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huskygirl123

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A lot of the advice is based on people's own projections rather than her actual situation so it is perfectly appropriate that she not give it much weight. Don't eat out so much and quit buying expensive stuff you don't need is worthless advice for someone who doesn't eat out and who bought silly stuff like groceries and utilities during a time when her spouse was out of work (maybe there were dumb purchases from before on there from when they had more income but there is no indication she is impylse buying now) The car could have been obtained at a time her husband was making good money and they figured they could afford it, and advice to buy a cheaper car isn't particularly useful if she doesn't plan to get another car.
You get it! Some people haven't been in the real world long enough to get it and even though they don't have useful advice they are still 'haters' and have the right to 'hate/judge' while others enjoy the pride of having hundreds of posts on sdn I guess...

Hopefully none of them will become physicians that, when a patient comes in and says 'please help, I'm addicted to drugs' or 'I'm an overweight diabetic' they say 'too bad, you shouldn't have done drugs or gotten fat in first place.' Not helpful or empathetic, which to me are essential qualities in a physician I would trust. But that's just me - the irresponsible overspender in their eyes.

Thanks
 

huskygirl123

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This is true, obviously a subsidized federal loan would be better but if she can't get enough subsidized loans to pay for school and also pay off the credit card, then the next best choice would be to get a private loan at a lower rate than the credit card, which she can then use to pay off the credit card, and then aggressively pay down the private loan. Even a private loan would be better than paying credit card interest rates. A loan at 7% doubles every 10 years, at 10% every 7 years, at 18% every 4 years, and at 24% every 3 years.

OP, before considering a deal with the credit card company make sure that doing so won't hurt your credit and affect your ability to get a loan.
Thank you, it's an eye opener for all of us to look at those numbers!
 

22031 Alum

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You get it! Some people haven't been in the real world long enough to get it and even though they don't have useful advice they are still 'haters' and have the right to 'hate/judge' while others enjoy the pride of having hundreds of posts on sdn I guess...

Hopefully none of them will become physicians that, when a patient comes in and says 'please help, I'm addicted to drugs' or 'I'm an overweight diabetic' they say 'too bad, you shouldn't have done drugs or gotten fat in first place.' Not helpful or empathetic, which to me are essential qualities in a physician I would trust. But that's just me - the irresponsible overspender in their eyes.

Thanks

Just FYI- some of the people you're criticizing are already physicians. So it may not be youth and inexperience contributing to their comments. Asking for advice and then being dismissive of anything you don't want to hear isn't a good look.

Edit: for Christ's sake you're a grown adult asking for help with tens of thousands of dollars of high-Interest debt, and tossing out the word "haters." Proof that being a non trad doesn't mean you don't have growing up to do.
 
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Mad Jack

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You really might need to defer and try to pay down your debt. That much debt on a medical student loan package will probably bury you further, and if you miss any payments you'll be ****ed, as you won't be able to get private or PLUS loans in the future and thus will be unable to fund your education.
 
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huskygirl123

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Just FYI- some of the people you're criticizing are already physicians. So it may not be youth and inexperience contributing to their comments. Asking for advice and then being dismissive of anything you don't want to hear isn't a good look.

Edit: for Christ's sake you're a grown adult asking for help with tens of thousands of dollars of high-Interest debt, and tossing out the word "haters." Proof that being a non trad doesn't mean you don't have growing up to do.
 
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dpmd

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You really might need to defer and try to pay down your debt. That much debt on a medical student loan package will probably bury you further, and if you miss any payments you'll be ****ed, as you won't be able to get private or PLUS loans in the future and thus will be unable to fund your education.
You forgot about the wild card that is the spouse. If he will be earning eniugh for them to live on it becomes more doable.
 
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Incis0r

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You get it! Some people haven't been in the real world long enough to get it and even though they don't have useful advice they are still 'haters' and have the right to 'hate/judge' while others enjoy the pride of having hundreds of posts on sdn I guess...

As per above dear!

OP just a warning- 22031 Alum is a faculty member at a med. school, and may know people at the med school you are going to go to. I wouldn't recommend calling them a hater/lashing out on them, especially on an internet forum.

From your posting history, it wouldn't be hard for an admissions officer at your future med school to determine exactly who you are.
 
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Fastrada

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You get it! Some people haven't been in the real world long enough to get it and even though they don't have useful advice they are still 'haters' and have the right to 'hate/judge' while others enjoy the pride of having hundreds of posts on sdn I guess...

Hopefully none of them will become physicians that, when a patient comes in and says 'please help, I'm addicted to drugs' or 'I'm an overweight diabetic' they say 'too bad, you shouldn't have done drugs or gotten fat in first place.' Not helpful or empathetic, which to me are essential qualities in a physician I would trust. But that's just me - the irresponsible overspender in their eyes.

