Wednesday, July 6, 2011

Don't Worry, Next Week What Keeps Me Up All Night Will Be Totally Different!

As is typical when I'm supposed to be 100% focused on the task at hand, my mind keeps wandering ahead to the next thing, to after the bar exam.  The topic I am currently torturing myself with is money, namely what to do about the inevitable mountains of debt one racks up when one attends two private schools in expensive cities to get one's complete education.  This has been looming over my head for years now, but the time is finally here to deal with it, those grace period/deferment deadline dates are firmly imprinted on my brain.  Why, yes, I could have stayed down south and gone to a public law school and paid in-state tuition of only $10,000 a year, borrowing less for all three years than I did for just one year to go where I did, but what fun would that have been?  What fun, indeed.

I don't regret going where I did.  I got an amazing education, and got to do it where I really want to be.  The south is where I was raised, but the northeast is home.  I can't help it. 

So, after four years of college, a two year hiatus as a legal assistant to confirm law school was meant to be, and three years of law school, I have loads of student loans and credit card debt to contend with.  My parents have generously and graciously insisted on paying off the undergrad debt, but I still plan to take over everything else they have been helping me with for the last several years - really just my car and car insurance.

What I keep turning over and over in my mind is how to prioritize all my competing financial goals, which are, in no particular order:
1) pay off credit card debt
2) pay off student loans
3) fully fund a retirement account
4) put money in savings for an emergency fund/long-term goals
5) save money for down payment on house/wedding/babies, which are hopefully not too far away

To assist me in tackling all this, I have made a financial investment in this book:

I am all of those things! 

I have found it to be very helpful, because it is specifically tailored to my situation - a young person just out of school with credit card and student loan debt - and helps you figure out how to prioritize and plan short-term and long-term.  I also appreciate that the book is practical about what is possible and realistic for this time in a young person's life right now and what is not. 

Inspired, this past weekend, I made an accounting of the balance due on each credit card (I feel I should note, I have not used my credit cards in years, but am still paying them down), the balance due on each student loan, noted all the interest rates, and made spreadsheets so I know exactly what's what.

Any debt Joe had from credit cards and/or student loans is 95% paid off, because he hardly had any because he is way smarter than me, so we are going to focus on my issues for now.  He is currently paying all of the rent and household expenses while I study for the bar.  He also just got a promotion at work, with another expected in about 5 months.  Which means, if we hold off on upgrading and overhauling our lifestyle for a while, which is fine by me, we should be good living off his income, which lets me put the vast majority of my income towards debt and/or into savings, after I pay my half of the rent.

That's what I've come up with so far.  I still have to do some research about consolidating the loans and figure out that whole scary business and I am still grabbing my cell phone in the middle of the night so I can use the calculator to figure out just how long this will take me, but my mind is resting somewhat easier knowing there's a tentative plan that won't take too terribly long to fully execute.

I know many of you have been there/are there, so if you have any tips or advice, please do share.