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Author: eachna Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308642  
Subject: Re: CC+Student Loans=$150K: Help! Date: 5/24/2001 6:17 AM
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I'm trying to save just a little ($100 or so a month), which I know all the wisdom says not to do until you pay off your debt, but considering I'm now in high tech, I think it important to have a little bit of cushion (I don't want to be one paycheck from the streets like I was when working for the state).

This is good. You're accumulating about $1200 a year, assuming you manage this rate for at least a year :). That's nothing to sneeze at.

And, alot of Fools recommend saving "something" each month, for a number of reasons.

That doesn't leave me much for food and other expenses that may pop up, plus entertainment. I'm currently looking for ways to cut my expenses, and I know the biggest place is eating out lunches. This is tough, because usually a group from my company goes out every day, and it's often frowned upon if you bow out too many times. But this is a place I can save.

Peer pressure at the workplace can be rough, but, bite the bullet, bag your lunches, and start saving. It makes *such* a difference. You could try being honest and mentioning you have a big load of student debt. If you're working for a startup company, you're *presumably* working with other college-educated folks who are carrying student loans of their own. Present the situation lightly and jokingly enough, and there's a good chance no one would sneer at you for it.

Realistically, I cannot cut out my bi-monthly trips to Half Price Books or the occasional movie or video. These are it for entertainment.

Oh, but, you can :). Libraries are a wonderful thing. If you absolutely *must* buy books, do you also feel you must *keep* them? Between web options and local second-hand bookstores, there are many ways to turn the books you've already read into cash. Do you pay for cable access? If so -- why are you renting movies, also? If you would prefer to control exactly which movies you see in a month, but, you're paying for cable, then, cancel the extra packages.

Give yourself an "allowance" for luxuries/entertainment expenses, and be both realistic and stingy with it. If you want to eat out two or three times a week, then, don't be buying books and renting movies during the same timeframe.

Prioritize. What part(s) of your life, if you gave them up, would feel like "life isn't worth living". I don't mean in a suicidal way -- I mean, what entertainment do you have in your life as a basic necessity of your individual personality. Budget just enough money to cover that in a miserly way.

As a single woman of 38, I would love to think that someday I could afford to go on a real vacation, or even buy a house. That is my dream. I don't need anything big or fancy, but I'd love just to have something of my own. I just don't see it ever happening because of my debt load.

Keep setting aside that $100/month. That's your "someday" money. Yes, if you lose your job, you'll have to tap into it, but, if all goes well, then, you won't. Keep paying down your credit debt and student loans. When you get extra money from the pet-sitting, mail it off in an extra payment to whatever debt you're chiselling away at first.

Lower your expectations. Everyone *wants* to be able to impulse buy, have a new house and car, set aside a generous "nest egg" and retirement fund, *and* remain 'debt-free'. As American society shows, that doesn't work. From your initial post, you didn't sound like you're in any sort of crisis situation, and the student loans are the most significant part of your debt. Pay off the credit cards, and then snowball those extra payments into the student loans. Look for ways to reduce your expenses. Send those savings on to the student loan people.

Run some amortization calculations, and make some plans for the future. Figure out how much it would cost to pay everything off at the rate you're presently going. Then, make goals to slowly speed that rate up, by finding ways to Live Below Your Means. As you make progress, hopfully you'll find the strength and motivation to trim corners more and more, until you're digging yourself out at a rate you're comfortable with. Most importantly, stay here :). Post your successes (and your failures). This little community is a great way to keep yourself motivated :).

Gwen
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