Thanks
It wasn't necessary for posters to point out the fact that you shouldn't have bought such an expensive car, but you are misinterpreting them. They aren't hating on you- they are pointing out the kinds of things you need to think about in order to get out of debt and not go back into it. The situation is more like telling an obese diabetic that "soda does in fact have sugar and calories." It's obvious, but sometimes people don't realize it until it is pointed out.

The fact of the matter is that you did overspend- plenty of people work solely to save up application money rather than spend credit card "money" that they don't have. Recognizing that you have made some poor financial decisions is how you learn to do better in the future.
 
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huskygirl123

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OP just a warning- 22031 Alum is a faculty member at a med. school, and may know people at the med school you are going to go to. I wouldn't recommend calling them a hater/lashing out on them, especially on an internet forum.

From your posting history, it is quite clear which medical school you are interested in going to (congrats on getting into your top choice), what your exact stats are, and the exact date you interviewed at your top choice school. It wouldn't be hard for an admissions officer at your future med school to determine exactly who you are. All they need to do is look at who all interviewed at their school on the date you did and determine who had the stats that you have posted online on your account.

Didn't mean to lash out at anyone - faculty or not - but did some people here offered any advice? Just saying "stop spending money and shouldn't have bought such a car" doesn't consist of advice and sounds like just a waste of post to me. My mentor used to say: everything a person does comes from either a place of love or a place of hate.

I try to do things from a place of love, sounds like you too :)
 

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OP just a warning- 22031 Alum is a faculty member at a med. school, and may know people at the med school you are going to go to. I wouldn't recommend calling them a hater/lashing out on them, especially on an internet forum.

Oh no worries, this is not NEARLY serious enough for me to put forth effort to mess with anyone's prospects. Confessing to a crime, perhaps. Using the word "hater" sincerely?? Nope. But I do tend to believe that forum behavior mirrors real-life behavior more than people like to admit. So I have this pesky habit of pointing out attitude problems that are likely to cause issues down the road. And not responding well to feedback can cause major, major issues.
 
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22031 Alum

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Didn't mean to lash out at anyone - faculty or not - but did some people here offered any advice? Just saying "stop spending money and shouldn't have bought such a car" doesn't consist of advice and sounds like just a waste of post to me. My mentor used to say: everything a person does comes from either a place of love or a place of hate.

I try to do things from a place of love, sounds like you too :)

People referred you to several resources. The fact that you didn't pick up on any of it as advice is concerning.
 
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huskygirl123

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It wasn't necessary for posters to point out the fact that you shouldn't have bought such an expensive car, but you are misinterpreting them. They aren't hating on you- they are pointing out the kinds of things you need to think about in order to get out of debt and not go back into it. The situation is more like telling an obese diabetic that "soda does in fact have sugar and calories." It's obvious, but sometimes people don't realize it until it is pointed out.

The fact of the matter is that you did overspend- plenty of people work solely to save up application money rather than spend credit card "money" that they don't have. Recognizing that you have made some poor financial decisions is how you learn to do better in the future.

You are totally right! It's hard not to be defensive when people attack you unjustly - and by haters I don't mean they hate me - maybe a wrong choice of words - but have an un-compassionate attitude towards other beings.
 
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Incis0r

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Didn't mean to lash out at anyone - faculty or not - but did some people here offered any advice? Just saying "stop spending money and shouldn't have bought such a car" doesn't consist of advice and sounds like just a waste of post to me. My mentor used to say: everything a person does comes from either a place of love or a place of hate.

I try to do things from a place of love, sounds like you too :)

Seriously, try Mr. Money Mustache. It will help you in two ways: 1) Getting control over your budget/developing a long-term financial plan and 2) Developing financial power for the future so that this problem never happens again.

Oh no worries, this is not NEARLY serious enough for me to put forth effort to mess with anyone's prospects. Confessing to a crime, perhaps. Using the word "hater" sincerely?? Nope. But I do tend to believe that forum behavior mirrors real-life behavior more than people like to admit. So I have this pesky habit of pointing out attitude problems that are likely to cause issues down the road. And not responding well to feedback can cause major, major issues.

Of course- and that's very reasonable on your part. But not every faculty member may be as lenient as you on this issue, so I just wanted to remind the OP that she has posted personal identifying information, information that is unique to her, on a public forum. Information that anyone can easily access, and take advantage of.
 

huskygirl123

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Oh no worries, this is not NEARLY serious enough for me to put forth effort to mess with anyone's prospects. Confessing to a crime, perhaps. Using the word "hater" sincerely?? Nope. But I do tend to believe that forum behavior mirrors real-life behavior more than people like to admit. So I have this pesky habit of pointing out attitude problems that are likely to cause issues down the road. And not responding well to feedback can cause major, major issues.
Couldn't agree more!
 
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OP just a warning- 22031 Alum is a faculty member at a med. school, and may know people at the med school you are going to go to. I wouldn't recommend calling them a hater/lashing out on them, especially on an internet forum.

