Financial advice for future hiking

[blackbird04217]

Well, to say my thru-hike was life changing would be quite an understatement. I've been aiming at paying off my pesky student loans so I can get out and live freely. However it will take at least 5 to 10 years to pay off my loans. (80k of 93k remaining).

Recently I've been seriously contemplating getting a loan for a condo; The last thing I want to do is put myself in more debt, but on the other hand it could prove useful as I have the possibility of seeing some of the money back; where as paying rent is just basically tossing my money aside. I am not living in an area I would want to be living in for my life; but I can't move where I want for lack of jobs in my profession.

So this may not be the most appropriate place, but I figure someone here has some insight that may prove useful.

[fiddlehead]

Good Luck.
What always worked for me was: No debt, no bills.
Make enough during the winter to hike again each summer.
Paid off my house doing just that too (had roommates and let them pay the mortgage)

Seems to me you would have to pay off those loans before you can go in debt for anything else.
Just my 2 cents. I never graduated from college but I learned a bit about compound interest.
Debt sucks.

[Slo-go'en]

Do you really live in Bethel, ME? If so, why would you want to live anywhere else? My advice is to buy a really cheap house somewhere in the area and start to fix it up. Then live there forever :sun

[blackbird04217]

Heh, Bethel is my home town - and exactly where I want to live. However I am currently closer to Boston, MA and while I have a fair paying job to keep paying these loans; I really don't want to do this daily grind that it seems society expects. I don't have that luxury at this time as I owe lots of money.

Likely I will eventually build a nice small house back in Bethel, Maine - but until then I am pondering buying a condo or something for the next 5+ years; so that I can hopefully get some of that money back. As it is now I spend $12k a year for something I will never own, or get money back from. I could lower that to like $8k to 10k if I found roommates but then I'd have to deal with those hassles.

Also @fiddlehead, I do keep bills to the minimum, and the only debt I have currently is my student loans. The only other debt I plan on getting myself into, if actually I need to, is my house. Other than this idea of buying a condo for the time from now until I get my student loans paid off.

My real dilemma is trying to figure out if I should suck it up and keep spending endless amounts of money on rent; OR if I should "get further in debt" on a bill I would have to pay anyways with the possible ability that I get *something* back afterwards. Is it a mistake to be thinking of this, or is it smart? I am blindly thinking it would be the smartest thing I can do; but worry that once I do it I will feel extremely stupid.

[Bobby]

For what it's worth -
Buying a house or condo now that you only plan on living in for the next five years is not a good idea.
Although interest rates are low, property values are projected to decline slightly more and then remain flat for the next few years, I actually believe that there will be an additional crash in the housing market once the govt stops propping it up.

Also when you take a housing loan out, the first ten years or saw a mostly interest that you will be paying - the principal does not decrease much at all initially. There are the added costs that renters don't have - property taxes, insurance, water and sewer and repairs to name a few - condo fees if our talking condos too.

You also need to put down some of your own money when you purchase a property and pay closing costs that can run into the several thousands. At least for now - gone are the days of making a quick buck off of property using borrowed money.

The only exception to this in my mind is a multi-family or an apartment building. They are pretty cheap right now, lots of tax write offs and if you pick the right property, someone else pays your mortgage and perhaps your other expenses too, but there is risk and work involved.

[Leanthree]

So home ownership is a great tax advantaged savings vehicle over the very long term. Historically, the investment has made about 4% per year after upkeep, mortgage, property taxes, etc.

In the short term it can put you in all sorts of trouble if the house value falls, and even if it just stays flat, it takes some time to recuperate the transaction and initial fix-up costs. 5 years is short if you know in advance it will only be 5 years. When calculating how much you will pay for an owned house, 1% of the home value is the rule of thumb for maintenance. Add to that condo fees, mortgage, property taxes and renting doesn't look terrible.

I would look into renting a smaller place for less rent. I used to live in far too big of an apartment before moving to my 251 sq foot 1 br (no joke, the whole thing is 11'x22'+ a 3'x3' foyer) apartment that I share with my girlfriend and it was a revelation similar to when I moved from my 5200 ci pack to a 46 liter pack and went lightweight.

