8 Questions for the Constantly Broke

I am entering into graduate school this fall, and I have accumulated major student loans (one loan each school year). I don't have to pay them back until a year after I graduate (I'm trying for a doctorate) and I will be (most likely) making great money when I finally graduate in another eight years... however, when I tried to apply for a loan to purchase my house (buying it through my mom), I was denied due to excessive student loans. Any suggestions?

bj of OR 1:27AM May 25, 2010

I work everyday--I mean that literally. Despite that, I am deeply in debt. Because I was out of work for two years prior to my current job, my credit took a major hit. Despite having paid off most of my debt, I'm still having problems. I still rent and even rent is on the high end--if I want to be in a safe area with good schools for my children--and having children of the opposite sex prevents me from getting a two-bedroom. Where I live, the cheapest rent in the better areas of the city starts at $1000 a month and that's a lot of money. I can't even get a rental place due to my credit as it is, so I'm limited to where I can go.

In six months, my finances will be back on track again. But what do I do in the meantime? It's easy to say, "Just pay your bills and live within your means," when you're earning high five-or-six figures a year. But what if you don't? There is only so much you can do. I can't buy a cash car because it requires me to have $3000 minimum on hand and I don't. I have to have a car to get to my job because it isn't on the bus line, so monthly payments it is. It will be paid for in August, so that's a plus. Then there's insurance--health, rental, life and auto--and I've shopped around for the best rates possible and got the best rates for my region for auto insurance and health insurance is expensive for a family of three with preexisting conditions and rental insurance is a must, so I can't drop that. We don't eat out, we entertain at home, I don't go out, there is no weekly or even monthly run to the hairdresser or nail salon or mall for shopping, even though my children really need new clothes. I've cut the grocery bill to semi-starvation limits; I don't eat so the children can and that has made me sick in the past month, so I eat sparingly. I had to cancel my gym membership and the YMCA membership and cut out just about every extravagance and now everyone is agitated and bored with no outlet, which led my son to hang himself and now I have to pay out of pocket for the expenses the insurance won't cover and meet a high deductible, which takes even more out of the budget.

So now I'm looking for a cheaper place to live; a friend offered to rent a house with me, but I want my own place. All I can do is pick up and forge on ahead amid the criticisms and judgments of the financially secure and well-to-do. Just keep in mind, while all this info is sound and sensible, it does little for those who earn just enough to stay afloat, where a catastrophe such as car repairs can devastate the budget because there is little to no wiggle room to begin with. Having an education is great, but remember and keep in mind a degree isn't going to feed you; it just lets you decide what you want to do to eat. In this economy, most jobs are gone and to those who think people should get a job at McDonald's or Kroger should try supporting a family on minimum wage and come back and tell us about it. I'm sure it will be interesting to hear about it.

Shannon of OH 9:20PM May 23, 2010

We have cc's with points so everything goes on the cc with the best return. NO balance carried EVER. So at the end of the year I get $500-850 back! We have NO debt, not car, home (we have 5 homes), 4 are rentals, good income from the sale of business. We have owned our water front home for many years. We do not waste money.

Friends of mine are loosing their home, their cars are not pd for, they waste money like crazy. I had to laugh last wk when they were over for dinner. They have to treat themselves every week with something. They think a treat will make everything right. My treat every day is I owe nothing to no-one. When I get up in the morning and look out at the water, I know the view is mine, and will always be mine.! What a treat! We worked hard, nthing was given to us and we are not rich, but through diligent spending we are in pretty good shape.

It was work, but worth it, anyone can do it. All these people loosing their homes, totally unnecessary, I will bet they were always on a spending spree. Now they expect us to bail them out, why should we, I did not work hard & save to pay for someone elses extravagance.

Kate of SC 9:27AM May 03, 2010

My Attitude: If I can't pay cash, then I can't afford it.

That goes for everything except for the first house which was a modest normal 1200sq ft ranch style. Paid it off in 10 years and have been debt free since. Always save 25% of the paycheck --Pay yourself first before anyone else. I do use a Discover card for the 'cash back', but set aside and pay it off every month, otherwise it's cash only, not even a debt card. When your debt free, your tend to accumulate cash fast since your not paying an extra 20% interest on things. Once you are paying cash, it just becomes second nature to question "Do I really need this"? Most of the time the answer is NO. The money ends up buying stock in something that pays long term dividends, like Altria, McDonalds, Waste Management, Wal-Mart, Sherwin-Williams, etc. yeah there's other stocks, but I like to sleep at night and just collect dividends. Oh, yes, I listen to Dave Ramsey.

Jack Thompson of OH 4:41PM April 30, 2010