We Are $900,000 in Student Loan Debt

Brought to you by the EveryDollar app. Start budgeting for free today. I'm paycheck to paycheck and I'm drowning. So I just, I don't know how to get out of it. Um, so I guess that's the question. What do I do? So why are you paycheck to paycheck and why are you drowning? So, um, my, my wife and I have been together about 10 years. We have combined student loan debt of about 900 K to a million. Um, our income was until recently around 200 K a year. Uh, but I was recently laid off. So now it's cut in half. What are your degrees? We're both practicing attorneys. So I just started taking cases on my own, um, just to bring something in, but we always get to the same point whenever we discuss bills, um, she wants to pay all the bills whenever we have like a bill meeting and I want to save something because I know once we tell the bills for that, uh, time period or billing period, we end up with nothing left. So I just walk around like feeling like a fraud most of the time. And, uh, you know, I'm scared to be invited to any type of dinner or event because I'm just looking at the dollar sign calculating. Do I have enough for this? Do I have enough for that? Um, and that's been our life for, uh, you know, why are two attorneys only making a hundred thousand dollars a year? So we, we were both, um, nonprofit attorneys. Why, if you have $900,000 in student loan debt, did you take that stupid job? The, the plan was that, um, if you do that for a certain amount of time, um, you can get, um, the student loans forgiven if you work in that nonprofit sector. Yeah. Not true because it's not happened for very many people. 5% of the people get through that gauntlet. 95% don't. So you've been underpaid by 150 to $200,000 a year for years to try to get through a few hundred thousand in student loan debt. Yeah. So where are you guys at in that process? He's now opened his own firm, right? Yeah. I, yeah, basically just started, um, but you're not, you're not working for nonprofit rates anymore, but she still is correct. Correct. What I make, what I charge is completely ours or mine. What was the original balance of these student loans? Uh, it was, it was around, you know, 300 each. But then I think it ballooned to around the four 50 plus. How long ago did you pass the bar? Um, it's been about 11 years. So you, they were not forgiven. I, uh, I, I initially worked in private, so I only did about six, six to seven in the nonprofit. She's a, she's about at eight with the nonprofit. So she worked at a private as well. A little bit. Yeah. Um, well, our experiences is that very few people get those loans forgiven under that program. It's a, um, the program is full of holes and problems and loopholes. So, um, we work, we meet a whole lot of disillusioned people after working 10 years for substandard wages, uh, and service to the community and then don't get their loans forgiven. So I don't have a lot of hope in that. And of course you've started the clock over now. So your, yours is not relevant. So what would I do if I woke up in your shoes? I would make student loan reduction. My primary goal, therefore my income highest possible income, even if it's in a less than ideal situation, I want to make the most possible money for a short period of time. And really Jack your incomes way up and live on nothing, beans and rice, rice and beans, and attack these student loans with a vengeance. And no, you don't need to be going to a dinner party. If somebody invites you, you say, I have a million dollars in student loan debt. I can't go. And, um, that's what we're working on. And so it's job one, you got one job. It's that, and you guys get your incomes up as high as you can and your expenses down as low as you can. Now, as far as being able to eat and so forth, you've pulled that off for a decade. So, uh, you haven't thrown all the money at the student loans and then got to the end of the month that had no food. That's not what you're saying. Um, but no, you don't need to be saving money. You need to be getting these debts cleaned up, but you guys have not been aggressive on this because you've not been aggressive on your incomes. Correct. You weren't making it. You don't make a ton of money. I mean, a couple of hundred thousands, good money, but it's not good money if you owe a million. Yeah. I mean, it doesn't feel that way. No, it doesn't. It doesn't do it. It doesn't move the needle much. It moves it, but not enough to where you don't feel stuck. You felt like a rat in a wheel for a long time. And the math's against you. Unless you're paying more than the interest in principle, that thing's just going to move up and up and up. Yeah. You've got to get ahead of it by just throwing tens of thousands of this thing every month. Yeah. That's what it's going to take. Yeah. I need you making a couple of hundred each minimum and, uh, as soon as possible and preferably two 50 each or 300 each 80 hours a week, and you just work until you're blind, but you can clear this up and three or four years if you do that, but if not, you're going to be sitting here 10 years from now, still looking at this thing, you're going to have to do something pretty dramatic with the math, but if you take 900,000 and you start throwing two, 300,000 out of the year, 300 and a year, it's done in three years, but that means you're making between the two of you, 400 and living on a hundred not counting taxes, which means you're living on nothing. Yeah. And that, that's where, that's where I'm trying to get you to throw 300 a year at it and be done in three years. That's $25,000 a month, not $25,000 a year, which is what you've been doing because you've not even moved the needle. So I've got great hope, but it's all, you know, we call it the shovel and hole thing, Richard, the hole that your ends, 900, your shovel is your income, you've got a huge hole and a small shovel, I'm telling you, get a and the whole gets filled up a lot faster than, and it's three, I need $300,000 a year above my living expenses and taxes to throw it 900,000. And then I'm done in approximately three years. And, uh, but otherwise, if you just say it out loud, it takes your breath away. I have a million dollars and so I can't breathe. I can't think everything revolves around this, but if you have a clear cut plan, you're making 200 each, two 50, each are two 50 and one 50. And you start, and we're knocking this thing out in three years. You've got great hope. Your energy level is going to come up. Uh, the scales are going to fall away from your eyes or your depression's going to slip away. Your effectiveness as an attorney is going to be better and everything else. But right now that you, it's hard to see anything because you've got this huge concrete wall in front of your nose and it just, it blocks your vision for your life. And I'm sad, man. I'm so sorry. I'm not fussing at you. I'm fussing with you, but you gave up the opportunity to make no money. When you took on all this loan, you have to go make as much money as possible. Now, as soon as possible. And the more money you make, obviously the faster you're going to get out. And you know what I'm talking about? And it's going to be a lot of hours. I mean, a lot of sacrifice and you're going to put up with some stuff you don't want to put up with. You're going to be working at a firm. That's not, you don't necessarily love everything about it. A whoopty doopty. I don't like anything about my life right now. I need to change something and you need to change a bunch of stuff right now. Yeah. The conversation needs to change from, are we going to pay the bills first or save first? It is, we need to get our income way up and keep our expenses down to nothing so that we have that margin and you can do this math on paper and go, okay, how much are we willing to, to work? We're both going to work 80 hours a week for the next three, four years and knock this thing out. Because we've been doing this for a decade and the number went up. So what we've been doing isn't working. We got to try a different plan. And the debt snowball, like you mentioned, staring down 900 grand will take your breath away. But if you focus on the smallest debt and just go, that's the enemy right there. That's the villain. You have hope to fight the next one and the next one. That's what it's going to take. Create your free every dollar budget today. The simplest way to budget for your life.