Going in, I thought I would go nuts but it has been such a fantastic way to live. It fits everything I need (my ski gear, my backpacking gear, my clothing, tv, couch, bed, dressers, small kitchen table and not much else) without any of the crap. If something doesnt fit, I throw it out. If I get a new piece of clothing, an old piece goes otherwise my wardrobe wont close. I am no minimalist but I find myself not buying as much stuff because I would have nowhere to put it so I save there a bit as well.

As someone from new york city, which along with Boston are the crazy rent capitals of the country I have many friends and co-workers who make plenty of money but are terribly rent poor because they are spending a whole paycheck a month on rent. No matter how crappy your current place is, for $200 less a month (plus some savings for lower electric/gas bills) you can find a place with less square footage but that serves you well. It is likely you slept in around 30 square feet on your thru, 300 isn't the end of the world.

This is not to say that how I live is best for all, but it certainly saves me a lot of money that goes to lift tickets and excessively lofted down rather than my landlord and the utility companies. $200 a month is $2400 a year or $12,000 over your 5 year time horizon which give or take doubles how fast you are paying them down now.

Sorry for the long post, I hope it helps.

[daddytwosticks]

I would not buy a dwelling, given your curcumstances and age. Suck it up and keep renting. Most talking heads agree we have not reached bottom yet in the real estate market. It would suck to buy something with a mortgage and watch its value decrease. :)

[Doc Mike]

So home ownership is a great tax advantaged savings vehicle over the very long term. Historically, the investment has made about 4% per year after upkeep, mortgage, property taxes, etc.

In the short term it can put you in all sorts of trouble if the house value falls, and even if it just stays flat, it takes some time to recuperate the transaction and initial fix-up costs. 5 years is short if you know in advance it will only be 5 years. When calculating how much you will pay for an owned house, 1% of the home value is the rule of thumb for maintenance. Add to that condo fees, mortgage, property taxes and renting doesn't look terrible.

I would look into renting a smaller place for less rent. I used to live in far too big of an apartment before moving to my 251 sq foot 1 br (no joke, the whole thing is 11'x22'+ a 3'x3' foyer) apartment that I share with my girlfriend and it was a revelation similar to when I moved from my 5200 ci pack to a 46 liter pack and went lightweight.

Going in, I thought I would go nuts but it has been such a fantastic way to live. It fits everything I need (my ski gear, my backpacking gear, my clothing, tv, couch, bed, dressers, small kitchen table and not much else) without any of the crap. If something doesnt fit, I throw it out. If I get a new piece of clothing, an old piece goes otherwise my wardrobe wont close. I am no minimalist but I find myself not buying as much stuff because I would have nowhere to put it so I save there a bit as well.

As someone from new york city, which along with Boston are the crazy rent capitals of the country I have many friends and co-workers who make plenty of money but are terribly rent poor because they are spending a whole paycheck a month on rent. No matter how crappy your current place is, for $200 less a month (plus some savings for lower electric/gas bills) you can find a place with less square footage but that serves you well. It is likely you slept in around 30 square feet on your thru, 300 isn't the end of the world.

This is not to say that how I live is best for all, but it certainly saves me a lot of money that goes to lift tickets and excessively lofted down rather than my landlord and the utility companies. $200 a month is $2400 a year or $12,000 over your 5 year time horizon which give or take doubles how fast you are paying them down now.

Sorry for the long post, I hope it helps.

Sage advice

[Boliche]

It sounds like you are moving forward towards your goal. You didn't complete your education in zero time. You will not achieve a debt free condition overnight.

If you are working for a reasonable company, you will in all probability receive a raise of some sort each year. When you do, split it into four parts:
1) The Taxman - he will get his share come what may.
2) Increase your retirement savings - small increase, but a large % incremental increase.
3) Increase your debt payment - again a small increase, but a large % incremental increase.
4) The rest is yours - you need to increase your lifestyle a little so it appears that the light at the end of the tunnel is not a freight train.

