The Money Mustache Community

Around the Internet => Antimustachian Wall of Shame and Comedy => Topic started by: StashinIt on January 03, 2013, 12:53:11 PM

Title: 200k in debt, better make a goal to add more in 2013
Post by: StashinIt on January 03, 2013, 12:53:11 PM
http://www.getrichslowly.org/blog/2013/01/02/honeys-financial-goals-for-2013/

Goals
1) Pay down debt
2) Add more debt

brilliant!

She gives her back story in a previous post: http://www.getrichslowly.org/blog/2012/07/23/where-im-starting-from-honeys-story/

This writer at GRS really drives me nuts! I've stopped reading GRS for the most part, but my goodness has it gone down hill fast. It is disgusting that this garbage is posted on a semi-reputable source!
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: SpendyMcSpend on January 03, 2013, 12:55:25 PM
Wow:

"Our bookshelves, couch, and dining set wonít survive another move"
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Phoebe on January 03, 2013, 01:20:54 PM
I commented on that post suggesting that she try "gazelle intensity" for 2013 to really pay down her debt.  She replied to me saying that approach wasn't for her, she won't give up happy hours and travel.  I guess she hasn't read the "your debt is your emergency" MMM post.

To each their own, but it's hard to read about stories like this on a money saving blog.  And sadly, this one was pretty good compared to her previous posts where she justifies massages and her Dooney and Burek (sp?) purse. 
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Self-employed-swami on January 03, 2013, 01:40:26 PM
I seriously have to wonder why she bothers paying this bill:

-Mensa annual dues: $60

???
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Self-employed-swami on January 03, 2013, 01:44:51 PM
And now that I've read the second post, I'm left seriously questioning how she ever would have gotten into Mensa? 

Lalala, let's add a huge mortgage onto our already huge student loans,  lalala...



(http://www.gifflix.com/files/e27157adaaa8.gif)
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Jack on January 03, 2013, 01:52:21 PM
Am I the only one who thinks (lifestyle inflation aside) that paying down bad debt and increasing low-interest leverage isn't a bad idea?

One of my goals -- maybe not for 2013, but at least before interest rates start going up -- is to buy as much investment property at 3% interest as I can possibly afford.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Self-employed-swami on January 03, 2013, 01:58:08 PM
And I'm of the mindset that I want to pay my mortgage off, since it is so cheap to do so. For some reason, looking at the balance shrink, and the guaranteed interest savings, is much more motivating to me, than to hope that an investment increases.

However, as soon as we have our house paid off, I'd like to buy a rental property, hopefully at a reasonably low rate too.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: gecko10x on January 03, 2013, 02:05:04 PM
Am I the only one who thinks (lifestyle inflation aside) that paying down bad debt and increasing low-interest leverage isn't a bad idea?

One of my goals -- maybe not for 2013, but at least before interest rates start going up -- is to buy as much investment property at 3% interest as I can possibly afford.

Yeah, this post doesn't sound bad to me: Pay down bad debt, buy a house, increase income, plan for future expenses. Aside from the fact that she's just completely glossing over closing costs and moving costs (but maybe they already have money set aside for that), it sounds pretty well-rounded.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: SpendyMcSpend on January 03, 2013, 02:20:24 PM
Nope this couple has serious financial problems!

http://www.getrichslowly.org/blog/2012/08/02/when-one-partner-wont-budget/
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: twinge on January 03, 2013, 02:32:00 PM
Quote
Yeah, this post doesn't sound bad to me: Pay down bad debt, buy a house, increase income, plan for future expenses. Aside from the fact that she's just completely glossing over closing costs and moving costs (but maybe they already have money set aside for that), it sounds pretty well-rounded.

Yeah, until you look at the back-story that they have $200K in debt the largest one she doing "interest-only" payments on and she's priding herself on paying off 5K of it in the past 6 months which has come from using windfalls not from ongoing expense reduction.  -Then there's the post Meadow linked to where it seems like she's the more frugal one in the relationship and her husband's income is now irregular and likely half his prior income AND he hasn't paid any taxes on it! Yikes.  It's amazing how one can have the tone of sane decision-making, "goal-setting" etc. when a different reality is boiling underneath.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: StashinIt on January 03, 2013, 03:15:34 PM
Am I the only one who thinks (lifestyle inflation aside) that paying down bad debt and increasing low-interest leverage isn't a bad idea?

One of my goals -- maybe not for 2013, but at least before interest rates start going up -- is to buy as much investment property at 3% interest as I can possibly afford.

You're right, it's not necessarily a bad idea. It's more about the attitude the writer has displayed in previous pieces. Without the background it doesn't sound so bad. I've just read enough of her stuff that when this one popped up I said to myself 'ohhh nooooo! the train wreck continues'.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: destron on January 03, 2013, 03:37:35 PM
And now that I've read the second post, I'm left seriously questioning how she ever would have gotten into Mensa? 

Lalala, let's add a huge mortgage onto our already huge student loans,  lalala...

(http://www.gifflix.com/files/e27157adaaa8.gif)

This really isn't a terrible idea. Between paying off mortgage, having a renter and tax advantages, my house costs me less than my old one bedroom apartment. It all depends on how much it costs to rent vs. own, your income, etc...
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Rich M on January 03, 2013, 08:24:47 PM
I seriously have to wonder why she bothers paying this bill:

-Mensa annual dues: $60

???

