Now that I have a job...
April 3, 2010 12:23 PM   Subscribe

Now that I'm (modestly) employed again, what kind of professional advisement can I get to help me manage my student debt and plan for the future?

I'm in my early 30s, and it's been a long time since I've seen a regular paycheck that would keep me in the black. I'm used to juggling, fudging, borrowing, and wistfully shrugging to get through most months.

Now I'm starting a job as a social worker that pays a salary in the mid 30s and feels pretty stable. I'm not going to have lots of money to invest, but I do know it's time to start facing down my large student debt (currently in economic hardship deferment), and even maybe starting to save some money, which has been totally unthinkable to me up until now.

The concept of a 'financial adviser' evokes leather chairs and cigars and New Yorker ads to me. What I want is to work with someone who understands options for debt consolidation (especially under the new rules from recent legislation) and can help me make a payoff/savings plan that is reasonable for what will probably remain a modest income.

So does that person exist? What is her job called? How much do her services cost? Where do I find her?
posted by milkman to Work & Money (6 answers total) 4 users marked this as a favorite
Such person may be exist, and it's definitely worth looking into consolidation plans and whatnot. But your situation sounds easy enough:

step 1) have a 2 month buffer so that if you lose your job, you can eat and not die
step 2) pay off any credit card debt (you didn't mention any but it's worth mentioning because it's super toxic). this means paying off principal, which really is the key in all this: pay off principal
step 3) bump the 2 months to 6 months. this is rent and food. this money is not to be touched, really, unless shit happens. But it's improtant to have
step 4) use every spare cent to pay off student loan debt.

Paying off debt is this simple (never said easy, but on paper, that's really all there is to it). You have to decide what standard of living you need to not go crazy, and then divert the rest into exhausting debt.

I would not recommend saving more than what is necessary to survive a disaster because you'll be losing out because debt is expensive. The contradiction to this is if you have some sort of retirement saving matching plan through your job -- a financial professional can help you reason through this if you do (it's usually worth investing as much as you can as long as they match you), as well as consolidation and whatnot.

But really, the key is this: pay off the principal as quickly as you can.
posted by wooh at 1:24 PM on April 3, 2010

you didn't say what the interest rate is, but if it's >4% I'd just pay as much as you possibly can on the loans. Whether consolidation is a good idea or not depends on the interest rates of the loans.

are you sure you need a professional to help with this? Do you know how to make yourself a budget? if you do, make the budget, calculate what you've got to save, and go from there.

I agree with wooh on the 6 month emergency fund, and also saving for retirement in the process (personally I would max out a Roth IRA if possible).

Also check out Get Rich Slowly ( and read up, and I bet you will find all the information you need without paying anyone. And many student loan companies have someone you can call to discuss your situation and go through the payment plan options. Ideally, you choose a payment plan that allows you to have the smallest required payment per month, giving you flexibility in case of emergencies, but then you pay as much more than the minimum as you can every month so that you end up paying the least amount of interest you have to and getting rid of the debt ASAP.
posted by treehorn+bunny at 1:43 PM on April 3, 2010

Response by poster: Thank you treehorn+bunny and wooh for your advice.

Here, however, I encounter one of the constant frustrations that I (and, I think, people like me) experience when seeking to address these issues.

It's not just that I don't have an instinct for keeping a budget, or even that my experience of the last 10 years or so has been so totally inconsistent from month to month that making a budget has always seemed largely speculative and rarely prescient (which is really more the case than that I'm just too dense to understand how a budget works). It's also not that I'm incapable of understanding what are ultimately not very complicated mathematical formulas.

But it IS true that I a) don't like dealing with this stuff at all and, since I am not used to having money, am in the habit of thinking that I must be dong something wrong; b) feel overwhelmed by the number of solicitations I have received over the years for consolidation and debt-reduction programs (not to mention debt collectors), and -- though I like to think that I am not easily fooled -- would appreciate an outside opinion in evaluating what kind of commitments/choices I might make moving forward; c) don't like dealing with this stuff at all, and have a lot to do, and would like to consider that one rational investment that I might be willing to make that would both save me time and make me happier is to not have to worry about whether the plan I've made for myself is hiding some stupid mistake.

So, with all respect to you and to other future posters, what I'm NOT looking for is advice about how to pay down my debt if I could just think rationally for a minute. I'm looking to find out if there's someone whose job it is to help people like me work it through....and hopefully, since it's so darn simple, not charge me more than such advice is worth.
posted by milkman at 2:03 PM on April 3, 2010

Maybe they do, but I feel they're going to charge a lot more than they are worth. Sometimes getting rid of the insecurity is worth it though and as I said in my post, maybe someone exists.

What we wrote had no veiled criticism, though its understandable that you took it as such. What we wrote was something actionable. If you pay someone to do this, they're going to tell you basically what we told you, and then charge you a bunch for advice that, ultimately, you're going to have act on anyway, although maybe there's a government plan or something that will help you.

Debt sucks, it's hard to manage, and paying someone won't get you out of that headache.
posted by wooh at 2:12 PM on April 3, 2010

My credit union offers one free consultation with a financial advisor every six months. That's about all I need. You might see if your bank has the same thing.

While you're looking for that person, something else that really helped me through the stage you're at was reading personal finance blogs. I channeled most of my Metafilter procrastination energy into what was similarly chatty, funny reading -- about money management. It worked on a non-rational level, too, because reading them every day made it feel like I was suddenly friends with a bunch of really financially conscious people, and a peer pressure thing came into play (e.g., you read eight comments about how nobody smart would do X, so you suddenly start avoiding it with that same passion, even though yesterday you had no idea). These blogs often also focus on the "personal" in "personal finance, much better than that credit union financial planner I mentioned. Posts about overcoming resistance to budgeting, for example, really helped me. So, with that explanation of why it did so much for me, you can see the list of blogs I was reading here.
posted by salvia at 2:24 PM on April 3, 2010 [2 favorites]

Many people swear by Dave Ramsey's "Financial Peace University." While not a professional financial planning class, Ramsey pretty much covers all the bases. I am a Ramsey fan, though I plug my ears to the God-talk.
posted by Rosie M. Banks at 4:39 PM on April 5, 2010

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