Do this for 3 or 4 years, and you will find yourself to be a savings fool and living the good life.

[Slo-go'en]

I never saw the value in owning a condo. Not only do you have to pay the morgage on it, you also have to pay the condo fees, which by themself's can be almost as much as rent. Then if any major repairs need to be done, your all hit for even more money to pay for it. Then there are all the rules and regulations you need to live by. You also need to consider what might happen if for some reason you lost your job. Then you'd most likely loose all the money you put into the place.

The advice so far has been spot on. Don't buy until you plan to live there a very long time. In the mean time, save as much as you can so when you do buy, you can do it for cash or with a very large down payment.

Good luck to you and to all of you kids saddled with insane student load debts.

[Catscradle]

I'm no financial expert, but I think now is not a good time for a short term purchase of real estate. I'd say unless you're planning on being there at least 5 years, preferably 10, it is not a good idea. JMHO.

[kayak karl]

in the 70's and early 80's my pay went from 10K to 37K. a lot in those days. we put 50% of every raise i got and my wife got into the credit union. they took it out of pay so i never saw it.
added up real quick and didn't feel the pinch.

[Shutterbug]

Well, to say my thru-hike was life changing would be quite an understatement. I've been aiming at paying off my pesky student loans so I can get out and live freely. However it will take at least 5 to 10 years to pay off my loans. (80k of 93k remaining).

Recently I've been seriously contemplating getting a loan for a condo; The last thing I want to do is put myself in more debt, but on the other hand it could prove useful as I have the possibility of seeing some of the money back; where as paying rent is just basically tossing my money aside. I am not living in an area I would want to be living in for my life; but I can't move where I want for lack of jobs in my profession.

So this may not be the most appropriate place, but I figure someone here has some insight that may prove useful.

I don't volunteer financial advice, but you asked for it. Here is what worked for me.

1. Make as much as you can. A good income when you are young is important.
2. Spend less than you make.
3. Invest what you save in long-term investments. Don't play the market.

When it comes to a place to live, most of the potential gain comes in the purchase. Buy the house or condo below market. It takes a lot of work to find bargains, but the effort is worth it. My housing cost over the past 40 years has been less than zero because I have bought houses at below market prices, fixed them up then sold them. Three have been foreclosures. Two have had serious structural issues. One was just an ugly house because the previous owner had bad taste. I have made significant profits on all but one. The profits on sale have more than covered the monthly cost during the time I lived in them. Based on my experience, I recommend that you buy, but only if you can find a unit that is way below market and you have the skills needed to improve the property.

[max patch]

With the caveat that I don't know anything about the real estate market in Boston -- except that its pricey -- buy a house rather than a condo if your goal is capital appreciation.

[Berserker]

I think fiddlehead, Bobby, Leanthree give excellent advice. Considering your situation renting leaves you unencumbered so that you can pay those loans off, and move as needed. Buying property is risky, and unless you have time to sit on it or know exactly what you are doing you run the risk of losing money. That may be fine considering you're a young guy, however those student loans change the game. So yeah, I gotta agree with the other guys above, and say that if it were me I would keep renting and pay off those loans. Then once you have that taken care of you can move on and purchase property if that's your desire.

[trippclark]

Don't buy now. You are not ready and doing so now, while you already have $80K in debt, would only harm you. Rent as cheaply as you can, and cut your lifestyle as much as you can. Stay out of restaurants, unless you are working there. Attack the student loans with everything that you can throw at them, except for a small buffer of $1000 for emergencies. Try to knock them out in under 5 years. Later, after you have paid off your debts, then you may be in a position to consider buying when owning a home can be a blessing and not a curse.
Read this book [/URL] for great advice.