That is one of the funniest things ever!
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Self-employed-swami on January 03, 2013, 08:32:21 PM
I seriously have to wonder why she bothers paying this bill:

-Mensa annual dues: $60

???

That is one of the funniest things ever!

;D
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Rich M on January 03, 2013, 08:53:20 PM
I seriously have to wonder why she bothers paying this bill:

-Mensa annual dues: $60

???

That is one of the funniest things ever!

;D

She even mentioned it in more than one post....  Jake had one too in his irregular expenses.  It kinda looked like it was cut and pasted since how can an annual fee be irregular?  I guess we are suppose to think they are credible since they pay $120 a year between them to Mensa?

Quote
Jakeís Irregular Expenses
Unless otherwise noted, the amount listed reflects just his share, even for things like auto insurance that will be joint going forward, since we havenít combined finances yet. For some categories ó like auto expenses, gifts, and healthcare ó Iím assuming his costs are about the same as mine until I have data suggesting otherwise. These are annual numbers.

    Auto insurance: $840. This is the annual total; he pays $420 every six months in January and July. Similarly, in my recent post when I said my auto insurance was $500, that was also the annual total. I pay about $250 every six months.

    Auto expenses (repair/maintenance): $250

    Auto registration: $250. Quite a bit more than mine, since his car is 8 years newer (and also much nicer).

    Gifts: $1000

    Health care (copays, etc): $500. Numerous people said my $1000/year estimate was high, and when I double-checked, I realized that Iíd double-counted my massage costs in both the irregular expenses category and the recurring monthly category. This means my actual irregular medical expenses last year were closer to $230. However, I think itís best to estimate high in this category, and I know Jake has more prescriptions than I do.

    Vet expenses (pets): $2300. As noted in my previous breakdown, he would have paid half of this. All three of our pets had dentals last year, and one of the cats had an extraction while the other had some medical issues that had to be resolved before she could go under anesthesia. This category also includes grooming for the dog (a poodle), which runs about $50 per grooming.

    Mensa annual dues: $60

    Total: $4050

Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: arebelspy on January 03, 2013, 10:06:44 PM
Since being taken over by corporate interests, GetRichSlowly encourages poor financial decisions because their target audience is people who are bad at money, and they want to advertise mediocre financial products to them.

Thus they don't offer good advice anymore, but just make these people feel better about their stupid money decisions to keep them coming back.  What the readers (and authors) really need is a punch in the face ala MMM.

However I do agree with Jack - I'm trying to load up on as much low interest debt as possible.  If and when inflation hits, I'll be quite well positioned (and even if it doesn't, all that low interest debt is getting me investments returning great cash flow).  This is different than what the author is intending though.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: marty998 on January 04, 2013, 12:46:05 AM
Honey Smith? Surely that is a made up name.

Seems her financial goal is to find a way to save enough to spend it all.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: amyable on January 04, 2013, 08:12:53 AM
This is unfortunately the financial reality for most people.  Debt is now a norm.

The other day, while out with friends, I off-handedly said I wanted to retire early and everyone looked at me like I had three heads. 

I remember when she auditioned for the job at GRS, lots of the younger readers liked her, because her situation felt very real to them.  I really feel for her, because many, many of my friends are in similar situations.

She has a Ph.D. in Rhetoric and Composition and her husband has a law degree.  I believe he quit a high paying job (around $90,000 a year) to start his own private practice recently--she said he makes about half that now (so about $45,000, which seems really low for law).  She makes like $40,000 a year as a college admin.  I'm thinking they are betting on some kind of earnings increase. 
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Jack on January 04, 2013, 08:17:42 AM
She has a Ph.D. in Rhetoric and Composition and her husband has a law degree.  I believe he quit a high paying job (around $90,000 a year) to start his own private practice recently--she said he makes about half that now (so about $45,000, which seems really low for law).  She makes like $40,000 a year as a college admin.  I'm thinking they are betting on some kind of earnings increase.

Wow, that sure makes me feel better about me and my wife's education to income ratio!
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Forcus on January 04, 2013, 08:22:57 AM

I remember when she auditioned for the job at GRS, lots of the younger readers liked her, because her situation felt very real to them.  I really feel for her, because many, many of my friends are in similar situations.

That is the way I interpretted it, which probably means that people are much worse off than they think they are (with respect to ever being able to retire). I understand their thinking as it wasn't that long ago that we were very similar, but I think the effect it is having is, as someone pointed out above, making them feel warm and fuzzy about their stupid financial ways. I especially like the almost $1k a year in hair products and maintenance alone, the many thousands on vacations, etc etc. In their situation, no way.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: amyable on January 04, 2013, 08:52:39 AM
I understand their thinking as it wasn't that long ago that we were very similar, but I think the effect it is having is, as someone pointed out above, making them feel warm and fuzzy about their stupid financial ways.