From your posting history, it wouldn't be hard for an admissions officer at your future med school to determine exactly who you are.
As a faculty member on SDN, let me assure you that nobody cares if this girl follows the financial advice she got or not. And only a sociopath overcompensating for a shortcoming would try to derail her career for an Internet slight. Times were tough a few years ago, lots of people made bad choices that may have been avoidable and now are paying the price. Hopefully lessons were learned. Here's my advice. Don't get pregnant for a while, live in a studio apartment, have your husband get a job, and crush your debt ASAP. You may not even need another car while in school, at least for the first 2 years. You may actually be underwater on the auto depending on what it is, which would suck, but it's better to deal with now than later. If you have an opportunity to work more, that should take priority over volunteering, etc. You have a serious financial problem. Tackling some debt now, living frugally, and having a stably employed spouse will get it under control. BTW, you may be able to have the school help your spouse get a job within the university, assuming he has some skill set that they can use.
 
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huskygirl123

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As a faculty member on SDN, let me assure you that nobody cares if this girl follows the financial advice she got or not. And only a sociopath overcompensating for a shortcoming would try to derail her career for an Internet slight. Times were tough a few years ago, lots of people made bad choices that may have been avoidable and now are paying the price. Hopefully lessons were learned. Here's my advice. Don't get pregnant for a while, live in a studio apartment, have your husband get a job, and crush your debt ASAP. You may not even need another car while in school, at least for the first 2 years. You may actually be underwater on the auto depending on what it is, which would suck, but it's better to deal with now than later. If you have an opportunity to work more, that should take priority over volunteering, etc. You have a serious financial problem. Tackling some debt now, living frugally, and having a stably employed spouse will get it under control. BTW, you may be able to have the school help your spouse get a job within the university, assuming he has some skill set that they can use.

Thank you!
 

bc65

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Thank you, it's an eye opener for all of us to look at those numbers!

It's the Law of 72. 72 divided by the interest rate tells you how long it takes for the principle to double. Or, 72 divided by the number of years it took for the principle, or the loan, to double tells you what the interest rate was. That number is your friend if it's calculating your investment. It's your enemy if it's your loan. That's why every percent you pay on a loan, or get from an investment, is so important.
 
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Incis0r

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It's the Law of 72. 72 divided by the interest rate tells you how long it takes for the principle to double. Or, 72 divided by the number of years it took for the principle, or the loan, to double tells you what the interest rate was. That number is your friend if it's calculating your investment. It's your enemy if it's your loan. That's why every percent you pay on a loan, or get from an investment, is so important.

That's one of my best friends.
My other best friend is Compound Interest. Together, the three of us like to spend as much time together as possible.
 
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SOMBound13

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I've been working full time for the past 12 years - also while in school - my husband was unemployed for a while and we needed to pay for a lot of living expenses on CC,


Looks like husband needs to work two jobs....one job to help support the family, and another job to help pay off the debt that was racked up while he was unemployed. This all shouldn't fall onto you.

Since you do have a working spouse, the plan should be that his income provide for living expenses. Then, your COA for housing can be put towards any of the debt that your H's second job doesn't pay off.

Does your H have a car? Does it have a payment?
 

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Like most problems, I think we need more of a history before we get to the assessment and plan

Questions:

1) Do you currently have monthly a budget? Do you use software to budget? What percentage of your monthly expenses usually come as a surprise to you?
2) What is your current monthly income (both personal and household)?
3) What is your currently monthly rent/mortgage? Also when will you next have the option to move without breaking a lease?
4) Do you/husband have cellphones? If so what are you paying for them monthly?
5) What is you current in home entertainment budget? How much to you spend on Internet/Cable/Netflix/Amazon prime/whatever?
6) What is your weekly food budget?
7) What is the bluebook value of that car that you own?
8) Do you have any savings at all? Any assests at all besides the car you already mentioned? If so what is the value of those assets?
9) When do you graduate from school and what are you paying for school?
10) Are you taking out any loans for school beyond tuition?
11) What is the APR on your credit card? On you car?
12) Do you have any financial support at all from your relatives?
13) What is your/husbands daily commute to work and school?

Seriously, try Mr. Money Mustache. It will help you in two ways: 1) Getting control over your budget/developing a long-term financial plan and 2) Developing financial power for the future so that this problem never happens again.

I personally like that website but its really directed and helping people who save 60% of their income get to a 90% savings rate so that they can retire.
 
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Buck Winters

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A lot of the advice is based on people's own projections rather than her actual situation so it is perfectly appropriate that she not give it much weight.
Agreed, hence the reference to a qualified source of information.
 
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Affiche

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You get it! Some people haven't been in the real world long enough to get it and even though they don't have useful advice they are still 'haters' and have the right to 'hate/judge' while others enjoy the pride of having hundreds of posts on sdn I guess...