Link for book: [url]http://tinyurl.com/6euuxmp (http://www.amazon.com/Total-Money-Makeover-Financial-Fitness/dp/159555078X/ref=sr_1_1?s=books&ie=UTF8&qid=1320256195&sr=1-1)

[blackbird04217]

@Leanthree- I have little no concerns with an even smaller apartment than I already in, I am in a studio as it is; probably the smallest apartment I've ever rented and by far the most amazing; I like the single room, for everything, aspect.

I guess I should wait it out; but I can't help but feel like I will end up spending a lot more money in the long run this way, a feeling I don't like very much. I have a decent paying job, that I certainly would not have without the education, but what does that matter in the scheme of things if I no longer feel like working 8hrs a day, 5+ days a week just because that is 'normal'.

Perhaps instead of worrying about buy/rent I should instead focus on paying my loans for 2 years, go for a hike, pay loans for 2 yrs go for hike etc... And just rent in the off-hiking years.

[Catscradle]

...

Perhaps instead of worrying about buy/rent I should instead focus on paying my loans for 2 years, go for a hike, pay loans for 2 yrs go for hike etc... And just rent in the off-hiking years.
I didn't have a "real job" until I was 31 (college, military, college) and wanted a family. Fortunately I had free tuition in MA state schools plus the GI bill because of being in the military at the particular time I was and had no debt to speak of. I enjoyed life and suggest you do too. Just be aware that at this stage in my life I don't really have the money I need to retire properly; I don't regret my choices (except having to do the military which wasn't a choice) and don't mind paying a bit of a price now, but you should be aware that someday you probably won't be making money any more and take that into consideration when making your life choices.

[stranger]

Renting isn't throwing money away, this is a common misconception that society wants you to believe so you spend more money and go into more debt. I've never owned house and have always paid rent. I'm 36, my total debt at the moment is $0.00 and has been that way for the past 6 years. I currently have $19,000 in the bank and am comfortably saving $500/week while paying very high rent. Sydney is one of the most expensive cities in the world now. You are already in a massive hole if you owe upwards of 80 grand - Do not spend any more money you do not have! The greatest asset in the world is being debt free in my opinion. You can't do anything about your current debt, but you can avoid more of it.

[blackbird04217]

Renting isn't throwing money away, this is a common misconception that society wants you to believe so you spend more money and go into more debt.

Sure, buying a house/condo puts me in debt; I may not be using the correct numbers here, so feel free to shove a foot in my mouth, but I envision finding a cheap place; ~$100k; which is why I'd like be stuck going with a condo- A 10yr loan on $80k, ($20k down) is ~$928mo. Which is $100mo less than I pay now; but would probably end up being $1100-1200 with association fees. Sure this includes a fair amount of interest and crap for those who loaned you the money but after 10yrs you are now rent free and have an asset; while you may not get a 1:1 return on the investment; I've have to assume you could get something for your trouble-

Where as with rent; I may have saved $24k over those 10yrs (1200 - 1000 = 200mo * 120 = 24k), I have a hard time imagining I couldn't get at least double that at that time since the place would be paid off. $50k vs $25k? And that isn't nearly a 1:1 return, but to me it sure seems like renting "threw away" some money.

If I appear thick headed, well I don't mean to be, I am just trying to gather as much perspective as I can. Do I particularly enjoy debt, not a bit, but this seems to make sense to me since I have to pay rent regardless; why not pay for something to own/sell later?

[blackbird04217]

[url=http://calculator-loan.info/index.php?form_complete=1&sale_price=80000&down_percent=0&year_term=10&annual_interest_percent=7] This is where I got some of those numbers.

[stranger]

Sure, buying a house/condo puts me in debt; I may not be using the correct numbers here, so feel free to shove a foot in my mouth, but I envision finding a cheap place; ~$100k; which is why I'd like be stuck going with a condo- A 10yr loan on $80k, ($20k down) is ~$928mo. Which is $100mo less than I pay now; but would probably end up being $1100-1200 with association fees. Sure this includes a fair amount of interest and crap for those who loaned you the money but after 10yrs you are now rent free and have an asset; while you may not get a 1:1 return on the investment; I've have to assume you could get something for your trouble-

Where as with rent; I may have saved $24k over those 10yrs (1200 - 1000 = 200mo * 120 = 24k), I have a hard time imagining I couldn't get at least double that at that time since the place would be paid off. $50k vs $25k? And that isn't nearly a 1:1 return, but to me it sure seems like renting "threw away" some money.

