the more line items were added. That was the time to eliminate restaurants and throw that at school loans! Now, you are in a pickle and must go back to square one.

    Take a look at the blog “Ditching Our Debt.” This is a family of 6 that had $90,000 in law school loans and make about $55,000/ year. (I don’t have that exact salary in front of me.) Their blog is a good example of tight budgeting to eliminate that debt. One thing they do is bank one or two of those extra paychecks each year to pay for recurring yearly expenses (car registration, school fees etc.)

    I know that you are probably sick of this debt repayment, but you have to keep fighting that good fight for a some more years to come. Those student loans won’t go away, and I know you will want to raise your girls in a household void of debt and money problems.

    • Reply Ashley |

      Thank you for the encouragement! I liked the sentiment about “fighting the good fight”! It definitely feels like a fight at times, but I know it’s a worthwhile prize on the other side!

  • Reply Angie |

    The good thing is the job/school situation and the IRS tax debt are temporary. There is nothing wrong with just focusing on your family and only staying afloat during this time of change. But you need a budget to stay afloat. The issue is if you are complaining about being there. Make a choice to pay down debt or don’t at this stressful moment in time. But since all the poor planning or choices were yours that put you in this spot you need to own it.

    I’ve certainly had to put debt repayment on hold for a few years while I was unemployed. It was what I had to do. It sucked. But it is what it is. Eventually I got back on the debt repayment train and succeeded. You can do it too!

  • Reply Shanna |

    Chantal, That would be a great perk for sure! I did not know public schools did that. Does that included dorms/living expenses, etc? Or just tuition (a fab perk no matter what)? Tuition at an in-state rate can be less than housing expenses, so if her girls get to attend school tuition free (fabulous!) I would amend that to having living expenses of $15-20K per college year per girl saved (living expenses plus books, travel, etc). Two of my daughters attend schools in state (California-SLO and San Diego) and their rent alone is $750 and $850 per month (does not included utilities, parking, groceries, etc). Will be glad at least one will be out before the next two start in 2 years!

  • Reply Chantal |

    Shanna: It is free tuition where a parent works, in most large state universities and many private.. My husband and I worked full time at the University of Texas for all our graduate degrees and availed ourselves of this. It never occurred to us not to work our way, even with 2 teenage children towards the end of it. We rented houses until we could buy a house when we were in our 50s. We were also paying off large debts piled up by my first deceased husband, which I had known nothing about.

    Our nephew got a full scholarship to Harvard. His parents only had to come up with his travel (from Colorado to Mass.) He spent his small vacations with us, here in Delaware, as he could ride the cheap bus services to reach us. During longer vacations he got paid internships.

    So many young people , like you Ashley and your husband, expect to get a ride for what you want and then find that you are in deep trouble. Realism just has gone down the drain. Ashley your food and eating out amounts are preposterous. I feel very sorry for you but you are looking for ways to avoid what you have piled up for themselves and it isn’t going to happen. This site scares me, reading of all the coming train wrecks for its members.

    WE are now retired from two of the lowest paying professions you could find: University Librarianship and Museum Curatorship, but loved every minute of them. We have state pension annuities based on $425,000, and privately invested funds of $110,000 also, on top of Social Security. We are extremely comfortable financially and we did it by ourselves which we take great pride in. We also keep ca. $20,000 to $25,000 in an emergency fund.

    Ashley: It will be so easy for you to achieve the same in the same amount of time–by your mid 50s, but you must open your eyes to your situation and your husband must work–I am baffled by his rocking along at your expense. This is ridiculous..

    • Reply Angie |

      I’d say you’re overstepping. Her husband has been the breadwinner the entire time she was in school and looking for work. Now he is working on a path to switch careers so he can work to retirement age in a job that is not taking a huge toll on his body. He’ll be able to snag an engineering job around the same salary as Ashley when he finishes in a few years. This is a temporary situation and an effort to improve their financial situation long term. Although Ashley isn’t the best at doing the math and planning ahead I would say she is a far ways away from being a trainwreck!

      That’s great that you have a pension annuities and social security. Those are all things us “young people” don’t have access to. On top of that we mostly have to pay our way through school on loans at high interest rates and overpriced tuition. This then delays other typical ways that your generation built wealth, such as buying a house. Please stop generalizing about us “young people” like we can’t do anything! You started out, grew your family, and worked your career in a completely different generation with challenges unique to your generation. Hardly comparable to what us “young people” are thrust into now.

      • Reply Anon |

        Not entirely true! The problem today is that it IS much more expensive to go to college, but I have four recent college graduates (my kids) who graduated debt free. We are a typical middle class family with an annual income of about $72,000. (Yes, I realize we are fortunate.) However, this does not translate into much financial aid. It would take too long to go into it all, but there ARE ways to get through college today with very little debt or debt-free. It takes a lot of investigating, planning, and sacrifice though.

