Author Topic: Getting divorced, $208k in law school loans, need fresh eyes on this  (Read 13495 times)

RobinAZ

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Hi,

My debt is pretty outrageous and I feel very stuck in my current living situation, which is modest by most standards but not mustachian.  My son has an emotional disability and the public school he goes to here is the first place he has ever been successful at AND happy.  I just split with his stepdad, and I think moving houses would set my son back too much to be considered a viable option right now.  He has two more years at this school before he moves on to middle school, so I am thinking summer 2017 might be a good time to change houses/move to a LCOL area.  We live in Phoenix now and I work in Scottsdale.

I owe 163k on this house (4%) and it is worth $205k.  Market is rising here slowly but steadily.  When the market was stable here but NOT over-inflated, this house would have been worth about $225k.  Can't say what the market will look like in 2017, of course.  Would be nice if I could sell with enough equity to buy something super affordable for cash in an LCOL area, to offset any reduction in income I might face with a move.  I am not aware of any LCOL areas within a reasonable driving distance from my current job. 

I started practicing law in 2004 with $210k in student loans, half at 7% and the other half at 2.75%.  Got my first decent paying job in 2007 and paid down about 25k in principal plus all the interest.  That lasted two years.  Bottom dropped out here and, after 3 layoffs and IBR, I am back up to $208k with the capitalized interest.

I have one credit card with $6800 on it at 4.5% with my credit union.

I took out a loan to buy an insulin pump and continuous glucose monitor, there are 7 more payments of $109 left at 0%.

My 2000 Subaru Forester up and died and we had no cash, so I just financed a 2005 Honda CRV with 42,000 miles in mint condition (snowbird car) at $12000.  $290/mo for 48 months at 6%.

My budget is attached in pdf.  The obvious luxuries are the contracts for cell phone, DirectTV and landscaping.  I will have to look into the costs of cancelling early. 

I am a contract attorney at a firm so my income fluctuates.  I can usually count on $5k/mo.  The months I have made a few thousand more have covered the ones where I have earned under $5k.  I may be taking on more work soon, the firm started a marketing campaign that seems to be working... they think my income will go up a few thousand dollars/mo. by the fall.

I am going to approach my firm about a telecommuting option to save on the office rent and some gas.  Plus, I always get roped into "lunch meetings" that cost $$.  That would save $450.  And the pump loan will be gone in 8 months, that is $109. 

My firm doesn't offer a 401k, etc.  I have zero savings left after my two-year marriage.  I feel so stupid to be in this place but I am going to focus on the positive.

My plan of attack is to save one month of bills as a safety net; then throw all my available cash at the credit card; then, the car.  Then pull together a 6-month safety net.  After three layoffs, I need security :-)

With regard to my student loans, I am on IBR at the moment, at $24/mo.  LOL, in 27 years they will forgive the balance although at the moment, that is a taxable event.

That is really my qst-- should I ride out the IBR and save cash for retirement, or try to pay down the loans?  They seem like a huge burden but with IBR, at the moment anyway, they really aren't.  Being 44 with nothing saved for retirement is a real emergency.  So is having a genius son who is gong to college in ten years (or sooner) and no $$ for that either (pray for scholarships, peeps).

Thoughts?  Thank you.

Robin

SpendyMcSpend

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #1 on: April 10, 2015, 03:27:04 PM »
Is there a chance of getting hired as a full-time employee somewhere? Health insurance, office rent etc. are pretty high

justajane

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #2 on: April 10, 2015, 03:29:36 PM »
I'm sure you know this, but you will have those loans hanging over your head until you are in your seventies. Wow.

Any way to create an office in your house? Or do you see clients in this space?

Edited to add that I missed the telecommuting request.

Can you better clarify your work situation in general?
« Last Edit: April 10, 2015, 03:31:08 PM by justajane »

JLee

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #3 on: April 10, 2015, 03:40:39 PM »
I'm in Phoenix as well - the first two things I'd do is transfer any outstanding credit card balances to a 0% card (Chase Slate was 0% for 15 months with no balance transfer fees) and refinance the auto loan through Penfed (current rates showing 1.99%-3.49%).