This is so true.  I really agree with what arebelspy said as well.  There's definitely some benefit to commiseration and sharing debt horror stories with each other, but a delicate hug / facepunch balance must be maintained in order to motivate actual behavioral change. 
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: sherr on January 04, 2013, 09:02:20 AM
There's definitely some benefit to commiseration and sharing debt horror stories with each other, but a delicate hug / facepunch balance must be maintained in order to motivate actual behavioral change.

Well and hilariously said. I also like your username.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: James on January 04, 2013, 09:25:55 AM
I remember when she auditioned for the job at GRS, lots of the younger readers liked her, because her situation felt very real to them.  I really feel for her, because many, many of my friends are in similar situations.

It's a coincidence that I stopped following GRS around that time, I remembering reading a post or two from her, but by then the blog had already lost most of its interest for me.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: plantingourpennies on January 04, 2013, 09:49:23 AM
I have never read GRS, but Honey seems like a trip.

What did GRS have before that it doesn't anymore?

Ie. Why did this group stop reading it as often?

Best,
Mr. Pop
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Phoebe on January 04, 2013, 10:00:03 AM
It used to be written by a single author, and it included sound financial advice (though pretty basic once you've been over to MMM) but it has now been sold and the original author no longer writes on it at all.  There is now a staff of people who write, and Honey Smith is probably the worst example.

I felt frustrated going to a PF site I as hoping to learn something from, and instead found really bad decision making being flaunted.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: dragoncar on January 04, 2013, 10:24:14 AM
You know how people say the lottery is a tax on those who can't do math?

I say a Mensa membership is a tax on those who can.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: plantingourpennies on January 04, 2013, 11:29:29 AM
LOL@ Dragoncar

I was JUST reading your journal on ERE-very impressive!

Best,
Mr. Pop
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: mustachecat on January 04, 2013, 12:01:48 PM
I'm embarrassed to say that I kind of love reading Honey's posts just for the utterly delicious schadenfreude. I'm a terrible person, I know.

I get the whole low-interest-rate thing, but I don't understand why they want to buy a house now. It's just her and her husband, and they currently rent a two-bedroom condo, but there's not enough room for a home office? What do they use the second bedroom for? Also, they're looking at FHA loans, which means they want to put as little money down as possible, which means they'll have PMI on top of their mortgage...
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Tyler on January 04, 2013, 12:15:10 PM
Am I the only one who thinks (lifestyle inflation aside) that paying down bad debt and increasing low-interest leverage isn't a bad idea?

One of my goals -- maybe not for 2013, but at least before interest rates start going up -- is to buy as much investment property at 3% interest as I can possibly afford.

For a primary home, low interest debt can work for you if you have the money to cover it and choose to invest rather than pay cash for the house. In that case, any investment return over and above your interest rate is your income on that debt.

But the writer essentially has no savings and is looking at a grand total of $380k+ in total debt. No investment income is possible, and the $150k number appears to have been selected to result in the same monthly payment they have now with no money down.  So the only monetary perk is the meager principal in the first 10 years of a 30-year mortgage less PMI, all the decorating and upkeep she'll want for the new place, and the back end load of selling costs down the line. I'll wager she loses money in that deal.

One can argue that there's a time and place for good mortgage debt, but I don't think she's anywhere near that right now. Even if a mortgage is a small net gain, I think she's wasting mental energy on the wrong areas considering the hole she's in.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: MountainFlower on January 05, 2013, 09:02:30 PM
I commented on that post suggesting that she try "gazelle intensity" for 2013 to really pay down her debt.  She replied to me saying that approach wasn't for her, she won't give up happy hours and travel.  I guess she hasn't read the "your debt is your emergency" MMM post.

To each their own, but it's hard to read about stories like this on a money saving blog.  And sadly, this one was pretty good compared to her previous posts where she justifies massages and her Dooney and Burek (sp?) purse.

Okay, I'm not going to defend Honey.  She clearly has a ways to go!  However, she explained in another post that when she was in high school, she took care of her mother who had a debilitating genetic disease and was confined to the home in a wheelchair.    It was her life.  Her mother died young...maybe around 40.  Honey may also have this disease, whatever it is, and she has said that her philosophy is to enjoy life and health because she has no idea when it might end for her given this potential disease.

 I know that some people are rolling their eyes, but really, imagine your high school life is going to school and then coming home to change your mother's diapers, give her a bath, and feed her knowing that that might be you in a few years.   I think most of us could be sympathetic to that. 

However, I agree that Honey's posts still have some sort of entitlement edge to them that can be irksome and she is the queen of rationalization. 
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Jamesqf on January 05, 2013, 10:28:07 PM
I don't know: I think if I was faced with the probablity that I only had a short time to live, I could find more fulfilling ways of spending that time than happy hours.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: sheepstache on January 05, 2013, 11:07:24 PM
I'm glad that I found MMM through GRS (and ERE through MMM--so many acronyms!) but I got sort of disenchanted with it when the guy announced he was divorcing his wife.  It's his life, of course.  But, I don't know, it was a superstitious reaction because I had just gotten engaged and my parents and a lot of people I know are divorced so I felt like I should consciously try to keep positive examples of marriage in front of me so that hopefully I'll develop the skills to be good at it.  (also maybe that research had recently come out about obesity being "contagious" in social groups?  So it seemed reasonable to try to control my social influences.)