        • Reply Angie |

          Yes, there are ways. But your parents and mentors in high school need to help explain the ways. I took on my college debt when I was 16/17. My parents should have guided me differently but they didn’t. In fact, in my middle class suburb, I remember everyone saying just go to college cost is irrelevant. It’s not impossible to get through without debt but you need a strong parental or mentor support system to do it these days. When everyone you trust is telling you not to worry about it why would you? By the time you learn the magnitude of your loans it is usually too late to do anything about it.

          • Anon. |

            Very true, Angie. That is a big problem today. We found that the high school counselors had almost nothing to offer. My husband and I led the way, investigating colleges, scholarships etc. We hounded our kids to get essays written, practiced mock interviews etc. No 17-year-old can really look beyond next year. They really need adult and parental involvement when making these huge life decisions. All that debt means nothing to a teenager, but through the eyes of an engaged adult or parent, they can begin to understand what a financial hole this can be. I’m sorry that no one went to bat for you.

    • Reply Isabella |

      I have to agree to this somewhat. When I was a kid growing up in NOBODY ate out! Not just us, but all my friends and relatives too. Okay, maybe once or twice a year we went to a pizza parlor or out for Sunday breakfast, but it was rare. People cooked at home. There also were not as many restaurants. Now today, people have eating out as a huge monthly discretionary budget item.. It’s all about “life balance” and “life experience.” My Mom had 6 kids and worked full time like my Dad, and they figured out a way to put a meal on the table every day. We sat down as a family. It was darn hard work I’m sure. When we had our four kids, we did the same. When I was at the hospital the other day, the young front desk guy told me he had been tracking his restaurant expenses, and he spent $7,000 that year. Now that I will never understand!

      • Reply Kathleen. |

        That’s why you millenials are all broke! Live for today and nuts to the future.

  • Reply dh |

    Wait a minute … from your post about the IRS: “We’ll be paying $283/month”

    Since you won’t be paying 1K to the IRS anymore, you COULD pay 1K/mo to the SLs …

    So your mortgage ($950), SLs ($1000) and IRS debt ($283) come to about $2300/month. That IS doable on nearly 5K per month.

    • Reply Ashley |

      I agree, given the numbers you’ve stated. But don’t forget about all of our other debts, too. More info to come in a forthcoming (and well overdue) budget post.

  • Reply Emily N. |

    Oh, that sounds so frustrating, Ashley! I’m sorry that so much seems to be hitting you all at once. One exercise you might find helpful is to calculate what your monthly take-home income last year really was–that is, what it would have been if you’d had an appropriate amount of income tax withheld. I think you’ll find that what’s felt like a large drop in income to be less significant than it had seemed.

    I know that over $1k as a monthly student loan payment seems huge right now, but I think that once you’ve gotten the IRS debt out of the way it’ll be doable. Just as a point of comparison, husband and I have a joint take-home income of less than $4k during good months (he’s a music teacher, so his income lags during the summer and over the holidays), and we somehow manage to pay $950 in student loans and $800 in rent each month. Our situation is a bit different from yours (no kids), but I hope to give you at least a bit of encouragement that your situation isn’t unmanageable. Good luck!

    • Reply Emily N. |

      P.S. I’m sorry some of the other readers are being so hard on you. You deserve a lot of credit for being so open with us about the ups AND downs.

      • Reply Ashley |

        Thank you! I’m only human. I know that sometimes doesn’t come across in blog-land (and sometimes I’ve had readers question whether I was even “real”). I can assure everyone that I AM real and so is my journey. Nothing contrived here. We are living real lives, making real progress and sometimes, yes, real mistakes. It’s all part of our journey. We aren’t perfect, but we aren’t quitters either. We’ll keep plowing forward in the messy slog of debt all around us. 🙂

  • Reply Malady |

    I’m here too, wondering why the criticism.

    I do think that there are some grains of gold in these comments. Starting over with a brand spanking new budget seems like a good idea. Pushing the student loans out to 25 years so you have a guaranteed lower payment and can nail them quicker when you’re able also seems like a solid idea to me.

    You’re doing great Ashlee, and I’m looking forward to seeing your next budget post.

  • Reply MsMidLife |

    Ashley, your progress up until this year has been amazing! We all have times like this, so don’t despair. Did you make some choices that could have gone better? Sure, but everyone has. Did you drop the ball just a little bit? Sure, but so has everyone else, believe me. 🙂 Maybe not with their money, but with something in their lives, at some point, because surprise, surprise, no one is perfect!
    You will figure out what you need to do I am sure! Best of luck.

  • Reply Money Maker Mindset |

    Hi Ashley,
    I have been a long time reader of your blog. Thank you for sharing such deeply personal ups and downs with us. An old professor once told me that the true mark of character is how one picks themselves up after a fall. You are showing such humility and grace through this struggle. I am confident that you will be able to turn your situation around. You got this!

    Cheering you on.

So, what do you think ?