Work hard now- play hard later?

posted 3 years ago in Wellness
Post # 2
Member
9995 posts
Buzzing Beekeeper
  • Wedding: August 2016

Living with my parents or my in-laws is a hard no except in the absolute most desperate of circumstances. 

I guess I more agree with your mom’s mindset – be financially responsible but don’t put so much focus on paying off debt that you never have any fun or live your life. If you can live on your own and get all your bills paid that’s what I would do over living with your in-laws, even if that means taking longer to buy a house and pay off your student loans. That living situation just sounds miserable to me and you may be underestimating how much it could damage your mental well-being and your marriage. Especially, since your fiance isn’t 100% on board I don’t think it’s a good idea.

Post # 3
Member
1362 posts
Bumble bee
  • Wedding: August 2018 - Banquet Hall/Conference Center

Ive been told that The first two years of your marriage are the most important for building a foundation and for living a little before you get into a daily grind of house and kids. While you will save money, consider that you will not get these years back ever again. 

Post # 4
Member
798 posts
Busy bee

View original reply
mingogo4 :  I would say that you find a balance somewhere in the middle. I’m a huge fan of Dave Ramsey and am extremely debt adverse but I don’t think that living situation sounds healthy. I think you two could find your own place, somewhere super cheap and small that’s yours and live there while paying off debt. I don’t believe in carrying loans a long time, because for me it would be extremely stressful, but I know that’s not the way everyone feels. While I’m a huge Ramsey fan I also don’t follow all of his rules. My husband and I still use credit cards (although they’re paid off weekly) and even when we had debt to pay off we built “luxuries” like eating out into our budget. Get on a budget and figure out what works for you two, what your long term goals are, and how you want to accomplish them. 

Post # 5
Member
595 posts
Busy bee
  • Wedding: January 2018

I’ve been advised that student loans are actually the best type of ‘debt’ to have, and as long as you stay on them they will help you build your credit. Are yours public or private? I would be in a hurry to pay off the private ones but the public ones… I have a similar debt and I’m not freaking out about it.

My dad is still paying his student loans from medical school. He has a beautiful house, has travelled the world, has been able to give his family everything they needed and more. He’s never let that student debt hold him down, and he’s advised me to do the same.

The sooner you pay off your loans the less you’ll pay in the long term. But you’re giving up lots inbetween. It’s a classic case of quality vs quantity.

I’d say listen to your mom.

Post # 6
Member
367 posts
Helper bee
  • Wedding: January 2017

I think a balance would be great- but you can enjoy life and have fun without going too crazy, too? I think maybe in your position I would give ourselves a shorter timeline with the in laws and see how much you can put away to save (I’m assuming for a house or something big? Wedding?). So yeah, for a year or so I’d be really frugal… I guess after that you will be used to being frugal, so you can start to live a little more while still saving- and maybe moving out.

I was in a similar position to you when I started full time work after uni- I couldn’t believe how many people were living paycheck to paycheck when it was the most money I had ever earnt in a week (totally deserving compared to my casual work though). I basically kept living like I was at uni, with lots of money getting saved up. This meant that I could buy a house a couple of years later on my own with a decent deposit.

So yeah… my advice would be your FH’s advice for a short period of time (6 months- a year), then your mums advice 🙂

Post # 8
Member
204 posts
Helper bee
  • Wedding: July 2015

My advice is to put as much towards your loans as possible before buying a home. Owning a house is great- but it’s never ending. Taxes, insurance, heating/cooling, and something always needs to be maintained 🙂 I would try to limit my time at your in-laws for 1 year- that way you get a big dent paid out of your loans. Then you can save for a down payment/wedding. It isn’t fun, but you will be so happy to not have such a high loan payment every month. Good luck!

Post # 9
Member
940 posts
Busy bee

You can’t let loans consume your life. We have $400,000+ in them, and while the $3,500 we pay a month is extremely inconvenient, we still have plenty of fun, still save money, and have a 10-year plan to handle our debt. 