If I appear thick headed, well I don't mean to be, I am just trying to gather as much perspective as I can. Do I particularly enjoy debt, not a bit, but this seems to make sense to me since I have to pay rent regardless; why not pay for something to own/sell later?

I look at life fairly simple, you are 26, you already owe someone $80,000! What do you earn per year? How many years will it take to pay that loan off? What about interest? Oh and you want to take 5 months off to thru-hike the AT? If you see a reason to go into further debt...by all means go for it.

[stranger]

Well, to say my thru-hike was life changing would be quite an understatement. I've been aiming at paying off my pesky student loans so I can get out and live freely. However it will take at least 5 to 10 years to pay off my loans. (80k of 93k remaining).

Recently I've been seriously contemplating getting a loan for a condo; The last thing I want to do is put myself in more debt, but on the other hand it could prove useful as I have the possibility of seeing some of the money back; where as paying rent is just basically tossing my money aside. I am not living in an area I would want to be living in for my life; but I can't move where I want for lack of jobs in my profession.

So this may not be the most appropriate place, but I figure someone here has some insight that may prove useful.

I mis-read your post, you have already hiked the trail...congrats on that!

[daddytwosticks]

Maybe you will get better, more detailed advice if you pose this question on a financial forum and not a hiking forum? Good luck. :)

[Johnny Thunder]

not saying this is a cookie cutter solution to everyone's financial problems, but...

think outside the box about jobs/living situations/life-styles. you got that debt ball and chain. pay that **** down, man. there are plenty of well-paying jobs in the states that'll pay you enough to make it go away (and save) and either provide you with a living stipend or create a situation that doesn't require you to have permanent housing.

or, you could move to another country. teach english. travel the world. pay off your debt in 4 years or less.

whichever. convincing folks that home equity should be a guaranteed part of their retirement planning is potentially the greatest trick the mortgage industry ever pulled.

[garlic08]

Renting isn't throwing money away, this is a common misconception that society wants you to believe so you spend more money and go into more debt....

Ditto this, at least in the short term. Look at renting as buying a service at market prices. In return for your payment, you get flexibility to leave at the end of your lease term--just walk away and go somewhere else. You get to leave repairs to someone else--water heater craps out, just make a phone call. I've rented for many years and those years have been the most fun and carefree of my life, compared to owning a home.

I applaud your commitment to paying off your obligations, and wish you luck. If you can find a way to get ahead in this market, you'll have a head start on the commitment it takes to hike the AT.

[rpenczek]

Would not give this advice had you not asked.

I am a fairly successful business person with a family of 6. If my company were to move me today to a different city, I would not be a renter (assuming I would be there longer than 5 years), but, I am 46 with 4 kids. On the other hand, if I were 26 with no kids or I thought I would move again in the next five years I would be a renter. The reason? Buying real estate is not just about the cost of the property, it is also about the cost of the money you use to purchase the property. These two costs are really one. Said another way, it is all one pot of money with a total. So, as interest rates on mortgages rise, the price of real estate goes flat or will decline (assuming no artifical influence on demand). This occurs becase people like yourself (most of us) look at the purchase in terms of monthy payment in the context of our monthy budget.

As an example, if your MAXIMUM monthly payment can be no more than $537 (not including tax/insurance), then you can afford to borrow a $100,000 at 5% interest on a 30 year loan (you can buy a $100,000 house). Now, if interest rates go up 150 basis points to 6.5% you can only afford an $85,000 loan/house to be at the same payment. So if I am the guy selling, as interest rates rising, I must continue to adjust my selling price down to keep up demand for my house (or my buyer, you, is priced out of the market). Why is this all important you ask? Well, mortgage rates are at historical lows right now and will very likely go up in the near future and the housing bubble has burst (home prices are low(er)). Buying now for the short-term (perhaps 5 years or less) could very well lead to a loss on resale because as interest rates rise (very likely) real estate prices will fall to maintain demand.