I still checked in on GRS occasionally but then one day one of the guest posters had a post about free yoga classes being a great money saver and there is a switch in my head that turns my brain off whenever I hear the word 'yoga' so I had no choice but to go cold turkey after that.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: James on January 06, 2013, 09:32:08 AM
I wouldn't say I stopped reading GRS because it became so terrible, but because it was no longer worth my time.  You have to be ruthless in cutting out all the crap you keep up with on the web, otherwise there is no room to add truly valuable reading while still limiting your screen time.  The few posts there worth reading became outnumbered by the junk.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: arebelspy on January 06, 2013, 10:31:03 AM
The few posts there worth reading became outnumbered by the junk.

How does that not translate to "terrible"

I wouldn't say I stopped reading GRS because it became so terrible, but because it was no longer worth my time.

If you said it was still good, but replaced by something else (MMM?), that could be not worth your time. Or that it was good, but you knew it all since it was basic, ditto.

But ending with the posts being worth reading being outnumbered by "junk" = no, the site really became terrible, it just sounds harsh to say.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: sol on January 07, 2013, 01:33:46 PM
But ending with the posts being worth reading being outnumbered by "junk" = no, the site really became terrible, it just sounds harsh to say.

Agreed, GRS is a lost cause.  I used to read it, years and years ago, and mostly kept up until he started doing mostly guest posts which I though were crappy.  Then when we admitted he had already sold out and the guest posts were the new normal, and was then divorcing his wife because he's an irresponsible manchild, I never went back.  Such a load of crap.

I can't really blame J.D. Roth for cashing out of a successful business that he built, but I can blame him for tarnishing the brand.  It would be like the founder of The New Yorker selling the business to TMZ.  A shameful way to ruin what you have built.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Christiana on January 07, 2013, 03:13:55 PM
I find her posts entertaining, in a Casey Serin-style trainwreck sort of way, but she is definitely on a path to Get Rich Never.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: arebelspy on January 07, 2013, 05:23:37 PM
I find her posts entertaining, in a Casey Serin-style trainwreck sort of way, but she is definitely on a path to Get Rich Never.

Hah, Casey Serin, wish that guy was still around.  I just realized 2012 is over so Island 2012 must be a bust.. Who'da thunkit.  ;)
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: justajane on January 19, 2015, 01:43:58 PM
For those who are interested, Honey Smith's yearly "progress" report was published on GRS today:

http://www.getrichslowly.org/blog/2015/01/19/honey-progress-report-2014-wrap-up-and-2015-goals/

To save you the trouble, after two more years, she and her husband now owe (drumroll) $186,256.

How depressing. What's even more depressing is how positive the comments were. Basically they are each paying around $400 a month towards their gargantuan loans. That's about what I was paying to accelerate my $15,000 loans in the early 2000s!

I have the sneaking suspicion that they are just paying the minimum until they are forgiven but can't really admit that on a personal finance website.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Lanthiriel on January 19, 2015, 05:53:55 PM
How depressing. What's even more depressing is how positive the comments were. Basically they are each paying around $400 a month towards their gargantuan loans. That's about what I was paying to accelerate my $15,000 loans in the early 2000s!

THANK YOU for posting this. I've been reading GRS for maybe three years now, and I cannot for the life of me figure out how they still let Honey write for them. There was a period where people were calling her out, but I think those of us who think she's the last person who should be writing for a personal finance blog just stopped commenting. Seemingly everything is more important to her than personal finance--having pets, owning a house, vacations, you name it. If I were her, I would be embarrassed to post my numbers in a journal, let alone an actual post.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: justajane on January 19, 2015, 07:14:22 PM
How depressing. What's even more depressing is how positive the comments were. Basically they are each paying around $400 a month towards their gargantuan loans. That's about what I was paying to accelerate my $15,000 loans in the early 2000s!

THANK YOU for posting this. I've been reading GRS for maybe three years now, and I cannot for the life of me figure out how they still let Honey write for them. There was a period where people were calling her out, but I think those of us who think she's the last person who should be writing for a personal finance blog just stopped commenting. Seemingly everything is more important to her than personal finance--having pets, owning a house, vacations, you name it. If I were her, I would be embarrassed to post my numbers in a journal, let alone an actual post.

Yeah, I've been reading and commenting for a long time, but I gave up about 6 months ago. I check back every few weeks to see what is posted, but I mainly check to see if any of the articles have generated significant comments.

I actually don't mind Honey's articles usually, but her debt pay down rate is pathetic. Seriously sad. I can't believe people are patting her on the back. On the student loans she is essentially treading water. Earlier this year I came down pretty hard on her on the solar panels. I essentially told her in the comments that it would be absolute financial stupidity for her to put money towards panels when she has that much debt. And I have solar on my roof, so I'm not against them per se. Obviously she didn't listen to me or the others who chimed in to tell her it would be a mistake. Oh, well. You can't fix stupid, but you're right that it's pretty insane that she is a staff writer for a personal finance site.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: steveo on January 19, 2015, 07:42:49 PM
I seriously have to wonder why she bothers paying this bill:

-Mensa annual dues: $60

???

Nicely played.
Title: .
Post by: This_Is_My_Username on January 19, 2015, 09:56:17 PM
Thanks for the update on this old thread, justajane.


