Dear Terry,

I am an occasional listener of the business lunch on WGN and I visit the site sometimes for advice. I'm in my late 30's and my wife is in her early 30's. We own a home with a mortgage over 170+. We both have our typical credit card debts and a rather large student loan hanging over my wife's head, about 100. She's a smart cookie with a bachelors in Psych and recently graduated as a nurse as well. I work for an engineering firm. Oh, I guess I should mention I recently decided to return to school and complete a Bachelor's in Engineering and move up the ladder, luckily I have no outstanding school loans until now. By now, I'm sure you are wondering, Where's the question? Well, Where can we turn to for sound advice on personal accounts and find a way to refinance that huge school loan from Navient? Between both of us we make about 100(which should increase soon) and I just think we need to make a significant change to right this ship and find clearer skies, if you catch my drift. We have investments, I have a retirement account working for me, I am part owner of a second home free of mortgage as well, and two cars paid off this year. I'd like for us to get out from some of the money stress, especially since moving to another market/town/state has always been a consideration for us in the next 5-10 years. Its a lot of words, but thank you for reading. I look forward to your response.

Terry Says:

Well, it’s a good question — and it’s good that you have the resources to deal with it.  Now, to be clear, you have only two choices to get our from under: pay down the loans faster –or refinance to a lower interest rate.

I would definitely make extra payments on your loan.  But why do you have part ownership in a home instead of using this money to pay down those high-rate student loans?  Or pay for your new degree?  And why do you have “typical credit card debts” at even higher rates than your student loans?  It strikes me that you need to make a concerted effort to pay down your debt.  Instead you’re taking on even more debt for your degree. I agree on investing in your future, but I hope you understand what a burden you’re adding.

One suggestion for your wife.  Since she is employed she might be able to refinance her debt at a lower rate.  Check it out at www.SoFi.com.  And one more suggestion:  Don’t even think of having children until you make a real dent in this debt!

 

Have a Question?

Ask yours!