Hope this helps in your decision process.

[DapperD]

Ditto this, at least in the short term. Look at renting as buying a service at market prices. In return for your payment, you get flexibility to leave at the end of your lease term--just walk away and go somewhere else. You get to leave repairs to someone else--water heater craps out, just make a phone call. I've rented for many years and those years have been the most fun and carefree of my life, compared to owning a home.

I applaud your commitment to paying off your obligations, and wish you luck. If you can find a way to get ahead in this market, you'll have a head start on the commitment it takes to hike the AT.There's positive and negative attributes to both renting and owning. I agree much is to be said for just renting. A lot of times if one rents an apartment in a complex, and if it happens to be located in an area that receives significant yearly snowfall accumulations, the apartment complex will pay for the removal of the snow. They are responsible for clearing the walkways, plowing the lots, etc...in the summer months they mow the lawn. If something breaks, they repair it. Usually. And if they can or are willing to. If you live in a high end complex, repairs will most likely be performed fast and professionally. However, if you don't have the money to live in the better complexes, or rent from a private landlord, repairs when in need can be performed cheaply, inadequately, or not at all. Some times the landlords/owners don't want to do much of anything. Some places advertise "free heat" when in reality this means they will only provide this during the coldest months, say November thru March. And even then you will only get 50% of the heat you would need. In order to be warm and comfortable you will need to supplement their "free heat" by running an electric space heater or equivelant, incuring a greater utility expense. Also living with other irresponsible tenants next to you or directly above you can sometimes turn in to a horrid experience. So in the final analysis renting is definately and not always the best decision for everyone:rolleyes:.

[Toolshed]

So after having bought and sol d a few houses over the years in NY, PA and MA, and having drowned in grad school debt ($18K back then) and coming from a very small town in nowheresville (and always wanting to own an home) I understand where you are coming from and where you are going. But for the record, my background is Finance/Insurance and Contracting
In my younger years, I wanted maximum flexiblity and minmal responsibility. Renting cheaply was the right option for me. I didn't need anything fancy and I didn't need to impress anyone. I moved around the country a few times and had a lot of fun. I had many friends who settle down after college. many stayed in that small town - The economy is flat and low- I can move back easily a dozen times over after working for over a decade in NJ-and learning to save my wages as much as possible.
The economy in Bethel isn't smoking - Thisis a plus for people like us who moved to the big city - We can always go back to a slower economy. i.e. You can easily move back to somewhere cheaper from somewhere more expensive and learn to live like a king.
I wholeheartedly agree with the others. Owning a condo isn't really the best move for 5 years. Especially if you don't have much to put down. Your contribution to principle will be minimal and you cannot easily sell quickly and take advantage of another opportunity elsewhere.
Good luck on your decsion, whatever you decide!!

[sbhikes]

If it was me, I'd make double or triple payments on my student loan. I would wait for an inheritance to own a home, and then sell it, because I probably wouldn't be able to afford the property tax or the upkeep. Renting is so much easier.

[Toolshed]

PS one thing to keep in mind if you are set on buying. Regardless of whether you gain or lose on your investment in a home, if you are selling the condo in 5 years and buying somewhere else the same time, you will be transacting in the same market conditions, so if prices go up, you will sell high and buy high and the reverse if they go down. Ideally you want to transversely cross markets. Buy low, sell high and hold for the next buy low cycle. Most cannot do this as they buy for life (or the first 20-25 years at least) and aren't as concerned with a profit as they are with a good home/neighborhood.....

[blackbird04217]

@sbhikes- I am putting double+ payments to my loans already, paid off over $10k in principle this year alone.
@toolshed- I wouldn't necessarily go buying immediately after selling; Though maybe I would? Only time would answer that.