Quote
I have the sneaking suspicion that they are just paying the minimum until they are forgiven


student loans?

What is the likelihood of this happening in your country?
Title: Re: .
Post by: dragoncar on January 19, 2015, 10:33:14 PM
Thanks for the update on this old thread, justajane.


Quote
I have the sneaking suspicion that they are just paying the minimum until they are forgiven


student loans?

What is the likelihood of this happening in your country?

In the US, student loan debt is forgiven after 25 years of repayment (20 in some cases, 10 for public service).
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: James on January 20, 2015, 10:57:49 AM
I decided someone probably should post something contrary, at least those that follow her closely might read it and realize she is not helping anyone.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: arebelspy on January 20, 2015, 11:20:06 AM
I decided someone probably should post something contrary, at least those that follow her closely might read it and realize she is not helping anyone.

Good for you.  She just excused her poor progress as "we were saving for a down payment" and that GRS does things differently than MMM (so that means that since MMM is badass, you should be piss poor apparently?), but maybe some reader will see your comment and wander over to see what that MMM thing is.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Angie55 on January 20, 2015, 11:23:31 AM
Reading through some old posts to see how she justified buying a house....

She only had money to put a whole 5% down because they didn't pay rent for 6 months while their apartment was being foreclosed on AND the foreclosure bank paid them 2k to move out... OMG can't even save up 10k when you aren't even bothering to pay down your loans.
Title: Re: .
Post by: vivophoenix on January 20, 2015, 11:36:39 AM
Thanks for the update on this old thread, justajane.


Quote
I have the sneaking suspicion that they are just paying the minimum until they are forgiven


student loans?

What is the likelihood of this happening in your country?

In the US, student loan debt is forgiven after 25 years of repayment (20 in some cases, 10 for public service).

sorry if this is rambling :
one thing about this whole loan forgiveness thing that i wonder, esp in her case:


if they are federal, every year you have to send in paperwork proving you cant afford your loans. this program is for people who will never in those 25 years start earning 'decent' money

as she and her husband are both high potential earners,  i would be concerned that at some point the government will decide you can afford the payments, at that point you are on the hook for normal payments.

i mean based on inflation and tiny raises alone , I  assume that at some point she will be earning enough to afford her loans.

and from my understanding they look at what they think you should pay, not what you think you can afford to pay. ( so this may raises gradually every year any way)

since she is doing interest only payments this means the balance hasnt changed in oh lets say 10 years.  so she now starts making interest and principal payments based on the original  loan in the remaining 15 years. ( she wasted 10 making interest only payments in this scenario)



id be concerned i would end up paying for the loan and more. and maybe she actually reaches 25 years without paying it all off. now she owes the taxes on being 'forgiven' $200,000. im assuming this would be at the 34% tax rate. ( cause this is on top of what ever her and hubbers make for that year)

i did the math for the best case scenario based on the programs available for federal loans. i doutb this is the case for her.

 taxes after forgiveness= 68k
interest only payments for 25 years= 199800 ( im giving her a 4% apr, which with grad loans i doubt she has. )



Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: AJ on January 20, 2015, 11:50:02 AM
Agreed, GRS is a lost cause.  I used to read it, years and years ago, and mostly kept up until he started doing mostly guest posts which I though were crappy.  Then when we admitted he had already sold out and the guest posts were the new normal, and was then divorcing his wife because he's an irresponsible manchild, I never went back.  Such a load of crap.

This 100% sums up my feelings towards GRS.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: James on January 20, 2015, 11:59:05 AM
Agreed, GRS is a lost cause.  I used to read it, years and years ago, and mostly kept up until he started doing mostly guest posts which I though were crappy.  Then when we admitted he had already sold out and the guest posts were the new normal, and was then divorcing his wife because he's an irresponsible manchild, I never went back.  Such a load of crap.

This 100% sums up my feelings towards GRS.


Same here, just sad because it had great potential...
Title: Re: .
Post by: justajane on January 20, 2015, 12:21:17 PM
Thanks for the update on this old thread, justajane.


Quote
I have the sneaking suspicion that they are just paying the minimum until they are forgiven


student loans?

What is the likelihood of this happening in your country?

In the US, student loan debt is forgiven after 25 years of repayment (20 in some cases, 10 for public service).

sorry if this is rambling :
one thing about this whole loan forgiveness thing that i wonder, esp in her case:


if they are federal, every year you have to send in paperwork proving you cant afford your loans. this program is for people who will never in those 25 years start earning 'decent' money

as she and her husband are both high potential earners,  i would be concerned that at some point the government will decide you can afford the payments, at that point you are on the hook for normal payments.

i mean based on inflation and tiny raises alone , I  assume that at some point she will be earning enough to afford her loans.

and from my understanding they look at what they think you should pay, not what you think you can afford to pay. ( so this may raises gradually every year any way)

since she is doing interest only payments this means the balance hasnt changed in oh lets say 10 years.  so she now starts making interest and principal payments based on the original  loan in the remaining 15 years. ( she wasted 10 making interest only payments in this scenario)



id be concerned i would end up paying for the loan and more. and maybe she actually reaches 25 years without paying it all off. now she owes the taxes on being 'forgiven' $200,000. im assuming this would be at the 34% tax rate. ( cause this is on top of what ever her and hubbers make for that year)

i did the math for the best case scenario based on the programs available for federal loans. i doutb this is the case for her.

 taxes after forgiveness= 68k
interest only payments for 25 years= 199800 ( im giving her a 4% apr, which with grad loans i doubt she has. )

Thanks for the breakdown. I don't know why it didn't occur to me until just now that interest isn't compounding and that they are on IBR. Otherwise, with that low monthly payment, they likely would owe more than they started the year owing.

