How fast can you REALLY pay your loans? Forum

[09042014]

I'm sure the people at my firm who like to go out and drink are spending 2k on food drink and entertainment.

[Anonymous User]

Darien Rowayton is some random bank in Connecticut that's even cheaper than SoFi.

This is my hometown bank. That's hilarious

[Anonymous User]

I work in a secondary market of a V50 firm. I graduated in 2010, clerked for a year, and began at my firm in December 2011. I was on IBR while clerking and did not begin to make principal payments until January 2012. My balance started at $180+ and I'm down to $70ish. I look to finish it off by next this time next year. So I will be done in approximately 3.5 years. I pay $3 a month, but when I build up any kind of cash, I would dump it into my loans. I have made at least 4 paymernts of $15k.

[FSK]

You are taking this a lot more literally than I meant it. Even if your spending isn't 3k, it'll be awfully close to 2k unless you are living frugally. Even then it's probably at least 1200.

Either way 5k is a pipe dream.

Currently living in DC, significant other is a lifelong resident. You're spending estimates are dead on.

[jaesonko]

Guys what about this dood

http://www.huffingtonpost.com/2012/05/1 ... 22534.html

[hdunlop]

yeah what a loser, let's spend more at bars then whine about debt

[bertrussell]

You are taking this a lot more literally than I meant it. Even if your spending isn't 3k, it'll be awfully close to 2k unless you are living frugally. Even then it's probably at least 1200.

Either way 5k is a pipe dream.

Currently living in DC, significant other is a lifelong resident. You're spending estimates are dead on.

You do realize this just means you spend a lot and has nothing to do with the veracity of DF's proposed budget, right?

[masterbrowski]

It's pretty easy to spend 2k a month on food and booze. Go out drinking one night every week, and buy 1-2 bottles of wine ($100), go out to a nice dinner one night every week with your girlfriend ($100). Get take out for dinner twice a week ($80). Get lunch out 4 times a week ($50). Buy groceries once a week ($200). That's $530/week, or about $2100/month.

Now, throw in random shit like flying places for weddings and vacations, christmas presents, birthdays, pet care, going to concerts, going to the movies, buying that (playstation 4, tv, sofa, suit, pair of shoes) you want, etc... You may very well end up at another $1000/month.

If you live somewhere where you have to drive to work, you can toss in another $400/month in car payments, insurance, maintenance, and gas.

Then, throw in $1600/month in rent and $400/month in bills and utilities. In this scenario, you're spending $5500/month, and could afford to toss about $1200 into your loans and $1200 into building a rainy day fund.

This lifestyle is certainly not frugal ... but it's not that out of the ordinary, especially if you are living in an expensive city and in a relationship..

[Old Gregg]

Go out drinking one night every week, and buy 1-2 bottles of wine ($100), go out to a nice dinner one night every week with your girlfriend ($100). Get take out for dinner twice a week ($80). Get lunch out 4 times a week ($50). Buy groceries once a week ($200). That's $530/week, or about $2100/month.

This is the second post like this I've seen in this thread that smacks of dumb. You spend $100 per week on dinner with your girlfriend? Who the fuck are you dating?

You get take out for dinner twice a week... at $80!?

Groceries cost $200 a week!?!

$400/month in bills and utilities.

Fuck... are you getting gold water? I live in one of the highest COL cities in America, and my bills and utilities are around $130 a month:

$40 on Cable
$55 on Internet
$30 on Utilities
Cell Phone: Covered by firm.

I'm fine with $10 bottles of wine (and really, can you tell the difference? Even the best can't...)

My girlfriend doesn't demand one "nice" dinner a week, because she realizes that that's stupid.

I don't go "out" twice a week in addition to that "nice" dinner, mostly because in BIGLAW it's kind of hard to do three nights of "going out" the way you're talking about. But even if I did, I would't go somewhere where dinner costs me $40 fucking dollars and I usually can't finish the gargantuan platters so I have leftovers for lunch the next day (so split the meal cost in two). I spend $40 a week at whole foods, and that's enough for me to make lunch and dinner for most of the week.

[Anonymous User]

I work in a secondary market of a V50 firm. I graduated in 2010, clerked for a year, and began at my firm in December 2011. I was on IBR while clerking and did not begin to make principal payments until January 2012. My balance started at $180+ and I'm down to $70ish. I look to finish it off by next this time next year. So I will be done in approximately 3.5 years. I pay $3 a month, but when I build up any kind of cash, I would dump it into my loans. I have made at least 4 paymernts of $15k.