Hopefully none of them will become physicians that, when a patient comes in and says 'please help, I'm addicted to drugs' or 'I'm an overweight diabetic' they say 'too bad, you shouldn't have done drugs or gotten fat in first place.' Not helpful or empathetic, which to me are essential qualities in a physician I would trust. But that's just me - the irresponsible overspender in their eyes.

Thanks
I'm also a non-traditional student who has been in the real world for a few years now. I've been homeless, so pardon me but I think I "get it" just fine.

One of the issues here is that you're attempting to justify spending an exorbitant amount of money on things that you could have been frugal with. For example, your car. If you don't see that this spending was unnecessary, then you're unlikely to ever get out of debt. No one is "hating", they're just trying to bring you clarity (with the exception of comments about not eating out as much lol that was silly).

Another issue is that you don't seem to grasp the terms of borrowing money. For example, a car loan does not just disappear when you drop the car back off at the dealer and tell them you don't want it anymore. Are you familiar with the term negative equity? Because it's likely your car has it and thus you'll still owe money on that car loan even after you sell it back.

And finally, take some responsibility for your debt. 48k can support an entire family for at least a year. There was no reason to go that far into debt unless you were spending irresponsibly. Stop making excuses and lashing out at other people and own the fact that you were living above your means. As I said earlier, Dave Ramsey is excellent for getting you out of debt and you should be talking with your borrowers about refinancing your loans.
 
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bc65

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I personally like that website but its really directed and helping people who save 60% of their income get to a 90% savings rate so that they can retire.

I wouldn't ordinarily recommend him at all, but I think it's healthy for people who overspend to see how frugal someone can be. I don't follow him regularly, but I think it would help someone put their spending in perspective. I would also recommend the book The Millionaire Next Door to everyone.

Like most problems, I think we need more of a history before we get to the assessment and plan

I agree. A more systematic and informed approach to OPs financial situation would be better.

However, depending on how much financial aid she can get, and how much her husband earns, the current debt is not the big issue. The total amount she currently owes is a lot less than some people owe for undergrad. Given her circumstances, the amount of debt itself is not dire. What worries me is just the possible interest rate she's paying, and the probability, but not certainty, that she has a tendency to overspend.

I think we may be putting too much emphasis on the car. Again, it was purchased when her husband was working. As far as new vs used, I come down in favor of new. Sure, you can get a good buy sometimes, but the reason that slightly used cars sell for such a discount is because of "information asymmetry". You don't know if it's a lemon. If you bargain well, the discount on a new car can account for most of the savings, and since I keep my cars at least 10 years, usually until they are no longer functional, I get more years out of a new car than a used one. I'm willing to pay a small premium for peace of mind on a car I'll keep for 10-15 years.

As for running up credit card debt, I think that good reasons to run up credit card debt include med school applications and basic expenses when unemployed, along with medical bills. Just because debt is on a credit card doesn't mean it wasn't a necessary expenditure. The strategy now should be to get a lower interest rate on that credit card debt, either by transferring it to a lower rate card or to student loans.

I think too many of us forget how quickly circumstances can change. Even attending physicians can end up destitute very easily. All you need is a severe illness or disability without adequate disability insurance early in your career when you don't have savings ( or late in your career, given the poor savings rate of many physicians ) and you too can be out on the street. Just a divorce or two can wreak havoc as well.
 

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However, depending on how much financial aid she can get, and how much her husband earns, the current debt is not the big issue. The total amount she currently owes is a lot less than some people owe for undergrad.
The difference though is that payments for undergrad loans are deferred while you're in school and they're usually at a much lower interest rate than a credit card. And yeah, I see the benefits of buying a new car, but unless you have a solid savings account that will allow you to scrape by if you're laid off or something, you shouldn't be taking out that large of a loan to finance a car. There's no need to spend that much money when you clearly don't have it.
 

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The difference though is that payments for undergrad loans are deferred while you're in school and they're usually at a much lower interest rate than a credit card.

Right, that's why my first recommendation was that she should take out enough loans to cover her credit card debt, if possible. If not, all the extreme economies that we all suggested come next. Hopefully, her husband's salary can pay down some of that debt.
 

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Right, that's why my first recommendation was that she should take out enough loans to cover her credit card debt, if possible. If not, all the extreme economies that we all suggested come next. Hopefully, her husband's salary can pay down some of that debt.
I see what you're saying. A potential issue though is that her CoA will not be adjusted to cover her existing debt. Depending on where she's matriculating, she'll likely only be able to take out ~20k for the year, which has to cover all cost of living. If her husband can cover CoL and she can just pay down debt, then it's not that bad. If he can't, then she'll have to live hella frugally and use the remainder of that 20k to pay what she can towards loans, which won't cut it with the payments she currently has.

I also just want to emphasize that when you get to the point of paying off loans with loans, you're in a bad place and need to seriously learn how to manage your finances.
 