Are you able to rent any rooms in your house? I have wonderful roommates and they (3 people, 2 rooms) are paying a combined total of $1100/mo.  Even if you rented out one bedroom at ~$500/mo, that would be a substantial help.

frugaldrummer

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #4 on: April 10, 2015, 04:08:02 PM »
+1 on the roommate suggestion.

Also - do you receive any child support from the child's father?

And - have you revisited your taxes to see what they will be after the divorce?  As a single head of household, that might help a bit.

Your house is reasonably priced and if your son is happy in this school district, that's invaluable - I'd hold onto the house for now and if you can, get a roommate to offset some of the expense.

I'd focus on building up a bit of a cushion first - I understand wanting to tackle the debts asap, but as a single mom with some job instability, I'd sure feel better with at least 3 mos expenses.  Perhaps save up one month first, then split 50:50 between debt repayments and increasing savings until you have 6 mos expenses saved? 

AS for retirement, once you are able to clear your current debts, I'd go after the student loans (except perhaps for an annual IRA contribution if you can do both).  Having those student loans hanging over your head forever will be a big obstacle to retiring. 

Also, focus on increasing your income at work -

frugaldrummer

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #5 on: April 10, 2015, 04:16:09 PM »
And btw, your pets are costing you $375 a month????  Are you sure there's not some way to bring this down? 

If you could cut this by half, telecommute and pay off the pump, that would free up an extra $900 a month to start throwing at savings and debt. 

Also, take a look in your garage and around the house, are there a few hundred dollars worth of stuff you could sell on ebay to help pad your immediate emergency fund?


JLee

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #6 on: April 10, 2015, 04:37:04 PM »
Also price out car insurance - I pay half of what you do for a newer facepunchy 'luxury' vehicle.
« Last Edit: April 10, 2015, 04:51:09 PM by JLee »

RobinAZ

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #7 on: April 10, 2015, 05:08:04 PM »
Thank you for such quick replies!  The idea of 3 months in savings really would make me feel much safer.

Once my ex moves his things out, a roommate is a definite possibility.  I might also invest in an old RV that I can park and hookup in my backyard, and rent that out (or even rent out the whole house/share the yard and stay in the RV myself).  Seriously.  I am fine with either.    Have to consider if that will be too stressful for my son.

I talked to my ex and he is taking one of the dogs so, it will be $110 for the vet plans for three pets, $75 for food and $75 for meds/bloodwork (one dog gets $600 in bloodwork/year and his meds are $25/mo.  I know, I know.  But he is family now so...).  $10/litter.  So, $270/mo.  GD, they cost as much as my car.

Called the CPA re: my taxes.  Bad news, I owe $4200 for 2014.  Good news, he told me to set aside $500/mo for taxes next year, not $1000.  So that $500/mo difference can go to the payment plan to the IRS.  Being head of household will help for next year.

I got laid off in Dec 2010, March 2013 and July 2013.  All from large firms that paid me over $100k/year plus benefits and bonuses for full time work.  I am done with AZ "Big Law."  I joined a small firm on a contract basis and am building my own book of business.  I went from no clients to $50k/year after 12 months, working 2 hours a day while I managed my son's issues.  Now that he is doing so well, I can work 4-5 hours/day and still be there before and after school.  Full time employment just isn't doable right now but if I can bill and collect 750 hours/year, I am back to that $100k range. 

I rent an office adjacent to the firm, in an executive suite business.  I can give notice at the end of April to vacate May 31.  There was a $500 refundable deposit so I can put that in savings.  I meet clients in the firm's conference rooms anyway.  I can work from home. Oh, that may be an impediment to living in the RV, lol.

I get my insurance on the exchange.  I have a Platinum plan because of the diabetes and my son's developmental pediatrician.  We save thousands a year with insurance.  Prior to the exchange, I was uninsurable.  My pump supplies are $150/mo.  Insulin was $300/mo.  Blood glucose test strips are about $1 each and I test 5-7 times/day.  My son's medications are $285 without insurance.  Plus cash-paying specialists.  We spent well over $1000/mo and that was if we never got sick, just maintenance. 

I have already sold everything that isn't nailed down :-)  Well, except the dogs and kitten. 

I will look into balance transfers and a car refi/car insurance this weekend, good ideas!

