Hello all. First post here, so I hope this is in the right sub-forum.
I know, you read this title and likely thought I'm an idiot for incurring that much debt. I could go on and on about how I got myself into this position, but there's no more time for excuses or self pity: I'm sleeping in the bed I made, and I'm only looking forward now.
So I have $150,000 in student loan debt, mostly from law school. Despite having pretty good grades (top 30%) at the best law school in the state, I didn't have a job after passing the bar. However, I successfully obtained a grant from my school to work at a firm in my hometown. The grant only paid $2,000 to work there for three months, but since I was able to live with my mom, I made it work.
Lucky for me, this gig at a local firm turned into a full time associate position. I now make $47,500 per year and have great benefits (they pay 90% of healthcare costs, pay all my bar/CLE fees, and contribute 3% to my 401k, even if I don't match). I'm happy with the work/life balance here and can see myself being here for a long time.
But back to the elephant in the room: I have $150,000 of student loan debt. I actually just made my first huge payment towards my loans ($2,200) and got the principal balance down to $148,500. Small chunk, I know, but it's a start.
But now I'm looking for more advice as to what I can do to get out of debt as quickly as possible. It's the first step to the road of a Mustachian and I want to get there so, so, so bad.
My monthly budget is as follows:
Income (after taxes and 401k contributions): $2,550
Rent: $225 (living with girlfriend, renting from family friend, and managing the building to get a discount)
Car: 2007 Ford Focus, paid off, keeping it until the engine explodes.
Gas: $60 (above-described discounted rent crushes any auto savings I'd make by living closer to work).
Car Insurance: $86
Groceries: $200
Utilities: $81 (includes 50% paying of DirecTV...my girlfriend and I love sports and this is our one luxury).
Cell Phone: $75 (looking into Ting when my contract expires)
Mom's Life Insurance: $40 (mom has $450,000 whole life policy and each of us three kids pays $40/month to keep it current).
Social: $50-75 (probably 1/3 of what my friend's spend)
At the end of all this, I'm left with about $1,617 to do whatever. That's almost my ten year fixed payment, but...
I'd like to throw all of this towards my debt, but (a) I'm saving for an engagement ring/wedding, and (b) my GF is desperate to buy a house. She's been living in this small one bedroom loft for three years before I moved in. Things are tight and this is non-negotiable for her: she wants a house and she's going to save for the down payment no matter what I tell her.
Furthermore, and I think critically, she is going to help me pay off my loans when she is done paying off hers (she makes $67,500 and has about $35,000 left in student loans). In short, once she's done with her loans (3-4 years), I'm confident she'll be able to help me get out of my hole pretty quickly. And because of that, I feel obligated to help her save for a modest house.
Which leads me to my ultimate question regarding that $1617 at the end of each month. Right now my plan is as follows.
Save $100 for an engagement ring/wedding.
Save $400 for down payment on a house (she is matching).
Put the rest ($1,200 or so) towards student loans.
In the meantime, I'm also torn about maximizing income. Should I pour my heart and soul into law and hope that gets rewarded, or should I be cutting grass on the weekends and throwing that towards my loans?
Also, is my desire for balance between saving for a house and getting out of debt misguided? I can't tell whether I've rationalized this as an investment in my relationship with my girlfriend (giving her the happiness of buying a home and in return getting her to help me pay off my loans) or simply a bad choice, so I'd love to hear people's responses, no matter how harsh.
Any thoughts or comments on our plans? Is my compromise towards my debt okay? Any and all comments appreciated, no matter how harsh.
Thanks.