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Pay Down My Debt

In Debt and Pregnant. Now What?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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I got pregnant when my husband and I were nearly $300,000 in debt.

Although it sounds crazy, I did it on purpose (both accumulating debt and getting pregnant that is.)

I wish I could say I had a super fancy Bentley parked in my driveway to have something to show for that high number, but really it’s all in our brains (which have lately been fried due to intense sleep deprivation.) To clarify, what I mean to say is all of our debt is student loan debt.

Sometimes people will say that education debt is “good debt,” and if that’s the case then we have really, really good debt. Our $300,000 student loan debt includes two master’s degrees – one for each of us – and three years of my husband’s medical school tuition. Unfortunately for us, we’ll probably be tacking on another $50,000 to it before he graduates from medical school in 2016, bringing the total number up to $350,000 and possibly even $400,000 since it’s actively accruing interest (fun right?)

Of course, my husband and I don’t actually believe that student loan debt is good debt. For most people, student loan debt cannot be discharged in bankruptcy (although according to U.S. News, in rare cases it actually can.) So, that means most people will have to pay back every penny of their student loans even if they encounter significant hardships. Basically, not only is our $300,000 of student loan debt burdensome, it’s downright scary.

Yet, being in debt didn’t stop me from actively trying to get pregnant, and it shouldn’t stop you if you have the three traits below.

1. Financial Discipline

Even if you have significant debt, I believe it’s fine to make big life choices like buying a house or having a child as long as you have financial discipline. You need to be the type of person who is acutely aware of their debt, not someone who is too scared to look at the number. If you can face your debt head on and have the ability to stick to a detailed financial plan, you can definitely make room for some of life’s biggest changes liking bringing adorable, stinky babies into the world.

Financially disciplined people track spending, create budgets, understand their cash flow, and do not live paycheck to paycheck. Their student loan payments are just another line on their budget that they carefully pay attention to and try to tackle each and every month.

For some people, like Kirsten at Indebted Mom, biology plays a factor into the decision to have children as well. Although Kirsten has significant student loan debt like I do, she was not willing to risk the possibility of not being able to have children due to her age. “It would have been nice to pay off debt first, but if we’d waited to pay off all our student loans, I probably wouldn’t have been able to have children,” says Kirsten. In order to tackle her high student debt, Kirsten remains employed as an aerospace engineer and makes extra money on the side through online writing jobs.

2. Extreme Hustle

When my husband and I decided we wanted to start our family, we knew that we needed to create a large savings account for our baby. Between hospital costs, baby gear, and other necessities, we knew babies were expensive. Thinking of a worst case scenario where would have to reach our $4,000 out of pocket max for our health insurance policy, we decided to save $10,000, which would hopefully leave some money left over to start a college fund.

Of course, with my husband being a student, the only real way to create $10,000 out of thin air was for me to hustle. I was already bringing in extra money from online writing jobs, but I decided to double my efforts. I took on new clients, e-mailed people tirelessly asking if they had work, and spent many, many nights staying up until one or two o’clock in the morning doing extra work. Every time I got a PayPal deposit from one of my new clients, I moved it right over to my Smarty Pig high yield savings account for our future baby.

[You can see the latest high rate savings account deals here]

Of course, the joke was on us. I got pregnant just a few months later, and much to our surprise, we found out we were having twins. We used every penny of that $10,000 savings since both of our children spent time in the NICU. I was so glad I had that savings account; otherwise, we would probably be in credit card debt right now too.

Of course, if you are in debt, there is the obvious option to wait to have children or not have children at all. Many people, like Kali Hawlk of Common Sense Millennial, decided not to have children, saving them hundreds of thousands of dollars in child rearing expenses over the course of two decades. This is certainly something to consider if you are in significant debt and are not equipped with the income or the tools to successfully handle paying off your debt and raising children at the same time.

Kali explains that, “If you can’t take care of yourself financially, you aren’t prepared to adequately provide what a child deserves,” and I agree with her. Children don’t need every toy or baby gadget on the Earth to be happy, but they do need basic necessities like food and a roof over their heads, monthly bills that can come into jeopardy if you are unable to make regular payments on your debt.