I can't imagine how her husband qualifies, though. Isn't he a lawyer pulling in at least 80K? If you can qualify with that income, I would be pretty pissed as a taxpayer. But you bring up an excellent point that the rules can change at any point. 25 years is a long time, as well. I can't imagine be under that degree of debt (with no collateral) for that long.

I have to admit that it irks me that loans would be forgiven eventually in her position. She has the ability the pay them back; she just chooses not to. I don't appreciate a system that allows people to tread water like that. It's not good for them, and it's not good for us.

Re James' comments, she really doesn't get it regarding the student loans. It's pretty clear from her response. They eclipse any other success she has made in her finances and budget. But be prepared for more attacks on the "Hair on Fire" approach to debt. Apparently it is overly punitive, since it means that you have to feel guilty about vacations, 5% down home mortgages, and buying whatever else strikes your fancy at the time.
Title: Re: .
Post by: dragoncar on January 20, 2015, 12:24:01 PM
Thanks for the update on this old thread, justajane.


Quote
I have the sneaking suspicion that they are just paying the minimum until they are forgiven


student loans?

What is the likelihood of this happening in your country?

In the US, student loan debt is forgiven after 25 years of repayment (20 in some cases, 10 for public service).

sorry if this is rambling :
one thing about this whole loan forgiveness thing that i wonder, esp in her case:


if they are federal, every year you have to send in paperwork proving you cant afford your loans. this program is for people who will never in those 25 years start earning 'decent' money

as she and her husband are both high potential earners,  i would be concerned that at some point the government will decide you can afford the payments, at that point you are on the hook for normal payments.

i mean based on inflation and tiny raises alone , I  assume that at some point she will be earning enough to afford her loans.

and from my understanding they look at what they think you should pay, not what you think you can afford to pay. ( so this may raises gradually every year any way)

since she is doing interest only payments this means the balance hasnt changed in oh lets say 10 years.  so she now starts making interest and principal payments based on the original  loan in the remaining 15 years. ( she wasted 10 making interest only payments in this scenario)



id be concerned i would end up paying for the loan and more. and maybe she actually reaches 25 years without paying it all off. now she owes the taxes on being 'forgiven' $200,000. im assuming this would be at the 34% tax rate. ( cause this is on top of what ever her and hubbers make for that year)

i did the math for the best case scenario based on the programs available for federal loans. i doutb this is the case for her.

 taxes after forgiveness= 68k
interest only payments for 25 years= 199800 ( im giving her a 4% apr, which with grad loans i doubt she has. )

Yes, I once ran the numbers for a law school friend who was considering working for the government.  I ran scenarios under normal payment, IBR, etc.  One option was IBR for 10 years until the loan is forgiven.  But the huge risk was that she might go into private sector in, say, 5 years if she doesn't like working for the government.  Then her salary and payments would jump and most importantly she'd have to pay back all that deferred interest.  The deferred interest issue is equally a problem for the 25-year repayment case if you end up having a large salary in later years (isn't this really the most likely scenario?). 

It's often an equally good option to just pay back as quickly as possible and continue to live like a grad student.  But that's interest rate sensitive too (I think we were talking around 6-8% blended rate)
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: mhufft920 on January 20, 2015, 12:30:56 PM
Wow. 

https://screen.yahoo.com/dont-buy-stuff-000000884.html
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: vivophoenix on January 20, 2015, 12:33:11 PM
i owe a large amount of student loans  and i doubt that they qualified for many of the programs offered.


you are allowed to no questions asked claim some forbearance or deferment months. but to be honest the math of her paying 400/ month towards her loans totaling  ~100k does not add up.

unless they arent legally married. she does mention only making 40k somewhere  which would probably qualify her for the newer IBR they just rolled out
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: SuperSaver on January 22, 2015, 02:30:13 PM
Kirsten Wong just left GRS. I use to read it all the time when JD started out, when he sold out I started reading a few articles every few months. Too much garbage and filler. I would read Kristen & El Nerdo :)

& like a total rubber necker gawk at Honeys lack of financial sense on a "personal finance" forum.

 They are officially out of writers worth reading. The best thing from GRS in the past 2 years was it led me to MMM via comments.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: KodeBlue on January 22, 2015, 09:06:42 PM
Get Rich Slowly....very slowly...
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: zephyr911 on January 23, 2015, 02:39:47 PM
Get Rich Slowly....very slowly...
The MMM approach of pedal-to-the-metal may not be for everyone, but hot damn is it nice when you look back and realize how far you've come. (I just did my quarterly-ish review and giggled a little)
Everyone comes from a different place but once it sinks in how easy it is to really change your situation - and FAST - one wonders why anyone would ever do things any other way.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: damize on January 23, 2015, 02:59:11 PM
The best thing from GRS in the past 2 years was it led me to MMM via comments.

