Things That Matter

I Have $150k in Debt — Here’s What Financial Experts Told Me To Do

Money is a topic that is difficult to talk about. Traditionally, society has told us that there are three things that we should not talk about in polite company: religion, politics, and money. Well, politics seems to be the only thing anyone talks about these days. As for religion, well, I’m of the “to each their own” policy. But money is something that we often still ignore — especially when it comes to frank discussions about debt.

Nobody likes to admit that they have debt. Whether it’s credit card debt, student loans, or paying off cars, most of us have something that we’re keeping quiet about. According to CNBC, 70 percent of college students are graduating with a “significant amount of loans” which total $1.5 trillion in debt for the over 44 million Americans who have student loan debt. In fact, a recent survey revealed that two-thirds of millennials have at least $10,000 in student debt and more than a third admitted to over $30,000 in debt, according to Inc.

Even worse, 42 percent of those that had more than $30,000 in debt were women and 11 percent of millennials have over $100,000 in student loan debt. Unsurprisingly, credit card debt is actually even higher for millennials (at 46 percent) and car loans come in just behind student loans (at 34 percent). Then there’s also medical debt to think about, as well as the 20 percent of millennials who actually have a mortgage.

Some of us, like me, have debt in all of the categories.

When my husband and I met and moved in together just six weeks into our relationship, we did it because we were in love and knew we wanted to be together for the long haul.

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However, what we didn’t know at the time (and came to learn very quickly) is that we both came with a heaping amount of debt. Now, two and a half years into our relationship and nine months into our marriage, I can tell you that our debt has only increased: Collectively, we have around $150,000 in debt — about $100k of that in student loans, $40k in car loans, and another $10k in credit cards and medical bills. Add to that the fact that we just bought our first house and, well, our financial situation has gotten a bit more complicated.

It’s not easy to talk about finances, and it’s especially not an easy thing to do with someone you love. Sadly, money is often cited as a common cause of marriages falling apart — which is precisely why my husband and I are trying to tackle these issues sooner than later. I know that we won’t get out of debt any time soon, but having a secure financial plan is a good way to step into our future, together. So, shortly, after getting married, we decided to speak with some financial experts about how exactly to tackle our $150k in debt… WITHOUT driving each other crazy or stopping some of our other personal goals (like traveling together or having kids in the next couple of years).

Nora Dunn, a former Certified Financial Planner and blogger behind the financially savvy travel site, The Professional Hobo, told us that a lot of it depends on what we as a couple are earning and what our goals are. Dunn advised that my husband and I evaluate the importance of each of our goals. Was buying a house more important than taking vacation? How much did we expect to spend on a house based on the market in our area? According to her, it was all about taking an ‘everything in moderation’ plan, where we would examine our take-home income and expenses, and then divide our disposable income between different goals, depending on how our goals are prioritized.

After some discussion, we decided that prioritizing goals, and dividing our income accordingly, definitely seemed like a good place to start. In fact, Shana Bickel, CPA and Financial Coach, mirrored that advice when she told me that “it is not for me to tell the couple how to prioritize their financial goals.” The important thing, she says, is “to identify and get very clear about those goals and then develop a plan to pay off debt while saving for a home and allowing travel that makes sense for their financial health and well being.”

Another financial expert took a more straightforward approach.

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“Sell those cars!” said Lynne Somerman and The Wiser Miser. “If you’ve got big financial goals like this, there’s no situation where I can recommend $40K in car loans when you can buy a reliable used vehicle for $10K. Even assuming you still need two cars, that’s $30K that you’ve now got towards a down payment. After that, it would depend on the type and interest rates on the student loans. If they’re private loans, go aggressively after them. If the interest is higher than about 4-5% on the student loans, they’d be my next priority. If their income is high enough, you could do both here.”

However, David Rae, a Certified Financial Planner based in Los Angeles, has a more realistic approach.

“Get those cars paid off and drive them forever!” he advised. “You don’t need a new car every two or three years. My car is paid off, and I plan to drive it forever. Each of those car payments is like a trip to Europe each year. Would you rather have a brand new car or a trip to Europe?”

He’s definitely right about that, which is why we have made paying off our cars our #2 priority (after paying off our credit cards), since we’d also like to save for an international trip in the near future. Rae also reminds me that, although student loans are important, so is saving for retirement.

“The student loans are going to take a long time to pay off. Get serious about them, but make sure to contribute to your retirement at least enough to get a company match,” he said. “This will be like free money from your boss, and the government will give you break on your taxes.”

Meanwhile, Ashley Feinstein Gerstley, a money coach who runs The Fiscal Femme, said that it is all about opportunity cost.

“We can only use or spend each dollar we have once, no matter how much or little money we have,” she reminds me. “How can we use it in a way that will maximize our joy per dollar in the shorter and long-term? It’s about looking at each option and choosing consciously. If a couple is paying down their debt and that’s really important to them but they also want to travel, they might decide to let go of expenses in other areas to make that work. What expenses aren’t bringing them much joy? Would they rather live in a less expensive apartment for the time being so that they have more money to travel? When we take a look at each expense annually (including our bills) it’s much easier to see where our money is going and decide if we want to allocate it any differently.”

Taking a look at our overall finances, my husband and I were able to use this advice to devise some financial goals, set some priorities, create a payment plan, and figure out what we want to save for.

