Andy Hough

Law School Loan Forgiveness and Income Based Repayment

by

I wrote a post about law school loan forgiveness and income based repayment back in March. At that time both were still proposals but back in October they became official after being passed by Congress.

It is nice to know that if I do 10 years of public service that my law school loans will be forgiven. It is even nicer to know that my loan payments will be capped at 15% of my income above 150% of the poverty level and any remaining balance will be forgiven after 25 years. I hope I’m not still paying on my student loans in 25 years but it is good to know that my payments will be capped at a level I can easily make.

The only drawback is that if I have loans forgiven they will be treated as income for that year. That would most likely result in a huge tax bill. I’m not going to worry about that for now though. If it appears likely that I will have my loans forgiven than I’ll come up with a strategy for dealing with the taxes at that time.

Frugality and Relationships

by

A commenter yesterday asked how my girlfriend deals with my lack of spending. My reply started to become rather lengthy so I am posting on the subject as well.

My GF is relatively frugal when compared to how most people spend their money. Compared to me she is not that frugal. I realize that my level of frugality is not what most people are accustomed to. I’m not going to change my frugal ways though. At least not much. In any relationship you have to compromise some and we have both made some compromises. She has become slightly more frugal and I have loosened up on my spending a little. Money hasn’t been a problem so far because we keep our money separate. It could become an issue eventually depending on what happens with our relationship.

Since I am now living with my GF money is more of an issue than when we were just dating. I pay her an amount roughly the same as I was paying for my apartment towards our household expenses and she pays all the bills. I suppose some could question whether this is a fair arrangement since I’m paying less than half the household bills. I do pay more than what my living with my GF is costing her though. We are both happy with this arrangement and that is what counts.

I don’t think there is a standard formula for dealing with money for couples. Couples just need to discuss the subject and come up with their own solution.

Reviewing My Income and Expenses

by

Jacob at Early Retirement Extreme is having a 30 Day Early Retirement Extreme Makeover.   One of the goals of this makeover is cut your expense level to $10,000 or less a year.  I thought I was close to this goal already since I try to keep my monthly expenses at $1000 a month or less and I knew I was below that level a few months this year.  After reviewing my expenses for the year I realize I’m farther away from the $10,000 goal than I thought.  Although I did have some months below the $1000 level I had more months above the $1000 level.  I’m estimating that my total expenses will be about $15,000 for this year and  my total income at about $12,000.  This is not as good as I thought but that is part of the reason why I track my income and expenses; so I can review them and tell how I’m doing.

Looking at my expenses my budget busters are transportation and entertainment.  The transportation category is somewhat misleading because I drove my car delivering pizza most of the year.  Some of that expense should really be a deduction from income.  Still there is plenty of room for improvement in the transportation category and I will be making some major changes there.  Some of the increase in my entertainment expenditure is from having a GF but most of it was just the result of stupid decisions on my part.  This expenditure can easily be reduced just by choosing more free or low-cost options for entertainment.

Since the new year is almost here I’ll go ahead and set a couple goals now.  The first is to have my expenses under $10,000 next year.  The next is to have my income higher than my expenses.  These are reasonable goals and I will be planning specific measures to achieve them.

Law School is Over for the Semester

by

I had a final Monday and another final Wednesday and that was it for the semester. I have to do a little work for my clinic but I am basically done until next semester starts. I wish I could say that I’m confident that I did well enough on my tests to stay in law school. I feel okay about one of them but I’m worried about the other one. I don’t have a high enough GPA to bomb on a final and still maintain the minimum GPA for law school. It has always been very difficult for me to gauge how well or poorly I performed on a law school final. I’m hoping that I did good enough on the final but all I can do now is wait. Unfortunately, I will probably be waiting for a while. Based on my past experience I probably won’t receive my grades until after the next semester starts.

On a positive note, if I do manage to stay in school my next semester will be easy. I only have 9 credits and they are all pass/fail. I will have to do my 30 page R&W and I’ll have to actually appear in court for my clinic. Those are both things I’m dreading so next semester won’t entirely be a cakewalk but compared to my other semesters it will be pretty easy.

Is Frugality Becoming Trendy?

by

With the economic downturn tightening budgets I have seen several articles discussing how frugality is now becoming cool. They usually support this claim with a few anecdotes from ordinary citizens. Based on my own observations I doubt that frugality is actually becoming cool or even becoming much more socially acceptable. There are more people becoming frugal from necessity or perhaps because they are worried about the economy. They aren’t becoming frugal because they want to though, they are becoming frugal because they have to or because they feel that they need to be frugal due to the economy. Perhaps people will discover that a frugal lifestyle is a good choice regardless of whether it is necessary. My guess is that once the economy recovers the vast majority of these people will abandon their frugal ways and return to being regular consumers.