This.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: arebelspy on January 23, 2015, 03:08:34 PM
Everyone comes from a different place but once it sinks in how easy it is to really change your situation - and FAST - one wonders why anyone would ever do things any other way.

Well said.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: James on January 23, 2015, 07:14:35 PM
Get Rich Slowly....very slowly...


I wrote something to that effect in the comments on her post... :D
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Lauran75 on January 24, 2015, 08:31:44 PM
I don't have any student loans, but my bf does. They just started letting him do IBR (they'd been in deferment? for years before that.) He's never going to make more than he is right now ...(he's 48 - went back to school at 38 and got a two-year business degree which he did nothing with.)  When he talked about doing the IBR thing, I wondered about the interest racking up - but it sounds like they don't charge interest while you are doing IBR?? If so, that is good news!

(I was extremely lucky to make it through college and grad school with no loans. College due to my dad being a minister and the 70% tuition deduction +trust fund from a medical malpractice suit my mom won = grad school I paid for out of pocket from previous savings while living as cheaply as possible and working 25 hours a week, not to mention a good bit of scholarship money.)
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: dragoncar on January 24, 2015, 09:16:30 PM
I don't have any student loans, but my bf does. They just started letting him do IBR (they'd been in deferment? for years before that.) He's never going to make more than he is right now ...(he's 48 - went back to school at 38 and got a two-year business degree which he did nothing with.)  When he talked about doing the IBR thing, I wondered about the interest racking up - but it sounds like they don't charge interest while you are doing IBR?? If so, that is good news!

(I was extremely lucky to make it through college and grad school with no loans. College due to my dad being a minister and the 70% tuition deduction +trust fund from a medical malpractice suit my mom won = grad school I paid for out of pocket from previous savings while living as cheaply as possible and working 25 hours a week, not to mention a good bit of scholarship money.)

I'm pretty sure they charge interest.  The interest may not compound, though.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Lauran75 on January 24, 2015, 09:21:30 PM
I don't have any student loans, but my bf does. They just started letting him do IBR (they'd been in deferment? for years before that.) He's never going to make more than he is right now ...(he's 48 - went back to school at 38 and got a two-year business degree which he did nothing with.)  When he talked about doing the IBR thing, I wondered about the interest racking up - but it sounds like they don't charge interest while you are doing IBR?? If so, that is good news!

(I was extremely lucky to make it through college and grad school with no loans. College due to my dad being a minister and the 70% tuition deduction +trust fund from a medical malpractice suit my mom won = grad school I paid for out of pocket from previous savings while living as cheaply as possible and working 25 hours a week, not to mention a good bit of scholarship money.)

I'm pretty sure they charge interest.  The interest may not compound, though.

Ok, that makes more sense. Thanks!
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: JustTrying on January 24, 2015, 11:16:47 PM
I don't have any student loans, but my bf does. They just started letting him do IBR (they'd been in deferment? for years before that.) He's never going to make more than he is right now ...(he's 48 - went back to school at 38 and got a two-year business degree which he did nothing with.)  When he talked about doing the IBR thing, I wondered about the interest racking up - but it sounds like they don't charge interest while you are doing IBR?? If so, that is good news!

(I was extremely lucky to make it through college and grad school with no loans. College due to my dad being a minister and the 70% tuition deduction +trust fund from a medical malpractice suit my mom won = grad school I paid for out of pocket from previous savings while living as cheaply as possible and working 25 hours a week, not to mention a good bit of scholarship money.)

I'm pretty sure they charge interest.  The interest may not compound, though.

Ok, that makes more sense. Thanks!

I think that the interest does not compound for the first 3 years while one is paying with IBR - after that, it does??? I read that on a blog today though, so I'm not sure how accurate it is...
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: justajane on February 28, 2015, 07:58:05 PM
In new Honey news, she and her husband just spent $5,500 replacing a fully functioning but older HVAC system.

http://www.getrichslowly.org/blog/2015/02/26/honey-progress-report-replacing-our-hvac-part-i/

I just can't fathom replacing a working system if I had that much debt hanging over my head. We replaced ours a few years back before the federal credit for high efficiency units expired, but we had no debt and considerable savings.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: brooklynmoney on February 28, 2015, 09:04:47 PM
The whole Honey saga really just astounds me. I mean I find their fiscal irresponsibility to be shocking. And the constant denial about the state they are in. Oy vey.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: zephyr911 on March 02, 2015, 08:59:23 AM
In new Honey news, she and her husband just spent $5,500 replacing a fully functioning but older HVAC system.

http://www.getrichslowly.org/blog/2015/02/26/honey-progress-report-replacing-our-hvac-part-i/

I just can't fathom replacing a working system if I had that much debt hanging over my head. We replaced ours a few years back before the federal credit for high efficiency units expired, but we had no debt and considerable savings.
There's surely some ROI associated with updating HVAC, given the upward trend in SEER ratings. It may not be as high as the APR on their debt, obviously, but it's nowhere near mainstream consumer retardation.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: partgypsy on March 02, 2015, 10:15:42 AM
I learned about MMM from get rich slowly and now read this site way more than GRS.
What other personal finance/development sites would you all recommend.