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Didn't mean to lash out at anyone - faculty or not - but did some people here offered any advice? Just saying "stop spending money and shouldn't have bought such a car" doesn't consist of advice and sounds like just a waste of post to me. My mentor used to say: everything a person does comes from either a place of love or a place of hate.

I try to do things from a place of love, sounds like you too :)



I think you're missing the point.

It would be one thing if you had written, "In hindsight, I realize that I should have bought a reliable gently-used $15k car, which would now be paid off. At the time I bought the car, my husband and I had good paying jobs and I hadn't anticipated him losing his job for a few months and me going to med school. Therefore, I thought it was ok to buy myself a $40k car. " (just a rough estimate because you've already made $15k in payments and still owe $28k.)

However, instead you justified the expensive car purchase as some sort of necessity to get to work. You also seem to be unaware that you can't just "return" a car to a dealer and have the debt "go away". It's a 3 year old car. A dealer will likely offer you less than you owe, and you'll still need to buy another car!

That rationalization strongly suggests that you don't quite "get" the problem, and therefore the problem will likely happen again (and again) over the next 8 years while you're in med school and in residency.

I have a parent who is a financial planner (not a scammer), and she routinely sees people justify excessive expenses. Usually the excuse is, "I work hard. I deserved that purchase. I thought I could afford it," while completely ignoring the ramifications of that debt down the road (in your case, applying to med school and spouse losing job for a short time.) Until the person accepts the reality that life can't be lived on credit, and that one's ego shouldn't be stroked by expensive cars, this pattern happens again and again. My mother, who earns over 6 figures, drives a reliable very nice used crossover that she paid $11k for. My father who also earns over 6 figures, drives a reliable used SUV that he paid less than $16k. So, your excuse that you needed that car just rings hollow.

The truth is....you WANTED that car. It was a luxury purchase. You knew how high your rent was, yet you still went ahead with the purchase. That shows impulsivity....not rational thinking.

I know this is blunt and harsh, but you need to own what happened so it doesn't happen again.

Hopefully, your husband is well-employed now and can provide living expenses. Maybe he can work a second job since his job-loss contributed to the debt. You do need to stop your volunteer hours and perhaps work more. You need to pay off the CCs, figure out what you can do about the car, and build up some savings for any future emergencies.

As I mentioned earlier.....You can apply some of your COA living expenses to the CC bill (if your husband can support you), but that should NOT be the main solution. You have 6+ months to also work on that debt.
 
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bc65

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A potential issue though is that her CoA will not be adjusted to cover her existing debt.

Right. I don't know how difficult it is to get subsidized or unsubsidized loans over and above the official CoA. Also, will having a working spouse mean more or less money in loans? More loans may not be feasible. Perhaps you could enlighten me. Otherwise, they will have to be really frugal in med school, or the husband will have to pay down the debt.

I also just want to emphasize that when you get to the point of paying off loans with loans, you're in a bad place and need to seriously learn how to manage your finances.

Agreed, but there's nothing wrong with refinancing an existing loan at a lower rate, and nothing wrong with borrowing money at a high interest rate ( credit card) to finance a high-yield investment ( admission to med school ). But I absolutely agree with you that in this case there's a substantial likelihood that there is some overspending involved, and that's why we are all giving advice based on that assumption.

I have a parent who is a financial planner (not a scammer), and she routinely sees people justify excessive expenses. Usually the excuse is, "I work hard. I deserved that purchase. I thought I could afford it," while completely ignoring the ramifications of that debt down the road (in your case, applying to med school and spouse losing job for a short time.) Until the person accepts the reality that life can't be lived on credit, and that one's ego shouldn't be stroked by expensive cars, this pattern happens again and again. My mother, who earns over 6 figures, drives a reliable very nice used crossover that she paid $11k for. My father who also earns over 6 figures, drives a reliable used SUV that he paid less than $16k. So, your excuse that you needed that car just rings hollow.

The truth is....you WANTED that car. It was a luxury purchase. You knew how high your rent was, yet you still went ahead with the purchase. That shows impulsivity....not rational thinking.

Great post! The key phrase, which I use often myself, is that "you don't deserve anything". If you're careful with your money, someday you might be able to afford a lot of expensive things, but buying things you "deserve" is going to get you into big trouble.
 
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@bc65 your posts are dope but when you quote, can you please leave the username in the quote so we know you're responding to? lol
 
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Right. I don't know how difficult it is to get subsidized or unsubsidized loans over and above the official CoA. Also, will having a working spouse mean more or less money in loans? More loans may not be feasible. Perhaps you could enlighten me. Otherwise, they will have to be really frugal in med school, or the husband will have to pay down the debt.
Subsidized and unsubsidized loans are both taken out to cover the CoA, not to cover what's over it. From what I understand, it's damn near impossible to get your CoA increased because the loans are only supposed to be used for education.
 