Even with these huge payments, virtually nothing but mortal peril would ever make me move in with my parents or his. Saving money isn’t worth that, especially in the first year of marriage. 

Post # 11
Member
970 posts
Busy bee

My Fiance and you are in a very similar situation to you except we owe even more money. $260k combined. Yikes. We sat down together and did out a monthly budget for what our lives will really look like based on repaying he loans asap or taking extended repayment. From there we were able to make a much more informed decision about the pros and cons of each option. 

It’s so easy to get caught up in the emotion of it all. You really need to look at cold hard numbers to know what is and isn’t possible for you. If you need help, a financial advisor can help you with a budget and figuring out your payoff options.

What we found from doing our budget is that it will be an extreme hardship to pay off the loans 10 years, and I’m really not willing to live like broke college kids until I’m 35. It leaves absolutely no money for saving for a wedding, house, kids, etc. Its just not worth it to me, and I feel like it’ll make me feel unfulfilled to give up so much from the “best years of my life”. I’ve worked my butt off for the last 7 years and I’m ready for a little return on my investment here.

We also looked at extended repayment and the total added interest is pretty hard to swallow at almost $100k.

We chose somewhere in the middle. We decide these first two years we’re going to work as hard as we possibly can and pay down our highest interest loans. That will knock down the total added interest pretty substantially. We’re moving into a crappy studio and furnishing it off Craigslist, which is a huge sacrifice for us (but way more tolerable than living with inlaws). We set a strict budget for going out to eat and other non-essential items as well. Buckling down for those two years won’t be fun, but it seems so much more manageable than 10.

Our “light at the end of the tunnel” is the $4,000 we are going to set aside during this time for an intimate wedding and staycation style honeymoon. 

Overall, doing it this way will knock our repayment down to 15 years, more than enough time to start saving for retirement and buy a house, but will enable us to have a more acceptable standard of living in the meantime. 

Post # 12
Member
2000 posts
Buzzing bee

In my opinion, paying down the loan debt before taking on additional expenses (like a house or wedding) is the financially responsible choice to make. I wouldn’t love living with my inlaws, but I would make a short term plan to save a significant amount of money and rapidly decrease your student loans. Then I’d save for a house, at which point your loan payments can be refi’d to be lower and more manageable while you are paying for a house. 

Owning a home is so much more expensive than rent because of the matienenceand upkeep. When you own, you’ll always be putting money and time into your house to take good care of it. There is literally ALWAYS something on my list to purchase for my house to keep maintaining and improving it. It’s way more than just the actual mortgage payment.,

it wouldn’t be fun or amazing, but I would keep the motto ‘short term pain, long term pleasure’ running through my head. Paying off more debt up front allows you to more cash flow later on for a house, vacations, kids, cars, investments, etc. Play around with loan calculators online, and look at what the long term cost savings would be if you diligently worked and saved to pay them down for 1 year. I think keeping that number in mind would help keep you motivated during the first year with your inlaws. 

 

Post # 13
Member
970 posts
Busy bee

I would also prioritize paying down loans over owning a home. You are “throwing away money on rent”, but it’s probably not as much money as you’d be throwing away on interest for the loans. Again, doing a budget will tell you exactly where the break even point is as far as when the right time is to buy a home.

Plus renting is more stable because you never have surprise home repairs and you can relocate for work if need be. 

Post # 14
Member
367 posts
Helper bee
  • Wedding: January 2017

View original reply
mingogo4 :  I haven’t read other people’s replies, and this might be different where you are (I’m in Melb, Aus), but I went to a mortgage broker when I was starting to think about buying a house. Not when I was ready, but when I started to consider it. It was good to put all of the numbers in and be realistic about what debt to get rid of (car loan for me) and what debt I could still have (HECS- which was like a student loans thing, but repayments come out as a tax, and the numbers are smaller than in the US). The broker was free, and he helped me prioritise and then I got my house a year or so later.

I think talking to someone, anyone, who will use your real numbers and calculate actual expenses for you is best. And honestly, as long as you are repaying SOMETHING, that’s better than nothing 🙂

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