A three-month safety net would be $13k and I have nearly $25k in consumer debt (car and credit card, pump loan, taxes), then three more months safety net of $12k.  So my immediate emergency is $50k.  I can do that by summer 2017.  That is 25 months. I can do that. 

RexualChocolate

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #8 on: April 11, 2015, 10:32:10 AM »
Ride IBR out as long as you can. You'll get more taxpayer giveaways soon I'm sure and it seems unlikely you'll materially increase your income.

You need to give away the animals. 2500 a year on pets is absurd. Vet plans are a rip off. Pay as you go. Dogs should not be going to the vet more than once a year until they're old. Even then you need to make a hard life quality decision early on. Buy healthier breeds (no bulldogs, pugs, etc) in the future if that's the issue- I get plenty of health problems come from all over though.

You seem pretty content and have a good perspective, so just continue to pare down luxury expenses and you'll be out of the woods eventually. It's a marathon, not a sprint


No-stache

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #9 on: April 12, 2015, 02:18:23 PM »
For some people, getting rid of their pet isn't an option. I would never get rid of my cat unless I could no longer provide for her and I knew she was going to someone who could indefinitely. I've had my cat since she was 6 weeks old and she's now 8.5 years old. We've been through so much together. I would sacrifice for her to have food and medicine.
« Last Edit: April 12, 2015, 03:46:18 PM by meredith1629 »

WildHare

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #10 on: April 12, 2015, 06:50:16 PM »
I don't agree with getting rid of the pets.  Her child has emotional issues and there is already disruption in the child's world.  If she can find a way to cut the monthly costs, that might be worth it.  Wondering if getting the dog certified as a therapy dog could result in some discounts? 

Sid Hoffman

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #11 on: April 13, 2015, 03:39:31 PM »
First off, I feel for you as I am around 1 year from when my marriage ended.  I am still paying off a loan I had taken out due to the divorce although beyond that I have no other special expenses.  It still stresses me out all the time, so I can only imagine how much harder it has been on you having additional loans.

I'll target some areas that haven't been discussed much in this thread:

verizon: $90
internet: $54
direcTV: $42
disability ins: $65
Life ins: $99??
Water: $125?
Landscaping: $75
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Total: $550

Verizon: $90 - Do you have additional family you could group together to get on a family plan?  I am using T-Mobile with 4 other family members of mine and although it's a little weird at times collecting money from my family members, the bottom line is I'm only paying $23/month for service.  That's with at least two of us on the account having thousands of minutes & texts a month due to using the phones for stuff that overlaps with work.  Even if you can't get down to $23/month, chances are you can find service for less than $90.

internet: $54 - Regardless if this is Cox or Centurylink, you can call and get a better rate as long as the $54 isn't already a promo rate.  They might hassle you a little bit, but generally as long as you don't already have promo pricing, they will offer it to you.  If not, consider biting the bullet and switching.  I switched from Cox to Centurylink this year for the first time in a decade because Centurylink gave me service for $30/month (12 month promo rate) versus the $35 I was paying through Cox.  Never settle for paying full price for internet service.

DirecTV: $42 - Do you need this?  It was an adjustment, but I was able to get my son to accept Netflix / Youtube as an alternative to having the full TV suite.  That's up to you as a parent to make the decision, but $42 is still $42.  You can also consider how much content you can stream through Amazon or number of Redbox DVDs you can rent and still pay less than $42/month.

Disability ins: $65 - Have you shopped this around?  I'm not sure if this is a subsidized or unsubsidized rate.  I know I get the optional disability through my employer and it's heavily subsidized.  A quick internet search tells me figures anywhere from $40 to $200/month for a 40 year old.  It's possible you already have a great rate, but like anything, it could be worth shopping this around to make sure.

Life ins: $99 - Same story: I know I have $75k through my employer that I only pay something like $3/month for.  However part of the reason I have very low life insurance is because I already have money set aside for retirement which would go to my son if I died.  If you build up your retirement savings enough, you should be able to cut your life insurance spending way back.  Also term insurance is thus much cheaper than whole life.  I'm no insurance expert, but this is still almost $100/month, so it's something you might want to explore.  We've had huge threads on this forum just discussing life insurance planning alone.  In fact this forum is the reason I cut my own policy from $600k to $75k when I realized that my retirement savings was a huge part of what would get passed on to my son if I died.