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Right. I don't know how difficult it is to get subsidized or unsubsidized loans over and above the official CoA. Also, will having a working spouse mean more or less money in loans? More loans may not be feasible. Perhaps you could enlighten me. Otherwise, they will have to be really frugal in med school, or the husband will have to pay down the debt.



Agreed, but there's nothing wrong with refinancing an existing loan at a lower rate, and nothing wrong with borrowing money at a high interest rate ( credit card) to finance a high-yield investment ( admission to med school ). But I absolutely agree with you that in this case there's a substantial likelihood that there is some overspending involved, and that's why we are all giving advice based on that assumption.



Great post! The key phrase, which I use often myself, is that "you don't deserve anything". If you're careful with your money, someday you might be able to afford a lot of expensive things, but buying things you "deserve" is going to get you into big trouble.
Working spouse doesn't change the cost of attendance so she would still be able to take out loans up to the coa (which is why the key piece of info is whether hubby will be able to earn a livable amount when she starts school).

Completely agree about not feeling like you deserve things. I am now a successful surgical attending who was lucky enough to have a spouse earning a decent income during school so that between that and a scholarhip my total debt is much lower than the average. But we still are careful in our spending because I want to be working because i enjoy it rather that because i need to in order to fund my lifestyle. We are content with our modest home and cars that while bought new were affordable enough to pay off within 3 yrs and are now 13 and 8 yrs old (neither of us are particularly car savvy so buying used would have been too much of a gamble for us i think).
 
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issue though is that her CoA will not be adjusted to cover her existing debt.


Of course it won't. But she has a working husband. His income can cover the "room and board" part of her COA, which would free up that part of her loan to cover some of her existing debt.

A married med student with a working spouse is in a different situation. The spouse can help cover some of her costs. It would be like a med student who can live at home with parents while going to school.

I also just want to emphasize that when you get to the point of paying off loans with loans, you're in a bad place and need to seriously learn how to manage your finances.

Normally, that is true. However, student loans have interest rates that are much lower than CC rates....and the compounding may be different (not sure about that last aspect).

Right now, she's paying MINIMUM payments on her CCs....essentially ONLY paying interest and a tiny amount of balance. She isn't really making any progress. The interest rate is probably 18-26%. The interest rate on a student loan would be less than 10%.


If the car was bought new, then likely has a low interest rate...maybe even 0 interest.
 
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Working spouse doesn't change the cost of attendance so she would still be able to take out loans up to the coa (which is why the key piece of info is whether hubby will be able to earn a livable amount when she starts school).

Completely agree about not feeling like you deserve things. I am now a successful surgical attending who was lucky enough to have a spouse earning a decent income during school so that between that and a scholarhip my total debt is much lower than the average. But we still are careful in our spending because I want to be working because i enjoy it rather that because i need to in order to fund my lifestyle. We are content with our modest home and cars that while bought new were affordable enough to pay off within 3 yrs and are now 13 and 8 yrs old (neither of us are particularly car savvy so buying used would have been too much of a gamble for us i think).

Are you into FI/RE as well?
 

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We are content with our modest home and cars that while bought new were affordable enough to pay off within 3 yrs and are now 13 and 8 yrs old (neither of us are particularly car savvy so buying used would have been too much of a gamble for us i think).

I'm glad to see that I'm not the only one buying new cars! The other reason I buy new cars is because of the safety features. The last 2 times I needed a new car, the newer ones had significant safety features that older cars didn't have.

@bc65 your posts are dope but when you quote, can you please leave the username in the quote so we know you're responding to? lol

Ok, sorry. I've been just cutting and pasting. I just figured out how to do it the right way. :sorry:
 
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Of course it won't. But she has a working husband. His income can cover the "room and board" part of her COA, which would free up that part of her loan to cover some of her existing debt.

A married med student with a working spouse is in a different situation. The spouse can help cover some of her costs. It would be like a med student who can live at home with parents while going to school.



Normally, that is true. However, student loans have interest rates that are much lower than CC rates....and the compounding may be different (not sure about that last aspect).

Right now, she's paying MINIMUM payments on her CCs....essentially ONLY paying interest and a tiny amount of balance. She isn't really making any progress. The interest rate is probably 18-26%. The interest rate on a student loan would be less than 10%.


If the car was bought new, then likely has a low interest rate...maybe even 0 interest.
The compounding is absolutely different. Student loans are simple interest (the unpaid interest capitalizes a single time whenever you change from deferment to repayment but doesn't capitalize while you stay in ibr or standard repayment). Definitely a better option than the usual credit card rates.
 

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I'm glad to see that I'm not the only one buying new cars! The other reason I buy new cars is because of the safety features. The last 2 times I needed a new car, the newer ones had significant safety features that older cars didn't have.



Ok, sorry. I've been just cutting and pasting. I just figured out how to do it the right way. :sorry:


Buying new can be a fine way to go as well, as long as the car is affordable.. There can be some excellent deals on new cars as well as 0% interest loans.