Is going on IBR or temporarily extending the term of the loan typical for clerking? Is it easy to show "financial hardship"? And for those with knowledge of refinancing, is there a similar option for SoFi? I'm going biglaw -> clerkship -> biglaw. Loan payments are painful enough on a biglaw salary after NYC taxes, but in my clerkship year I'll be looking at 1600/mo. take-home after taxes and my loan payment and I'm a little worried. Thought I might apply for a second clerkship but not sure I can live like a pauper for two years...

[hous]

It's pretty easy to spend 2k a month on food and booze. Go out drinking one night every week, and buy 1-2 bottles of wine ($100), go out to a nice dinner one night every week with your girlfriend ($100). Get take out for dinner twice a week ($80). Get lunch out 4 times a week ($50). Buy groceries once a week ($200). That's $530/week, or about $2100/month.

Now, throw in random shit like flying places for weddings and vacations, christmas presents, birthdays, pet care, going to concerts, going to the movies, buying that (playstation 4, tv, sofa, suit, pair of shoes) you want, etc... You may very well end up at another $1000/month.

If you live somewhere where you have to drive to work, you can toss in another $400/month in car payments, insurance, maintenance, and gas.

Then, throw in $1600/month in rent and $400/month in bills and utilities. In this scenario, you're spending $5500/month, and could afford to toss about $1200 into your loans and $1200 into building a rainy day fund.

This lifestyle is certainly not frugal ... but it's not that out of the ordinary, especially if you are living in an expensive city and in a relationship..

It seems nuts to me that its acceptable to put 1.2k toward a persons 200k in student loans when they are making 160k a year. I wouldn't settle for putting in less than 40k from the get-go.

[Anonymous User]

Go out drinking one night every week, and buy 1-2 bottles of wine ($100), go out to a nice dinner one night every week with your girlfriend ($100). Get take out for dinner twice a week ($80). Get lunch out 4 times a week ($50). Buy groceries once a week ($200). That's $530/week, or about $2100/month.

This is the second post like this I've seen in this thread that smacks of dumb. You spend $100 per week on dinner with your girlfriend? Who the fuck are you dating?

You get take out for dinner twice a week... at $80!?

Groceries cost $200 a week!?!

$400/month in bills and utilities.

Fuck... are you getting gold water? I live in one of the highest COL cities in America, and my bills and utilities are around $130 a month:

$40 on Cable
$55 on Internet
$30 on Utilities
Cell Phone: Covered by firm.

I'm fine with $10 bottles of wine (and really, can you tell the difference? Even the best can't...)

My girlfriend doesn't demand one "nice" dinner a week, because she realizes that that's stupid.

I don't go "out" twice a week in addition to that "nice" dinner, mostly because in BIGLAW it's kind of hard to do three nights of "going out" the way you're talking about. But even if I did, I would't go somewhere where dinner costs me $40 fucking dollars and I usually can't finish the gargantuan platters so I have leftovers for lunch the next day (so split the meal cost in two). I spend $40 a week at whole foods, and that's enough for me to make lunch and dinner for most of the week.

I'm with you on most everything but I also completely understand where he's getting his numbers from. Not everyone has our lifestyle. I personally grew up dirt poor so I have always been afraid of debt and conscience of my spending habbits. However, its entirely reasonable for a 25 year old to spend $50 per person once a week on a dates dinner. Personally, I wouldn't recommend those restaurants, I try to stay under $40 for two as much as possible. Plus I would be going dutch if it was just a GF. If it was more than just a GF we would be cooking in more often (which is what I do). But for many, what he says is completely reasonable.

The wine is too if he insists on drinking wine and is in an early dating / bachelor phase of life. They upcharge wine and $50 bottles is probably hard to come across in most bars anyways. Personally, I would go dutch again with a date and wouldn't buy a bottle if it was my fiancé and I because neither of us prefers wines and we are social drinkers. We would just grab a beer or cocktail with a group of friends ($20 each tops).

Utilities seems high, but it could be the area. Also, I don't think you factored in the most expensive utility, electricity in your calculations.

His groceries seems high but maybe hes buying all organic or something. Again, different lifestyles.

[hdunlop]

We eat mostly organic and spend $450 a month on groceries for two. Look, I could spend $2K a month or 20K a month but the idea that you somehow have to in order to get take-out twice a week is insane. How the fuck do you spend $40 per person on take-out? What the fuck are you taking out, two lobsters?

[09042014]

This thread isn't about /r/frugal people with debt, it's about an average person.

For a person who "But, I do like to go out and drink"? That just isn't cheap in DC (or really anywhere). 3k might be high but 2k is pretty reasonable. That's still only 3.8k a month.

[Hipster but Athletic]

Real talk: what do normal retirement accounts earn? Do parents ever effectively refinance your loans?