I am having more doubts than I was before. It just seems silly, and honestly, as I've said before, it feels like I am spending money for no reason. Sure the convenience of not fixing things that break; which I've yet to ever call maintenance from a place I rented. But even still I feel this is the most valid point in continuing to rent. I have moved around a bit in the past years; 04-07 Florida, 08-09 Iowa, 10-11 Massachusetts - but I do feel I could plant myself here for a bit.

The real thing that kicks me is that I could be paying ~$1000mo to own a condo, while I am currently spending $1000mo for this apartment that I'll never have. If I were paying $500mo for this apartment, OR if buying a condo meant $1500mo payments, then I'd feel quite like I am out of my mind for considering this option. Someone said not to look at the monthly rates; I guess I can't see beyond the monthly rates at how rent > condo; even for the short term.

Going back to my example. I "buy" a condo for $100k I spend 5 years paying $1000mo: [$60k] sure a chunk of that would be on the interest, say only $20k went to the principle [much more had to]; I now owe < $80k on the apartment. So now I sell the condo for $80k and would walk away with the losses spent on maintaining the condo; the door that was replaced etc. I feel this is completely the absolute worst possible case. I am also naive, young and dumb.

My better/best case, that I'd think would work out of the above is myself walking away with ~$20k+ - the cost of the door. As said, I am young and dumb. With the advice given in this thread, I'm certainly less optimistic than I was say last week - when I was nearly ready to start the process. So thanks for everyone who has been, and is being patient and giving me their point of view on the matter. I honestly appreciate it.

[stranger]

Well, to say my thru-hike was life changing would be quite an understatement. I've been aiming at paying off my pesky student loans so I can get out and live freely. However it will take at least 5 to 10 years to pay off my loans. (80k of 93k remaining).

Recently I've been seriously contemplating getting a loan for a condo; The last thing I want to do is put myself in more debt, but on the other hand it could prove useful as I have the possibility of seeing some of the money back; where as paying rent is just basically tossing my money aside. I am not living in an area I would want to be living in for my life; but I can't move where I want for lack of jobs in my profession.

So this may not be the most appropriate place, but I figure someone here has some insight that may prove useful.

The other thing I might point out is that your 'plan' is not really a plan, you want to pay off your student loans in 5-10 years? Which one is it? 5 or 10 years, that's a big difference now isn't it? Why don't you know (within 2-3 months) when you will be able to pay that loan off? In my world a plan is not something that I want to do...a plan is something that I will do. Until you know exactly what you are doing, you are merely speculating - and if that's the case, adding more debt seems crazy to me, especially in America right now.

[stranger]

I am retarded, I can't even quote correctly anymore, you said aim, not plan....can someone please give me advice on how to post appropriately!

[blackbird04217]

Yes. That is my aim.

I succeeded at my plan this year, of whipping out my "small student loan", well will in 11 more days when I get paid. Sad that the entire paycheck is called for, but it will be the very last to go to the small loan!! I don't have a set plan for the big loan yet, because I am pretty tight with my money; okay, extremely tight. And when I have my mind set on something, it happens. So I don't have a set plan because even I know I need to build in times to relax the budget a bit - maybe even another LD hike before finished? 5 years is the shortest term I could pay it off under fairly ideal circumstances, and not much in terms of extras.

[stranger]

One trick I like to use that seems to work well for me is to base my budget on 80% of what I believe is realistic and achievable, and on 10 months instead of 12.

I do this for a few reasons, mainly because in this part of the world everyone gets at least one month paid vacation every year, I personally get 6 weeks, so it doesn't make sense to budget during holiday time, even though I usually am able to save during holidays. In the US, where people generally get 1-2 weeks, you could probably adjust the formula to 11 months to reflect the differences.

Second, I know with this foruma, I am 100% guaranteed to not only reach my goal, but usually exceed it. The mental aspect of 'knowing' I will have X amount of dollars by the end of the year means I don't have to worry about reaching that goal, it will happen because it's a sound budget. So when the filling falls out, or I fly to New Zealand, the budget has enough padding to absorb that in stride.