Water: $125? - I'm guessing this is the cost of your overall city services bill, but it still seems high.  My current city services bill averages about $52 but that's with extremely low water usage.  Still, even when I was married and in a home with a pretty big yard and 4 zones of grass sprinklers, I still rarely went over $90/month.  Consider switching to more desert based landscaping wherever possible, or at least reducing the size of the grass portion.

Landscaping: $75 - This seems like a fair rate, as I have personally had landscape service as well as many friends and family.  However, do you think you'd be able to take care of your yard for a portion of the year?  For example, typically from October through March, if you get a cheap mower and buy your own weed spray, you can generally take care of your own yard.  Then hire a landscaper from April through September when it's hot and there's more grass & weeds.  That could be $400+ a year in savings, minus the startup cost of an old electric mower/edger, shrub shears, a leaf blower, and weed spray.

So overall your budget looks pretty tight and I wish we had better options for you, but if anything on the list above seems like it's helpful to you, that would be great.  If even half of the things I listed above help you save money, then that's at least some monthly savings you didn't have before.

JLee

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #12 on: April 13, 2015, 03:55:53 PM »
If irrigation is a factor, $125 wouldn't be too out of line.  I run $75-250 for my city services bill (usually around $90, but if I have to drain/fill my pool - thanks flooding/mud-storm, it goes way up), which is water/sewer/trash. That's water for four people and a pool, but no irrigation.  I left the irrigation system on one month and my bill went to $160. Now I have dry grass, hah. It'll become rock when I have the time.

RexualChocolate

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #13 on: April 13, 2015, 05:11:11 PM »
For some people, getting rid of their pet isn't an option. I would never get rid of my cat unless I could no longer provide for her and I knew she was going to someone who could indefinitely. I've had my cat since she was 6 weeks old and she's now 8.5 years old. We've been through so much together. I would sacrifice for her to have food and medicine.

I don't agree with getting rid of the pets.  Her child has emotional issues and there is already disruption in the child's world.  If she can find a way to cut the monthly costs, that might be worth it.  Wondering if getting the dog certified as a therapy dog could result in some discounts? 

These are value statements and have nothing to do with finance, which is what they asked for advice on.

$2500 a year on pets when your net worth is that negative with a lifelong (human) dependent on that little salary would make me have panic attacks and is not rational, no matter the emotions involved.

RobinAZ

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #14 on: April 21, 2015, 09:58:23 PM »
I have made progress with cell phone, cable and water (reducing watering). 

Also, the firm had rebranded and started a marketing campaign a little more than a month ago and my workload has already increased.  I have agreed to double my availability since my son is doing do well and I feel positive about that.  I am also co- teaching a law school class this summer: just 6 hours of the course but it is $500 and fun.

I should clarify- my son has an emotional disability that is now (after 4 years of meds and therapy) very well managed.  He is also a genius.  He won't be a life long dependent but early intervention and aggressive treatment was key.  Also, I had him on my own, with a donor.  So no child support :-).

I am taking all of your ideas to heart and wanted to thank you again. 

RobinAZ

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #15 on: May 01, 2015, 09:58:51 PM »
OMG, why did I agree to more work, lol?????  I have had a heck of a time balancing it all, although my son is getting used to the longer hours and is enjoying the Lego Engineering camp he is going to after school twice a week now.  I have to work all weekend and all day Monday, to meet some deadlines.  After that, I have several projects that have been on the back burner that just moved to the front of the list with a vengeance.  I am going to guess that the next two weeks will be crazy busy.

I have already collected $10k today (outstanding receivables + new clients).  Shooting for $16k by May 31.  With the firm's cut, I'd gross $10k- twice my usual gross.  Too soon to count my chickens but I could get used to making 6-figures again :-)

Firm insisted I keep the office space and has promised a lot more work to make it worth my while so... we will see.  But I have made progress with cell phone, internet, directtv, water... also set a grocery budget for May, and made a menu.  I think that will help a ton.  It is a mixture of cooked meals and "easy" meals with lots of leftovers for my lunch. 

Next up is locating the flood irrigation valve- my whole neighborhood has flood irrigation but the prior owners buried the valve and installed sprinklers.  I basically let the grass die after my second $400+ water bill, I just water the bushes.  But flood irrigation is super cheap. 