I also understand the trainwreck aspect of reading Honey's writing. I did the same for this other blog (which no longer exists) which almost seemed made up because of the comically ineffective way the head of the household was trying to save money, but then give money to relatives who would literally buy vehicles, porn, etc.
same thing for MP Dunleavy's writing, which seemed full of rationalizations but were still enjoyable to read (I wonder where she is now?)
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: justajane on March 02, 2015, 11:42:15 AM
In new Honey news, she and her husband just spent $5,500 replacing a fully functioning but older HVAC system.

http://www.getrichslowly.org/blog/2015/02/26/honey-progress-report-replacing-our-hvac-part-i/

I just can't fathom replacing a working system if I had that much debt hanging over my head. We replaced ours a few years back before the federal credit for high efficiency units expired, but we had no debt and considerable savings.
There's surely some ROI associated with updating HVAC, given the upward trend in SEER ratings. It may not be as high as the APR on their debt, obviously, but it's nowhere near mainstream consumer retardation.

No, but it's just part and parcel of the same mentality that debt has no consequences and that life can essentially carry on as usual. I guess Honey's story is that in many respects it can, if you are able to divorce yourself from the "what ifs" and live in the moment.

I think we would all be less harsh about this, if she weren't a staff writer for a personal finance blog.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: sol on March 02, 2015, 11:47:21 AM
I think we would all be less harsh about this, if she weren't a staff writer for a personal finance blog.

Unless her idea of "personal finance" is "how to be really stupid with money" then I see no problem with judging in this scenario.  I also judge pacifists who work for the military.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: zephyr911 on March 02, 2015, 12:35:07 PM
I think we would all be less harsh about this, if she weren't a staff writer for a personal finance blog.
Fair enough. I don't know all the details of her situation, but that article does mention they had $23K in a savings account before the HVAC debacle, which - since, as mentioned, they have substantial debt - is just dumb. Springy debt cushion, the only way to fly.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: sleepyguy on March 03, 2015, 09:22:29 AM
Agreed!

I've deleted that site from my financial reading material LONG ago...

This is the most sad part

"Honey Smith has been reading GRS since at least 2008"

His articles were decent then... don't think she/they have learned a single thing besides blogging.

I think we would all be less harsh about this, if she weren't a staff writer for a personal finance blog.

Unless her idea of "personal finance" is "how to be really stupid with money" then I see no problem with judging in this scenario.  I also judge pacifists who work for the military.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: arebelspy on March 03, 2015, 10:19:07 AM
"Honey Smith has been reading GRS since at least 2008"

Ouch.  After 7 years (based on where she was starting) she should be out of debt and at least 1/3 of the way to FI, with maybe another 5 to go.

The part that gets me is that she's lauded (in the comments) for her "progress."

It's so crazy what seems normal vs. good when they just don't know a better way (the readers, not her - she has no excuse).
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Zikoris on March 03, 2015, 10:30:30 AM
I used to read GRS regularly about 3-4 years ago. It's hard to really pinpoint what changed. The closest ecplanation I can think of is that it got too... fluffy. It used to provide interesting information. Now a lot of it is kind of like journal entries for the individual writers. None of whom seem to be doing anything particularly interesting.

I like reading progress updates from people who are actually making progress, not just finding new ways to spend money. Lacking Ambition was good, though he seems to have stopped posting.
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: Kaspian on March 03, 2015, 10:45:50 AM
Ersh....  Such a trainwreck!!  She was the reason I stopped reading GRS.  (I'd only pop in if Kristin Wong tweeted that she'd written a new article there.)

Check out Honey's 2014 Year-End Goal List and tell me what's wrong with this picture:

Quote
Goal 1: Pay off $10,000 in student loan principal. Fail. ...

Goal 2: Buy a house (or move into a better rental). Achieved! ...

Goal 3: Continue to save for travel. Achieved! In addition to the bridal shower and wedding, we were able to take two other trips together in 2014. The bridal shower and wedding were paid for out of savings. The other two trips were almost entirely paid for with credit card rewards points. Not everyone agrees that we should be prioritizing travel when we still have debt. To us, travel is worth the sacrifice of a slightly longer payoff.

Goal 4: Continue to expand my freelance work. Fail. ...

Way to go on your goals, genius!  Two out of four of those involve spending hoards of money and/or creating debt and two of those are financially wise decisions.  Guess which ones you succeeded at?

http://www.getrichslowly.org/blog/2015/01/19/honey-progress-report-2014-wrap-up-and-2015-goals/ (http://www.getrichslowly.org/blog/2015/01/19/honey-progress-report-2014-wrap-up-and-2015-goals/)
Title: Re: 200k in debt, better make a goal to add more in 2013
Post by: arebelspy on March 03, 2015, 01:20:04 PM
Lacking Ambition was good, though he seems to have stopped posting.

Lacking Ambition was my favorite PF blog besides early (2011-2012) MMM.

But I like that he doesn't update so much anymore.  It makes me happy to think of Mike free, out enjoying life, too busy with FIRE to update some blog.