There are new cars under $20k, and yes, many have safety features and awesome warranties which can save you repair bills in the future.

The points made in this thread really weren't about "buying used instead of new." The points made were in regards to buying a $35k-40k+ car....and implying that it was a necessity. And it appears that the OP didn't put any money down at all on the purchase...just financed the whole thing.
 

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Are you into FI/RE as well?
Does this mean investing and real estate? I have a taxable investment account on top of retirement accounts and one rental condo (was the place we bought in med school because rents were higher than mortgage+taxes+pmi+hoa ended up being because the owners were selling due to divorce and we got a great deal).
 

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However, student loans have interest rates that are much lower than CC rates....and the compounding may be different (not sure about that last aspect).


The compounding is absolutely different. Student loans are simple interest (the unpaid interest capitalizes a single time whenever you change from deferment to repayment but doesn't capitalize while you stay in ibr or standard repayment). Definitely a better option than the usual credit card rates.



That's what I thought, but I wasn't absolutely positive so I added the caveat.

So, if the OP were able to "pay off" her CCs with the "room and board" part of her COA loans, she would eliminate that $800 minimum payment she's now making.

She'd have to VERY disciplined not to start using those CCs again and running up their balances. Take them out of your wallet. Use a debit card only.
 

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Buying new can be a fine way to go as well, as long as the car is affordable.. There can be some excellent deals on new cars as well as 0% interest loans.

There are new cars under $20k, and yes, many have safety features and awesome warranties which can save you repair bills in the future.

The points made in this thread really weren't about "buying used instead of new." The points made were in regards to buying a $35k-40k+ car....and implying that it was a necessity. And it appears that the OP didn't put any money down at all on the purchase...just financed the whole thing.
I financed as much as humanly possible on our most recent car because 0% interest, but otherwise not a great plan.
 

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Buying new can be a fine way to go as well, as long as the car is affordable.. There can be some excellent deals on new cars as well as 0% interest loans.

There are new cars under $20k, and yes, many have safety features and awesome warranties which can save you repair bills in the future.

The points made in this thread really weren't about "buying used instead of new." The points made were in regards to buying a $35k-40k+ car....and implying that it was a necessity. And it appears that the OP didn't put any money down at all on the purchase...just financed the whole thing.

I know, but everyone was suggesting a 12k used car, and implying that a new car is always an extravagance and a waste of money. I'm responding to that idea and saying that buying new can also be a reasonable option.
 

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Does this mean investing and real estate? I have a taxable investment account on top of retirement accounts and one rental condo (was the place we bought in med school because rents were higher than mortgage+taxes+pmi+hoa ended up being because the owners were selling due to divorce and we got a great deal).

Sort of. FI/RE = Financial Independence/Retiring Early. Basically, it's a group of people who prioritize saving and investing over spending in order to not be dependent on their jobs for income/paying expenses. This does NOT necessarily mean that they stop working once they are financially independent (although many do and opt to travel the world and pick up other hobbies). Instead, it means they work because of the joy of working because they don't NEED the income to pay their bills- the assets pay for the bills. So in your case, investment accounts and your rental property are your assets. Once those cover your monthly expenditures, you are FI and ready to RE whenever you want, but you can keep working if you enjoy it.

Good for you for getting on top of the tax-advantaged accounts and taxable accounts and real estate investment btw. You're miles ahead of probably 95% of Americans in terms of Financial Independence.

My personal goal is to accumulate enough wealth by the age of 37 that I am not dependent on my job for income- my wealth/assets will pay all my monthly bills so theoretically I would not HAVE to work another day to pay the bills. I'll still work, but it'll be for the pleasure of it, and I'll pass on the lack of need for an income in the form of severely discounted prices to my patients for dental procedures.

Mr. Money Mustache is a great example of FI/RE. He "retired" in his 30s and today has a passive income in the six figures. Yet he keeps himself busy by taking on certain jobs that he likes and does them for fun.
 

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Sort of. FI/RE = Financial Independence/Retiring Early. Basically, it's a group of people who prioritize saving and investing over spending in order to not be dependent on their jobs for income/paying expenses. This does NOT mean that they stop working once they are financially independent. Instead, it means they work because of the joy of working because they don't NEED the income to pay their bills- the assets pay for the bills. So in your case, investment accounts and your rental property are your assets. Once those cover your monthly expenditures, you are FI and ready to RE whenever you want, but you can keep working if you enjoy it.

My personal goal is to accumulate enough wealth by the age of 37 that I am not dependent on my job for income- my wealth/assets will pay all my monthly bills so theoretically I would not HAVE to work another day to pay the bills. I'll still work, but it'll be for the pleasure of it, and I'll pass on the lack of need for an income in the form of severely discounted prices to my patients for dental procedures.