Thank you again for all of your comments.



Gumbo1978

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #16 on: May 02, 2015, 06:31:14 AM »
Kudos to you for working hard to make a plan in a tough situation.  Sounds like your job situation is getting better.  Hope things continue to go in the right direction.  From everything I've read, being a lawyer is tough these days (saturation of lawyers in the market) on top of high student loans. 

OneCoolCat

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #17 on: May 02, 2015, 07:20:16 AM »
OMG, why did I agree to more work, lol?????  I have had a heck of a time balancing it all, although my son is getting used to the longer hours and is enjoying the Lego Engineering camp he is going to after school twice a week now.  I have to work all weekend and all day Monday, to meet some deadlines.  After that, I have several projects that have been on the back burner that just moved to the front of the list with a vengeance.  I am going to guess that the next two weeks will be crazy busy.

I have already collected $10k today (outstanding receivables + new clients).  Shooting for $16k by May 31.  With the firm's cut, I'd gross $10k- twice my usual gross.  Too soon to count my chickens but I could get used to making 6-figures again :-)

Firm insisted I keep the office space and has promised a lot more work to make it worth my while so... we will see.  But I have made progress with cell phone, internet, directtv, water... also set a grocery budget for May, and made a menu.  I think that will help a ton.  It is a mixture of cooked meals and "easy" meals with lots of leftovers for my lunch. 

Next up is locating the flood irrigation valve- my whole neighborhood has flood irrigation but the prior owners buried the valve and installed sprinklers.  I basically let the grass die after my second $400+ water bill, I just water the bushes.  But flood irrigation is super cheap. 

Thank you again for all of your comments.

Awesome job, you are an inspiration!

Bracken_Joy

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #18 on: May 02, 2015, 08:03:42 AM »
It sounds like you are doing great. I will say, re: college though. You're not in a position to stress about not providing funding for your son to go to college. Luckily, a brilliant student who has overcome challenges is a shoe in for many scholarships. Instead of helping him by handing over money (something you can't afford and he won't get much benefit from) walk him through finding and applying to AS MANY scholarships as you can. That is what I did with my first degree. Most people pass over the $250 one time rewards, because in the face of a $10-49k year, it's a drop in the bucket. But these scholarships add up fast, have less competition, and frankly a lot of times you can use the same base essay for most of them.

Being in Scottsdale, you're pretty close to some major AZ schools. If your son is a tech sort, look into University of Advancing Technology (UAT). Very small school, but a relative went and has an amazing career with the FBI now. This would allow him to remain living at home if he/you wish, which could be a good option both for cost and for the stability during an already intense period of change.

Best of luck.

2ndTimer

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #19 on: May 02, 2015, 08:06:53 AM »
Use your time teaching the law school class to look for the right person to rent a bedroom in your house.  I rented from a woman in a similar situation when I was in grad school and it worked out O.K.

Rpesek6904

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #20 on: May 04, 2015, 06:47:19 AM »
Sounds like the work situation is getting better. Congratulations on that. I'm a solo lawyer and worked four years in a smaller 5-13 attorney firm. I also spent a very small time in "big law" and decided it wasn't for me. Building your own book of business is wise (in my opinion) because you are now in control of your earnings rather than "the partners." Control of your own destiny is very mustachian - so at least you've got that going well.

Anyway, one thing to keep in the back of your mind is to search out bigger paying cases. You haven't said exactly what your specialty is, but I assume you don't do personal injury type cases. My career and earnings took off when I started taking PI cases because your earnings are not tied to your hours. Some attorney's have a hard time imagining it, but when a client gets a 60K bill from the hospitals for a broken leg, you can collect 100k (or much more, on occasion) from the Auto Insurance companies, take a 33k fee, pay the hospital 10-20k after negotiating a reduction and put 50k in your clients pocket.  Yes, you will actually get 33k! It does happen to other lawyers in your community every day. That might take you 30 hours (sometimes less) of actual work. You will never get that type of fee on an hourly type arrangement. Anyway, if you get a case like that, don't refer it away. Call the person you would have referred it to and ask them to do it with you, split the fee and show you how to do the case so you can learn and do them on your own in the future. You are actually in a perfect position to search out this type of case because you have steady hourly work to sustain you while you wait for the PI settlement to come. Maybe you take a few cases to start and then build from there over time.