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It took some serious negotiating but we came away with a clearer picture of our finances. It’s not going to be easy, mind you. Having debt as a couple is difficult, but unfortunately, something that almost all of us face these days. If you don’t have student loans, then you might have a car payment or credit card debt or medical bills from that time before ACA when you didn’t have health insurance and ended up in the hospital (guilty!). But ultimately, the best thing you can do for yourself when it comes to your finances, whether you are coupled up or not, is to do the work to figure it out.

As Rae put it, “Get serious about your finances now — it won’t get easier when you have kids. You may make more money but you will be busier and tired. Parenting is hard. Just saying.”

The Supreme Court Ruled In Favor Of Allowing States To Punish Electoral College

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The Supreme Court Ruled In Favor Of Allowing States To Punish Electoral College

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News straight from the Supreme Court might just mean a more fair election this 2020. According to reports, the Supreme Court ruled in favor of allowing states to reprimand members of the Electoral College should they break a pledge to vote for their state’s popular vote winner for presidential elections. The decision comes heavily on the heels of the looming election season.

The decision was sparked after 10 of the 538 presidential electors made their own decisions in 2016 and voted for candidates other than the one they’d pledged to vote for.

Up until Monday, only 32 out of the 50 states as well as the District of Columbia had laws that discouraged “faithless electors.” At that time, none of the states had ever actually reprimanded or removed an elector based on their vote. The Supreme Court decision came with a 9-0 count.

“Today, we consider whether a State may also penalize an elector for breaking his pledge and voting for someone other than the presidential candidate who won his State’s popular vote. We hold that a State may do so,” Justice Elena Kagan wrote.”The Constitution’s text and the Nation’s history both support allowing a State to enforce an elector’s pledge to support his party’s nominee — and the state voters’ choice — for President.”

In 2016, three presidential electors in Washington state voted for Colin Powell over the popular votes push for Hillary Clinton. Another voted for anti-Keystone XL pipeline activist Faith Spotted Eagle. At the time, Washington’s Supreme Court upheld a $1,000 fine.

In Colorado, during the 2016 election, Micheal Baca attempted to vote for John Kasich instead of Clinton but his vote was rejected. He was removed and replaced and referred for a potential perjury prosecution. No charges were filed, however. According to CNN, Baca “filed suit, and ultimately won when the 10th US Circuit Court of Appeals held that while the state does have the power to appoint electors, that does not extend to the power to remove them.”

Oddly, Frodo Baggins, the beloved hobit from the Lord of The Rings trilogy became a part of the court’s historical record during oral arguments.

According to reports, Justice Clarence Thomas used Baggins as an example “The elector who had promised to vote for the winning candidate could suddenly say, ‘You know, I’m going to vote for Frodo Baggins. I really like Frodo Baggins.’ And you’re saying, under your system, you can’t do anything about that,” Thomas asked.

During the case, Justice Kagan went through the history of the Electoral College and spoke about the presidential election of 1796. The election was the first contested presidential election in the United States and saw John Adams come in first and Thomas Jefferson second. “That meant the leaders of the era’s two warring political parties—the Federalists and the Republicans—became President and Vice President respectively. (one might think of this as fodder of the new season of Veep),” Kagan wrote.

Kagan also referenced Lin-Manuel Miranda’s Broadway musical “Hamilton” nothing that “Alexander Hamilton secured his place on the Broadway stage—but possibly in the cemetery too—by lobbying Federalists in the House to tip the election to Jefferson, whom he loathed but viewed as less of an existential threat to the republic,” she wrote. Justice Thomas agreed with Kagan writing “nothing in the Constitution prevents States from requiring Presidential electors to vote for the candidate chosen by the people.”

Here’s hoping this new change in the Supreme Court ruling ensures a better election outcome.

Virginia Announced Their Official Ban On Natural Hair Discrimination

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Virginia Announced Their Official Ban On Natural Hair Discrimination

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After quarantine, it’s time to break out those rizos and head to Virginia!

Earlier this year, in March, Virginia became the latest state in the country to pass the aptly named Crown Act. The new law, which was signed by California, New York, New Jersey, Maryland, Colorado, and Washington earlier this year, prohibits workplaces and education programs from discriminating against natural hair.

Virginia is officially the first southern state to end the discriminatory practice of preventing Black men and women from wearing natural styles.

The legislation officially went into effect last week on July 1 and makes it illegal for workplaces and educational institutions to discriminate against people who wear natural hairstyles like Afros, curls, or locs. Delores McQuinn, a Democrat who is a member of the Virginia House of Delegates sponsored the bill and praised its establishment saying “A person’s hair is a core part of their identity. Nobody deserves to be discriminated against simply due to the hair type they were born with.”

The Crown Act stands for Create a Respectful and Open World for Natural Hair and first got attention this past February when director Matthew A. Cherry won an Oscar for his film Hair Love.

The short film showcases the love between a Black father and his daughter who teach each other how to style her natural hair. The director gained attention when he invited Texas high school student, DeAndre Arnold, to be his guest. Arnold had been kept from attending both his graduation and prom for wearing locs.

“There’s a very important issue out there, The CROWN Act, and we can help to get this passed in all 50 states, which will help stories like DeAndre Arnold’s to stop happening,” Cherry said at the time during his Oscars acceptance speech. 

Lawmakers say that while the Crown Act has not yet been filed in Texas where Arnold is from they are considering have it passed there.

Of course, while ending natural hair discrimination against Black people is a small step it does mark an important effort to dismantle systematic racism. You can help get The Crown Act passed in your state by signing this petition pushing for change.