Would appreciate your comments / suggestions on my financial situation. I will try to make this as brief as possible.
42 yrs old, married, 2 kids (11, 10)
ER physician in CA, graduated from residency 2014.
My wife doesn’t work at this time.
Kids go to public school.
We rent a home.
As of Day 1 of being an ER attending in Aug 2014, my debt totaled $373K:
I/we had no assets besides my wife’s 401K worth about 80K.
Now you may have noticed above some crappy car loan rates. That is due to us having bad credit. We used to own a rental property in Arizona. We lost money every year. Moreover our losses occurred during the market housing bust. So we decided in 2011 to foreclose on our property (we lost 50% of house value and were losing money every month). At the time we were willing to take the hit to our credit. Perhaps that wasn’t the right thing to do. But the past is done and right now we have a delinquency on our credit. This makes it difficult to be approved for any loans, and if we are approved the rate is not competitive. The key thing is that I expect our delinquency to be removed in 7 years, so sometime in 2018. The good news is our credit scores are ~ 750, hopefully higher.
I’m an independent contractor doctor. I have steadily increased my workload to 18-20 shifts/month. Last year I worked 2000 hours, made $440K. Fed taxes = 23.2%, CA taxes = 5.6%. This year I will probably make about the same.
I am *pleased* (not ecstatic) about how much I’ve paid down. Since Aug 2014 I have reduced my debt from $373 K to $211 K. My debts are
Monthly expenses:
Some Comments:
Some Questions:
That is all I have right now. I think the biggest way I could pay down more debt is by refinancing it. It’s going to be too hard to significant reduce our rent. I’m already working too much. And if my wife works we have to get a nanny which is a big pain-in-the-butt! (tax wise that is).
42 yrs old, married, 2 kids (11, 10)
ER physician in CA, graduated from residency 2014.
My wife doesn’t work at this time.
Kids go to public school.
We rent a home.
As of Day 1 of being an ER attending in Aug 2014, my debt totaled $373K:
- Credit Card $25,000 (at ~13%)
- Student Loans $300,000 (Public: 240K @ 6.8%; Private 58K @ 5%)
- Car Loan #1 $14,000 (Mazda 2012 @3.2%)
- Car Loan #2 $23,000 (Subaru 2013 @ 5%)
- Parents Loan $15,000 (at 0%)
I/we had no assets besides my wife’s 401K worth about 80K.
Now you may have noticed above some crappy car loan rates. That is due to us having bad credit. We used to own a rental property in Arizona. We lost money every year. Moreover our losses occurred during the market housing bust. So we decided in 2011 to foreclose on our property (we lost 50% of house value and were losing money every month). At the time we were willing to take the hit to our credit. Perhaps that wasn’t the right thing to do. But the past is done and right now we have a delinquency on our credit. This makes it difficult to be approved for any loans, and if we are approved the rate is not competitive. The key thing is that I expect our delinquency to be removed in 7 years, so sometime in 2018. The good news is our credit scores are ~ 750, hopefully higher.
I’m an independent contractor doctor. I have steadily increased my workload to 18-20 shifts/month. Last year I worked 2000 hours, made $440K. Fed taxes = 23.2%, CA taxes = 5.6%. This year I will probably make about the same.
I am *pleased* (not ecstatic) about how much I’ve paid down. Since Aug 2014 I have reduced my debt from $373 K to $211 K. My debts are
- Student Loans $188 K
- Car #1: $7 K
- Car #2: $16 K
- No CC debt!
- No parental debt!
Monthly expenses:
- Rent, phone, Health Insurance, TV, etc = $6.5 K
- SEP-IRA = $4K
- HSA = $550
- All Loans = $4,000 (I am basically doubling my student loan payment, sometimes more).
Some Comments:
- I’ve tried refinancing my student loan debt through a variety of companies and I can’t due to my credit delinquency. I even refinanced one of my cars to only 3.2%!
- I don’t think I’m eligible for PSLF. I didn’t even realize it existed until I became an attending. I was in forbearance during residency.
- I’m maxing SEP-IRA and HSA accounts.
- I would love to live like a resident. I hate debt and would spend little money. But I have a family. My wife is not a big spender but I think there could be some improvements. It’s hard. We put our kids in soccer, music class, summer school, and that stuff all adds up.
- We have no plans on moving out-of-state. I could probably live in a bunch of areas around the country, but my wife wants to live out here in the Bay Area. In fact she would like to live in SF itself! Her family is here and her Mom is kind of stable-ill if that makes sense so she wants to be close by. Moreover, our kids are in the school system here and they have friends, and moving makes that issue more difficult.
- I am not a car guy, but I absolutely love my Mazda and it is one of the few things that make me happy every day. Bought it used with 21K miles.
Some Questions:
- My wife wants us to have money set aside as a down payment ready when we are ready to buy a house in a few years. I have not been saving money for that because I want to pay off the debt. I think I know what you are going to say…debt first then start saving for a down payment. Don’t do it at the same time?
- Should we put aside money for our kid’s college education starting today? They will be going to college in 7 years.
- I might be able to get a job at Kaiser. I would make much less each month, but they have a great pension plan. In general, if I work there for 20-25 years and if their pension plan remains solvent, I would make $160K/yr as a pension. Is it just a no brainer that it would be easier for us to retire if I could get a job with Kaiser?
- I would love to just pay off the car loans. And then use that monthly payment money towards my debt. But that is technically not the right thing to do, right?
That is all I have right now. I think the biggest way I could pay down more debt is by refinancing it. It’s going to be too hard to significant reduce our rent. I’m already working too much. And if my wife works we have to get a nanny which is a big pain-in-the-butt! (tax wise that is).
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