PI is just one example. I'm saying to keep an eye open for more lucrative type opportunities - whatever they might be.

Lastly, you are in Phoenix. I don't know what the legal market is like, but I know that where I am most attorneys ignore the Latino market because "they don't have money." But, in accident and injury cases (for example), the insurance companies have to pay regardless of whether my client has any money. Just a seed that maybe (if things are the same there as they are where I am) you might have a market opportunity. That is my entire client base and I clean up.

Good luck!

Hey It's Me

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #21 on: May 04, 2015, 09:28:56 PM »
A few posters have mentioned the income side of the equation. I know nothing about law, and $5K/month gross is more than I make, so I'm gonna let someone else handle that. Let's talk expenses.

First thing I like to do is split up variable and fixed expenses. Most people feel guilty about the variable spending (lattes, dining out, etc.), but it's really the fixed expenses that are the problem. Here is your spending:

Fixed:
- Mortgage:                         1119.56
- Electric:                              175.52
- Cable:                                  41.95
- Internet:                               53.50
- Water:                                125.00
- Landscaping:                         75.00
- SW Gas (heating?)                 50.00
- Netflix:                                   9.00
- Phone:                                  90.00
- Health Insurance:                400.00
- Dental Insurance:                  21.00
- Disability insurance:               64.62
- Car Insurance:                     110.00
- Vet insurance:                     125.00
- Life insurance:                       99.00
- Office Rent:                         409.00
- Pump loan:                          109.17
- Visa:                                   200.00
- Taxes*:                             1000.00
- Student loan:                         24.00
- Grooming/Food(work):          150.00
-----------------------------------------------
- Total                                   3326.15



Variable:
- Food                                     400.00
- Gas:                                     125.00
- Insulin Pump:                         26.77
---------------------------------------------
- Total:                                   551.77

First off, that doesn't add up for $5000, so there's about a grand out there unaccounted for... what is happening to that $1000?
         
Let's start with your housing expenses. While a 1100 mortgage doesn't sound bad, your actual housing costs are ~$1750 per month - nearly half of your take-home each month goes to pay for your housing alone... You need to seriously re-think whether that makes sense for you. I understand your situation with your son, but you need to start looking at ways to reduce that expense. Some things are easy:
  • The landscaping has got to go, no question.
  • electric is 16% of your mortgage - what the heck?Turn off the lights and find the phantom energy wasters (hint: this is easy, too).
  • Cable... You have internet AND Netflix; pay the early cancellation fees and get rid of that.
  • Water: can you explain why it's so high for you?

Fix those first three things and you should be saving an extra 175-200/month automatically.

Insurance... Please read the MMM article about safety being an expensive myth... You're paying $820/month right now for your various insurances. I understand some of those are "neccessary", but you're a lawyer - you're most likely not going to get disabled sitting at your desk; you're 44, unless you have major illnesses, that $99/mon is also better saved yourself, rather than handed over to an insurance company...

Phone. Read IP Daily's super guide for communications and pick yourself a plan that suits your needs. My family of 4 pays a combined $50/month on our phones, and that's with my sister's ridiculous $30/month 5GB T-Mobile plan.

Finally, let's talk about your job. I recommend the book "Your Money or Your Life" for you, because it explains how to get your true hourly wage, once you subtract work expenses from your income. Here is what your job is costing you:

Gross Salary: $5000

Cost of income:
  • Taxes*: $382.50
  • Health/Dental Insurance**: $421
  • Office Rent: $409
  • Grooming/Lunch***: $75
  • Total cost of income: $1287.50

This means your gross (not net, which is after taxes. This is pre-tax) income is actually $3,700. Really, it's less than that even since you pay for all of these things with post-tax dollars. To put this into perspective, if you were to get a job today paying $45K/year with no bonus, you would be better off than the job you currently have. You need to start applying for jobs - yesterday.

* The employer portion of payroll taxes that you would not have to pay if you took up an actual job.
** These would definitely be covered, or at least heavily subsidized by your W2 employer for the type of work you do
*** I'm assuming you would still groom yourself for any other job, but wouldn't feel obligated to go to work lunches with coworkers.

