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goalsetter
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Joined: 01 Mar 2015
Location: CA
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| Work or Continue with School |
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I am an aspiring doctor. My husband and I decided I can go back to school while he covers all expenses that were previously both our responsibilities. We have liquidated most our reserves + accrued $9k in student loan debts in the last 2 yrs. We are mostly living month-to-month. We currently only have $25K in our retirements(combined). He is 33 and I am 28. I was earning $95k when working and he is currently earning $150k. His credit is bad (530)and mine is okay (680- went down after some unexpected collections hit this fall and I am currently disputing). We have also been repairing his credit during this time (up 80pts since 2013);we paid $60k in debts from 2013-2014 aside from our regular expenses.
Do you think it would be a good idea to go back to work for a couple years to get in a better financial standing or should we continue on? I can go back to making the same or more. I have my B.S. in Business and am completing all my premed requirements this semester. The plan is to do a post bacc this year- costs is ~$50k/yr. and can take out student loans or get scholarships. (I've received 2-$10K academic scholarships over the 2 years).
After being admitted to medical school it will be another 5-6 years before I contribute financially. Money is the only issue at this point. I should also add that he earned $150k in 2013, was unemployed for part of 2014 (3 months) and then re-employed totaling $102k (~$70K Net) that year (huge hit). This year he has earned $25K Gross YTD and expects to get a raise where he will end up at ~$180k gross. I really hope there are no other set-backs. I also have Veteran Education benefits that have not been used (will use in medical school). We have two daughters and plan on having another child.Please advise.
Last edited by goalsetter on Sun Mar 01, 2015 5:15 am; edited 1 time in total |
Sun Mar 01, 2015 12:56 am |
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oldguy
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I would go ahead with your school plan - as long as DH keeps a steady $150K to $180K income stream, you should be able to navigate thru 5 or 6 yrs of you in school FT, DH working FT. The Vet benefits will mitigate the loans, the existing $9k loan is small (for a $180K income). But if the $150k/$180K crashes, don't run it into the ground by living off CC's, be flexible and make a rapid decision to reverse.
There must be a back-story that earned you the 530 & a 680 scores plus the collections. Hopefully you've grown beyond the "indiscretions of youth" and now have better management skills. Best of luck! 
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Sun Mar 01, 2015 3:25 am |
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goalsetter
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Location: CA
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Thank you oldguy.
Yes, we both had some blunders and major set-backs in our early and mid 20's with school, failed businesses, career-changes, medical problems, and family let-downs. I am glad we got passed those times and only moving forward.
The recent collections are a ticket & a utility bill:2 collections totaling $1200 ($980 for the ticket shows as government debt). One was reported starting in October and the other in November. I did not find out until I checked my credit 2 weeks ago. I am disputing to get more information since I have not received notice of any ticket and I don't know the utility company information.
As far as income stream situation, it is harder to live off a lower amount of money with an increase amount of bills due to tuition and other school expenses while also trying to tackle money problems from the past. It did not make it easier to have a loss of income in the middle of the drastic change. The time of unemployment was the primary reason all assets were liquidated coupled with already liquidating a major portion ($60k) for the past debt.
$35 K of that debt was medical bills on credit. I learned the hard way that if you get severely ill requiring hospitalization and did not pay your insurance (money management is crucial if it is not automatically taken out from your paycheck) you will be stuck with huge amounts of debt or collections with nowhere to turn.
Thank you for your fast response. Any other advice is appreciated.
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Sun Mar 01, 2015 5:31 am |
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oldguy
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quote:
and did not pay your insurance (money management is crucial if it is not automatically taken out from your paycheck) you will be stuck with huge amounts of debt
Yeah, "auto withholding" has become a national trend. It is a convenience for older citizens - and a trap for younger citizens. Years ago we paid our insurance bills annually - car, house, property, medical - paid for the newspaper once a year, paid our income tax on April 15, etc. Now, most of those things are auto-withheld in your mortgage, or your paycheck.
One that really stands out, income tax. The average refund check in the US is now $3000/yr. Until WW2, you paid your taxes on April 15, but the Prez needed some upfront money to fund WW2. The bill passed cuz of patriotism, ie The War Effort - if the bill had been presented at any other time in history, it would have failed miserably. And now the situation is reversed - the public insists on overpaying by ~$3000/yr so that they can get a high "refund". How dumb have we become?? Would you overpay your electric bill by $300/m all year so that they owed you $3600 on Jan1? I'm guessing that if we reverted to one annual tax bill on April 15, many (most?) americans couldn't come up w/ the money?
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Sun Mar 01, 2015 3:57 pm |
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Publius
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Is your husband in a volatile industry? Finance, perhaps? The risk with this situation is that when you get into medical school, you will feel "pot committed" and it will be difficult to make an about face if you are suddenly faced with another job loss. So, if I were in your situation, my comfort level with the situation would be correlated with the confidence I had in husband's income stream. Like Oldguy said, you don't want to get in a situation where you end up incurring a great deal of high interest debt because of a job loss and a commitment to this course.
And keep in mind, while you will be making a salary once you are in residency (5-6 years away), it is not nearly as large a salary as what you have walked away from (40-60k depending on COL in the area). So you are 8-11 years away from earning an income higher that what you have given up depending on the length of the residency you choose. Also consider that entering residency involves a match process where you don't really get much choice regarding where you go. Does your husband work in an industry that will allow you to move for 3-6 years? Limiting your residency choices to a small geographical area makes it much harder to get into the program you want.
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Sun Mar 01, 2015 4:43 pm |
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goalsetter
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Location: CA
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Thank you Publius.
As far as confidence, I do not feel 100% comfortable, but the comfort is raising with time. My husband says he is confident, which I am glad to hear for reassurance. I do try and think positive (as I am well aware the situation could be MUCH MUCH worse having been raised in a 6 person household with a $35k income in SoCal).
Yes, his industry is volatile, but his career is not. He has been riding with the volatility for >13 years and was only unemployed those 3 months with the lowest income being that year- although since it was 9 mths ago, I believe I am still a bit shell shocked. I actually did seek work right after and was offered a position in a week but he asked me not to take it and to stick with the academic plan. He was offered many positions but he took 3 months to take the "right" career opportunity within his industry with the "right" company- as he had not anticipated the unemployment period and was not considering a different company. Had that period not occurred, I don't believe I would have any doubts or questions about going back to work. We did not accrue any CC debts- only took out student loans and liquidated everything.
What I am gathering from your message is that we should strongly re-evaluate the options and financial stability before actually starting med school? If I am interpreting correctly, that is a great idea and thank you for putting the $ contribution during my residency school years in perspective. You are right, once in med school- it will not be easy to tell a med school I have to withdraw for any "good"reason.
His career does allow for flexibility with moves/ paid time off. We have discussed moving in many cities in the country, but his income will not be hindered with the moves. In some locations his income will increase and we have considered only the cities that will either maintain or increase the income stream with the same position.
Again, thank you for the feedback.
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Mon Mar 02, 2015 4:57 am |
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