It's great that you are committed to paying off your loan, I would be the same way...but yes, there are still trails that can be hiked without dropping out of life and spending thousands. Good luck.

[rocketsocks]

Gotta pay before ya play.
But honestly that your 26 and concerned about your future,cudo's.I'm sure money guy's would say pay off your loans first,however mortgage rates are at a all time low.Tough call......trails been thier a good long time.good luck.

[OneStepCloser]

dont buy and pray ...... aka (buy and hold) this oldtimer philosophy on the market is hogwash.... trade the trend its yoru friend but get out at the end..... btw WTH do you have so much student loans? if its going to take you 10 years to pay all that off clearly you dont have a great paying job.. so why did you pay for a private eduation... shoulda coulda wish you woulda went state yeah?

[rocketsocks]

Damn dude. tell em how ya really feel!

[Shutterbug]

Well, to say my thru-hike was life changing would be quite an understatement. I've been aiming at paying off my pesky student loans so I can get out and live freely. However it will take at least 5 to 10 years to pay off my loans. (80k of 93k remaining).

Recently I've been seriously contemplating getting a loan for a condo; The last thing I want to do is put myself in more debt, but on the other hand it could prove useful as I have the possibility of seeing some of the money back; where as paying rent is just basically tossing my money aside. I am not living in an area I would want to be living in for my life; but I can't move where I want for lack of jobs in my profession.

So this may not be the most appropriate place, but I figure someone here has some insight that may prove useful.

I already posted once, but thought of some other comments. You used the term "future." Most of the answers have been about the near future. Let me give some perspective as a 68 year old.

I have observed that most of my contemporaries now have the time to hike, but can't afford it. What good is retirement if you don't have the money to do the things you want? I have never talked to a retired person who wished that they had saved less for retirement. Start saving while you are young and let the miracle of compound interest build your retirement fund.

I can testify that retirement is fun if you have enough funds to go where you want to hike.

[blackbird04217]

@stranger Yea my financial goals are usually held closer to the limits, but I can't remember a time I didn't hit my mark; at least close enough.

@OneStepCloser I went to school to "live my dream life" making video games. Unfortunately, of all software engineers; probably of all engineers? game programmers are the least paid. I would claim I make a fair amount of money given the previous statement, and more importantly from the family I was raised by. I'm not ashamed of the loans, I don't exactly regret me decision, I just have to suck it up and pay it off; It is what it is. I could have got a generic computer science degree, but I'd likely have been bored to death. I got a 4yr degree in 2yrs - which got me in the industry early, and the accelerated learning kept me challenged. Not saying I am better than others at learning, but I can't stand taking 12+ months to learn what can be taught in 3 months.

That said, sure financially a state school looks great. But I doubt very much I would have hiked the trail; and that was the turning point in my life that is really making me question my life beyond these loans. Beyond the daily grind that society deems the way to live. I've been convinced there are better ways to spend my life.

[stranger]

I already posted once, but thought of some other comments. You used the term "future." Most of the answers have been about the near future. Let me give some perspective as a 68 year old.

I have observed that most of my contemporaries now have the time to hike, but can't afford it. What good is retirement if you don't have the money to do the things you want? I have never talked to a retired person who wished that they had saved less for retirement. Start saving while you are young and let the miracle of compound interest build your retirement fund.

I can testify that retirement is fun if you have enough funds to go where you want to hike.





With all due respect...you don't have to wait until 'retirement' before you start living life, I'm 36, I'm debt free, I have a retirement fund, and I work on average 9 months per year and travel extensively, I've crossed the Pacific 29 times, been to New Zealand 21 times (and lived there for 7 years), last year I drove 17,500 miles across the US, I currently live in Australia, and will be heading home to the states for a couple big hikes in July next year, etc... Yes, you can buckle down and save, save , save, pay off your bills, etc... and hope that you don't get sick, hit by a bus, or have another massive recession, lose your job, etc... Or you can live now. Everything is a risk, but do you really want to wait until you are 60 to do some serious living? In today's economy? Maybe for some people...not for me.