Bracken_Joy

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #22 on: May 05, 2015, 07:58:40 AM »
A few posters have mentioned the income side of the equation. I know nothing about law, and $5K/month gross is more than I make, so I'm gonna let someone else handle that. Let's talk expenses.


This was a fantastic analysis. Kudos!

SingleMomDebt

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #23 on: May 05, 2015, 08:31:16 AM »
A few posters have mentioned the income side of the equation. I know nothing about law, and $5K/month gross is more than I make, so I'm gonna let someone else handle that. Let's talk expenses.


This was a fantastic analysis. Kudos!
+1 lots of great stuff to ponder and take action on.

Hot_AZ

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #24 on: May 05, 2015, 08:40:49 AM »
Just read your journal, very inspiring/good work so far!

I'm in Arizona also (Mesa, work in Scottsdale) and my water bill is killing me too.  $147 this month and no pool, no irrigation (just a small drip system and a small area of grass that is on timed sprinklers). 

JLee

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #25 on: May 05, 2015, 08:47:39 AM »
Just read your journal, very inspiring/good work so far!

I'm in Arizona also (Mesa, work in Scottsdale) and my water bill is killing me too.  $147 this month and no pool, no irrigation (just a small drip system and a small area of grass that is on timed sprinklers).

How many people? It's got to be the drip/sprinklers - I have a pool and four people and I range from $75 to $110 or so (Phoenix).

Sibley

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #26 on: May 05, 2015, 09:58:28 AM »
Just read your journal, very inspiring/good work so far!

I'm in Arizona also (Mesa, work in Scottsdale) and my water bill is killing me too.  $147 this month and no pool, no irrigation (just a small drip system and a small area of grass that is on timed sprinklers).

How many people? It's got to be the drip/sprinklers - I have a pool and four people and I range from $75 to $110 or so (Phoenix).

You live in a desert, correct? Why are you trying to keep non-native plants alive outside?

Hot_AZ

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #27 on: May 05, 2015, 09:59:27 AM »
3 people in our household and Mesa is notorious for higher water prices.  We typically hold around $110-$120, husband did more watering this past month so i know where the 'extra" is coming from.

Thegoblinchief

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #28 on: May 05, 2015, 10:20:45 AM »
OP you hinted that you have made progress on some of the things. Perhaps post an updated budget or start a journal so folks can help you continue to optimize?

$400 in groceries can be improved, especially with a household of only 2.

Merrie

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #29 on: May 05, 2015, 10:31:59 AM »
$99 a month seems like a lot for life insurance, but granted I'm a decade younger than the OP. She is solely responsible for her son and that insurance is there for his future if she should get hit by a bus. Until she has enough savings that he would be amply provided for, she can't drop life insurance. Disability insurance, similarly, is there in case she gets hit by a bus and survives but is unable to work. In her shoes I'd look at the benefit amounts on both of those policies and see if they are adequate or if they are more (or less) than necessary, and also see if she could get a better plan elsewhere for cheaper. But rates go up as you get older so replacing a policy often is not a good idea. I wouldn't expect that to be a source of a lot of savings.

Car insurance I would get repriced, but with a car on loan you do need full coverage. Still, we had two cars and full coverage on both for less than that. It's possible that number could be lowered. How long until you can sell the financed car and get one you own outright? 

Hey It's Me

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #30 on: May 05, 2015, 07:40:51 PM »
A few posters have mentioned the income side of the equation. I know nothing about law, and $5K/month gross is more than I make, so I'm gonna let someone else handle that. Let's talk expenses.


This was a fantastic analysis. Kudos!
+1 lots of great stuff to ponder and take action on.

Aww shucks, you're making me blush :)

Best of luck OP. It seems like you're making strides in the right direction - keep it up! It get's easy to stop thinking about the expenses once your income rises, but don't fall into that trap! Continue to optimize your expenses, especially the fixed stuff which you only have to improve once and reap the benefits forever.
« Last Edit: May 05, 2015, 08:15:27 PM by moe_rants »

RobinAZ

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #31 on: May 08, 2015, 10:00:17 PM »
I worked more this week than I usually do in a month :-). The first free minute Friday night, and I am on MMM. :-)

These are great posts and I am going to read them again over the weekend.  I am super excited to make improvements!