[masterbrowski]

I should first note these numbers aren't all mine. I'm more frugal than the budget I laid out. Just trying to show you how expenses could easily add up to what df was talking about. It seems like none of you are going out and doing the stuff that at least some of your peers are likely doing. That's fine! More power to you for living on a shoestring.

For takeout: I meant takeout/delivery for two people twice a week, which adds up to about $80 total. $20 per person, per dinner.

Utilities at 400 would be a little high now I think about it. You would probably pay $80 for cellphone, $140 for cable and internet, $80 for water and power. So revise that down to $300/month.

$100 was intended to cover dinner out and a couple of bottles of wine that you'd drink in your own home. That's 2 bottles of wine at 10 bucks a pop, and dinner for two at $80 total. It's very easy to spend $40 per person at dinner, esp if you get drinks

I also see a strong argument for not putting all your spare cash into loans. I like 60/40 between debt and savings. I could easily just throw $3300/month into debt alone, but that feels short sighted to me. I want to have a rainy day fund in case the worst happens. It doesn't matter if you paid $40000 out of your $120000 loans, if you get laid off after year one, you are still jobless with $80000 in debt and no savings.

If you are maxing out your firms 401k or alternatively saving about %20 of your post tax earnings, you'll probably find it very hard to put another $3200/month into debt. 3200 debt payment + 1600 savings takes 4800 out of your $7800/month salary. I can see someone living on $3000 a month after tax in an expensive city... But it's a pretty damn frugal lifestyle, when you know you're making $160k a year. It's possible.. I just doubt most would do it.

[Elston Gunn]

I work in a secondary market of a V50 firm. I graduated in 2010, clerked for a year, and began at my firm in December 2011. I was on IBR while clerking and did not begin to make principal payments until January 2012. My balance started at $180+ and I'm down to $70ish. I look to finish it off by next this time next year. So I will be done in approximately 3.5 years. I pay $3 a month, but when I build up any kind of cash, I would dump it into my loans. I have made at least 4 paymernts of $15k.

Is going on IBR or temporarily extending the term of the loan typical for clerking? Is it easy to show "financial hardship"? And for those with knowledge of refinancing, is there a similar option for SoFi? I'm going biglaw -> clerkship -> biglaw. Loan payments are painful enough on a biglaw salary after NYC taxes, but in my clerkship year I'll be looking at 1600/mo. take-home after taxes and my loan payment and I'm a little worried. Thought I might apply for a second clerkship but not sure I can live like a pauper for two years...

If you're not eligible for PAYE, I'm not sure (don't know details of IBR eligibility), but literally anyone can go on PAYE. The "financial hardship" is, as I understand it, just what determines whether or not interest above 10% of the principal capitalizes. Either way, a clerk with $150K+ of debt will easily qualify for financial hardship. Haven't heard of anything similar for SoFi.

[Anonymous User]

I work in a secondary market of a V50 firm. I graduated in 2010, clerked for a year, and began at my firm in December 2011. I was on IBR while clerking and did not begin to make principal payments until January 2012. My balance started at $180+ and I'm down to $70ish. I look to finish it off by next this time next year. So I will be done in approximately 3.5 years. I pay $3 a month, but when I build up any kind of cash, I would dump it into my loans. I have made at least 4 paymernts of $15k.

Is going on IBR or temporarily extending the term of the loan typical for clerking? Is it easy to show "financial hardship"? And for those with knowledge of refinancing, is there a similar option for SoFi? I'm going biglaw -> clerkship -> biglaw. Loan payments are painful enough on a biglaw salary after NYC taxes, but in my clerkship year I'll be looking at 1600/mo. take-home after taxes and my loan payment and I'm a little worried. Thought I might apply for a second clerkship but not sure I can live like a pauper for two years...

I got my clerkship right out of law school, so I automatically enrolled in IBR and remained on IBR even when I was at my firm (I just paid more than the IBR requirement). I refinanced through SoFi last year at low 3% variable and my understanding is that they do offer hardship, etc. Of course I have never used the hardship option, so I can't speak much about it. I don't know much about PAYE either since by the time it came out, I was invested in paying off my loans as quickly as I could.

Working in a secondary market is key for me. I make a tiny bit less than I would otherwise at a major market, but my cost of living is much, much lower. I would encourage people to look into working for big law in a smaller market. Your quality of life is just much better.

[NYSprague]

I work in a secondary market of a V50 firm. I graduated in 2010, clerked for a year, and began at my firm in December 2011. I was on IBR while clerking and did not begin to make principal payments until January 2012. My balance started at $180+ and I'm down to $70ish. I look to finish it off by next this time next year. So I will be done in approximately 3.5 years. I pay $3 a month, but when I build up any kind of cash, I would dump it into my loans. I have made at least 4 paymernts of $15k.