Mr. Money Mustache is a great example of FI/RE. He "retired" in his 30s and today has a passive income in the six figures. Yet he keeps himself busy by taking on certain jobs that he likes and does them for fun.
Gotcha, i had never heard it called that acronym before, but essentially seems in line with my goals. I toy with the idea of getting another house near my current one and renting it out (we are very convenient to the county hospital that has residents and students) but wasn't eligible for a mortgage when the house that would have been perfect was available (too short time in private practice) and now that i can i haven't found something that makes we want to take the risk. But since our condo is paid off it is a nice profit center so the idea of having more is tempting.

Probably not that nice of me to bring that stuff up in a thread about credit card debt though. Sorry OP
 
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That's what I thought, but I wasn't absolutely positive so I added the caveat.

So, if the OP were able to "pay off" her CCs with the "room and board" part of her COA loans, she would eliminate that $800 minimum payment she's now making.

She'd have to VERY disciplined not to start using those CCs again and running up their balances. Take them out of your wallet. Use a debit card only.
She won't eliminate the minimum payment on the car unless she either refinances the loan or pays it off entirely. If she throws 15k at a 28k car loan or whatever it is, all that usually does is decrease the number of payments so it's paid off sooner, but the minimum payment each month stays the same until it's paid off. You essentially pay off the final months of payment first, not the upcoming ones. That being said, if she takes out loans to cover the car loan then it's important that she understands that she has to hold that loan money to make monthly payments for the year, otherwise she'd throw down all her loan money for the year in one payment and still owe money the next month.

Also, is this like a 10 year repayment plan wtf? $400 something/month for a 40k car?! Am I missing something...?
 

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She won't eliminate the minimum payment on the car unless she either refinances the loan or pays it off entirely. If she throws 15k at a 28k car loan or whatever it is, all that usually does is decrease the number of payments so it's paid off sooner, but the minimum payment each month stays the same until it's paid off. You essentially pay off the final months of payment first, not the upcoming ones. That being said, if she takes out loans to cover the car loan then it's important that she understands that she has to hold that loan money to make monthly payments for the year, otherwise she'd throw down all her loan money for the year in one payment and still owe money the next month.

Also, is this like a 10 year repayment plan wtf? $400 something/month for a 40k car?! Am I missing something...?


I wasn't talking about "minimum payment on the car". I was talking about the $800 that she said was the minimum payment she was making on the $20k of credit card debt.

The car loan is likely a lowish interest rate since it sounds like it was a new car. She has to throw money at the CC debt...that is the high interest rate.

I can't figure out how much the car originally cost. She said that she owes $28k and that she bought it 3 years ago. She pays about $5k per year in payment...so she's made $15k worth of payments...and still owes $28k.


Her monthly payments are $470. There are some long term car loans....Toyota has some 72 month loans...maybe more. Maybe she refinanced it?
 
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Gotcha, i had never heard it called that acronym before, but essentially seems in line with my goals. I toy with the idea of getting another house near my current one and renting it out (we are very convenient to the county hospital that has residents and students) but wasn't eligible for a mortgage when the house that would have been perfect was available (too short time in private practice) and now that i can i haven't found something that makes we want to take the risk. But since our condo is paid off it is a nice profit center so the idea of having more is tempting.

Probably not that nice of me to bring that stuff up in a thread about credit card debt though. Sorry OP

Apologies to the OP from my side too for the derail- it is sort of related- the FI/RE lifestyle gives you true freedom from financial worry, which is what is afflicting her right now. But I agree, it's not as on-topic as it should be.

Congrats on your paid off Condo- excellent source of passive income!
 

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@bc65 just gave you an AMAZING gift, OP. S/he just did you a HUGE FAVOR by giving you the keys to a secret that most people don't find out until their sixties. That secret is Mr. Money Mustache's principles for a happy, financially secure, and fulfilling life.

One year ago, my brilliant friend @THS gave me this very same advice.

Today, one year later, you can see the results- that one website has completely changed my outlook on life and has made me very confident and empowered about my financial future.

OP, listen to @bc65 's advice that I have quoted above. It will serve you well. Read as much of MMM's blog that you can, and join the MMM forums.

I realize my unrestrained praise sounds like a marketing scheme- but the knowledge on there is free so you've got nothing to lose. And Mr. Money Mustache does NOT advertise on his website. In fact, he rejected a seven figure offer to buy out his website because he wants to educate his readers.

Make MMM your homepage now, and pass the word about MMM along. Life just got great for you.
I second this sparkling endorsement. That guy has changed my life. I look at "stuff" so differently now. That no nonsense philosophy to money and saving will be the reason I won't be a slave on the hedonic treadmill in my 30s and 40s.
 
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I would suggest reading Dave Ramsey's books, and listening to or calling his radio show and getting advice. At least get some sort of professional help with your debt. As dave says, "No matter how much in debt you're in, there is always hope."

Dave Ramsey would tell most people on this forum not to go to med school.
 
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