PS. I forgot I HAD a journal.  Sad to read how happy I was about getting married- different financial philosophies really hurt the marriage.  And to re-read the stress of three layoffs. 
« Last Edit: May 08, 2015, 10:13:59 PM by RobinAZ »

Bracken_Joy

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #32 on: May 09, 2015, 06:22:13 AM »
I worked more this week than I usually do in a month :-). The first free minute Friday night, and I am on MMM. :-)

These are great posts and I am going to read them again over the weekend.  I am super excited to make improvements!

PS. I forgot I HAD a journal.  Sad to read how happy I was about getting married- different financial philosophies really hurt the marriage.  And to re-read the stress of three layoffs.

HUGS! We are excited to see you make improvements. Remember, you've got a whole message board full of cheerleaders and face punchers, depending on what you need that day. We'll gladly provide either.

frugal rph

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #33 on: May 09, 2015, 11:55:11 AM »
Are your life insurance premiums so high because you have diabetes? How much coverage are you getting for $99/month?

I also want to say you are doing a great job just making it day to day. It sounds like your career is really on the upswing.  I lived in Phoenix for several years and we had a rock yard with a few cacti. I just had to weed it once a week. I think I would stop the landscaping, quit watering except for maybe 1 or 2 favorite plants, and let everything else die.

RobinAZ

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #34 on: May 23, 2015, 10:23:35 PM »
I have a leak in the sprinkler system in the backyard!!!  Not enough that it is very noticeable, but enough that over a month it is costing me $$$$. Landscapers are fixing it ASAP.

My AC isn't cooling down the house- it the late afternoon it is hotter in here than outside.  My AC guy says AC is over 25 years old and shot, and is sucking energy. I checked the inspection report and he was right about the age.  He doesnt do installs so no reason to suspect his opinion.  BUT- there is a professional barter group I might be able to join and I can barter for the AC.  I am speaking with the broker my boss uses Tuesday! I would be thrilled to get it for "free."

As for the disability and life insurance, I have insulin-dependent diabetes so sitting at a desk all the time actually could kill me 😆😆😆

Work has been insane- I am enjoying the work AND looking forward to the $$$

I am really thankful several people suggested I pay attention to the utilities.

Rpesek6904

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #35 on: May 24, 2015, 06:45:17 AM »
Hey Robin, I suggested targeting the Latino community in your district. One big advantage to working with Latino's is the amount of bartering I do. Almost all my clients are painters, roofers, plumbers, etcera. When I bought my house, we had new tile almost everywhere, plaster ceilings repaired, entire house painted, yard work done for the first summer, a brick court yard installed (I paid materials) and more. Those were all favors I was owed for prior work where I was paid very little or nothing. I really like bartering with guys who don't have cash but have talent. I feel like Atticus Finch from the "To Kill a Mockingbird" when he had farmers bringing eggs to his house!  Anyway, just another little benefit that, long term, might come to you (Tax free!).

Daleth

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Re: Getting divorced, $208k in law school loans, need fresh eyes on this
« Reply #36 on: May 24, 2015, 07:16:50 AM »
Insurance... Please read the MMM article about safety being an expensive myth... You're paying $820/month right now for your various insurances. I understand some of those are "neccessary", but you're a lawyer - you're most likely not going to get disabled sitting at your desk

Not unless she has a stroke or heart attack while at work, no, but in addition to those possibilities, there are car accidents and myriad other ways to become disabled. Speaking as someone whose mom is severely disabled, SSDI (Social Security Disability) is very far from enough to live on, especially with a child, especially a child who has special needs. ESPECIALLY as that child's only parent!!!

So my vote, obviously, is to keep the disability insurance. Kill whatever else you can--ditch the cable, the landscaping for at least half the year (any chance your son could start to do some of it?), turn off lights and maybe get a more sophisticated thermostat so you can have more targeted/efficient air conditioning (or just be more efficient in your own use of your non-sophisticated thermostat). And get rid of the vet plans for the animals who are neither old nor sick.

But as a single parent with a young kid with special needs... DO NOT, DO NOT, DO NOT get rid of your disability insurance. That being said, I assume the reason it's so expensive is because it is the kind of insurance that will pay you if you can't do YOUR job, and not just if you can't do ANY job?