Is going on IBR or temporarily extending the term of the loan typical for clerking? Is it easy to show "financial hardship"? And for those with knowledge of refinancing, is there a similar option for SoFi? I'm going biglaw -> clerkship -> biglaw. Loan payments are painful enough on a biglaw salary after NYC taxes, but in my clerkship year I'll be looking at 1600/mo. take-home after taxes and my loan payment and I'm a little worried. Thought I might apply for a second clerkship but not sure I can live like a pauper for two years...

If you're not eligible for PAYE, I'm not sure (don't know details of IBR eligibility), but literally anyone can go on PAYE. The "financial hardship" is, as I understand it, just what determines whether or not interest above 10% of the principal capitalizes. Either way, a clerk with $150K+ of debt will easily qualify for financial hardship. Haven't heard of anything similar for SoFi.

PAYE has restrictions. You have to be a new borrower after 2007 and have loan disbursement on or after October 1,2011.

[Elston Gunn]

I work in a secondary market of a V50 firm. I graduated in 2010, clerked for a year, and began at my firm in December 2011. I was on IBR while clerking and did not begin to make principal payments until January 2012. My balance started at $180+ and I'm down to $70ish. I look to finish it off by next this time next year. So I will be done in approximately 3.5 years. I pay $3 a month, but when I build up any kind of cash, I would dump it into my loans. I have made at least 4 paymernts of $15k.

Is going on IBR or temporarily extending the term of the loan typical for clerking? Is it easy to show "financial hardship"? And for those with knowledge of refinancing, is there a similar option for SoFi? I'm going biglaw -> clerkship -> biglaw. Loan payments are painful enough on a biglaw salary after NYC taxes, but in my clerkship year I'll be looking at 1600/mo. take-home after taxes and my loan payment and I'm a little worried. Thought I might apply for a second clerkship but not sure I can live like a pauper for two years...

If you're not eligible for PAYE, I'm not sure (don't know details of IBR eligibility), but literally anyone can go on PAYE. The "financial hardship" is, as I understand it, just what determines whether or not interest above 10% of the principal capitalizes. Either way, a clerk with $150K+ of debt will easily qualify for financial hardship. Haven't heard of anything similar for SoFi.

PAYE has restrictions. You have to be a new borrower after 2007 and have loan disbursement on or after October 1,2011.

Yes, that's what I mean by I wasn't sure if he was "eligible." I wasn't clear--what I was saying is that if you meet those two eligibility requirements, you can always do PAYE regardless of salary or debt.

[SemperLegal]

Real talk: what do normal retirement accounts earn? Do parents ever effectively refinance your loans?

Everyone is an expert and says low double digits, but I wouldn't expect more than 8% after fees.

I am curious about the second question. I have no debt, but my SO does. I was wondering if there was a way I could get a lower rate if I co sign. I'm guessing it doesn't go any lower than 3%.

[Old Gregg]

I'm just wrapping my head around a girlfriend expecting you to buy her $100 dinners every week. Fuck that. If mine expected that (she doesn't and she's kind of awesome like that), it'd be splitsville yesterday. Holy shit.

You guys shouldn't just stop eating out so much for money reasons, you should also stop for health reasons. It's not good for you to eat out all the time and there's immense value in cooking your own food in the fact that you know exactly what's going in, you can size your portions really well (unless you're making rice) and it's easier to keep leftovers for the remainder of the week.

It's also just way more cost effective. $40 at whole foods is enough money for me to cook myself lunches for the week.

[Old Gregg]

Real talk: what do normal retirement accounts earn? Do parents ever effectively refinance your loans?

Everyone is an expert and says low double digits, but I wouldn't expect more than 8% after fees.

I am curious about the second question. I have no debt, but my SO does. I was wondering if there was a way I could get a lower rate if I co sign. I'm guessing it doesn't go any lower than 3%.

2.93% is the lowest (when you include auto debit), and the differential doesn't make that much of a difference.

[Old Gregg]

Honestly, I'm strongly just considering buying people's student loans and charging them stupidly low interest rates. There would be a rigorous interviewing process to ensure that I have faith that they won't default, but seems like a pretty cool way to make money, help out people and not expose them to the government's bullshit rates.

[SemperLegal]

Honestly, I'm strongly just considering buying people's student loans and charging them stupidly low interest rates. There would be a rigorous interviewing process to ensure that I have faith that they won't default, but seems like a pretty cool way to make money, help out people and not expose them to the government's bullshit rates.

I've actually thought about the same, especially since (I think) its the same protection from bankruptcy if you re-consolidate privately (though you will probably end up losing money if they are insolvent from court costs).

The only issue is that unless there is a loan servicer handling it for you, the transaction and regulation costs in time and money are probably unrealistically high.