3. Ability to Handle Adversity

As anyone will tell you when he or she is dealing with large amounts of debt, there’s no such thing as a nice, linear payoff schedule. Life happens, things come up, and often you have to make hard decisions about just how much debt you want to pay off each and every month.

For us, the biggest shock of course was finding out we were having two babies, not one. To me, at 26 years old, I felt like I could handle one baby. I felt like my income, the funds I saved, and my general life experience meant I could be a good mother to one baby. However, the day I found out there were two, I spent an hour sobbing in the shower that night. Simply put, I was terrified. I was scared of everything like losing one or both of them since the pregnancy automatically became high risk. I was also worried how I was going to afford both of them with my husband still in school, and of course, I had tons of vain thoughts about how my small frame was going to carry two kids as long as possible throughout the pregnancy.

But, like all the other times in my life when I handled unexpected events, I pulled myself together and continued to work on a plan. I knew that if I could just work a little bit harder, not only could I be self-employed but I could also cut out the significant childcare expenses that two children bring by staying home with them myself.

That, of course, is exactly what I did. My boy/girl twins are 7 months old now, and I have been self-employed for almost a year. It hasn’t been without its difficult moments, that’s for sure, but because of hard work, financial discipline, and planning, we’re still on track to pay down our debt and ensure our children have everything they need to grow up happily and healthily.

You Have Nine Months to Prepare

If you are in debt and pregnant, there’s nothing stopping you from using this time to get your finances organized and develop a plan. The best thing you can do is, of course, reduce your expenses and raise your income. Trust me, I know it’s challenging to ask for a raise or take on extra work when you’re hugely pregnant, exhausted, and have to pee all the time. I’ve been there. But, your children are worth it. Their safety and security is worth it.

Essentially, if I can do it, you can do it. Take the steps now to work on developing the three qualities I mentioned above: discipline, hustle, and handling adversity. Luckily for you, children bring immense joy and happiness, and you’ll find having them is the best decision you’ve ever made – with or without your debt.

Want regular updates about the best financial products out there? Then sign up for our Price Checker Newsletter. Twice a month, we’ll deliver the best-of-the-best right to your inbox.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Cat Alford
Cat Alford |

Cat Alford is a writer at MagnifyMoney. You can email Catherine at [email protected]

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Apple Pay: The Future of How to Buy Everything?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Last week, Apple released iOS 8.1 and along with it, its new mobile payments platform, Apple Pay. Apple Pay isn’t the first of its kind; companies like Google have provided the option to pay using your phone for years. Apple Pay however, is the first mobile payments service available to those that have the iPhone 6, or 6 Plus.

Right now, Apple Pay supports Visa, MasterCard, and American Express, in addition to a handful of national banks. If you have a smaller bank or credit union, chances are you’re out of luck for now. However, Apple says that 500 more banks will be on board by next year and notably Barclays, Navy Federal Credit Union, USAA, US Bank and PNC will be on-boarded later this year.

Getting set up on Apple Pay is easy

Once you’ve installed iOS 8.1 on your iPhone 6 or 6 Plus, you simply add your credit cards to the service. Adding your card is as simple as taking a picture of it. The iPhone 6 camera will grab your card number and expiration date automatically. Once you’ve snapped a picture of your card, you just confirm the information, add the security code from the back of your card and you’re good to go!

Some banks like Bank of America may require a quick call to customer service to confirm. But all in all, that’s really all there is to it.

Start paying using your phone

Once you’ve gotten Apple Pay set up, and added your cards onto the service, all that’s left to do is test it out.

According to Apple, there are 220,000 stores and retailers that support Apple Pay. The mobile payment platform also works with mobile shopping apps.

Purchasing an item at Apple Pay’s launch partner stores, like Duane Reade drugstores and Macy’s, is as simple as holding the iPhone 6 in front of the credit card terminal and using your thumb to authenticate the purchase.

If you’re a city dweller, you’ll even be able to use Apple Pay to pay for cab rides. Apple Pay is fast and seamless, you don’t have to open an app, enter a PIN, or even wake your iPhone up from sleep mode. You just wave it in front of the pay terminal and authenticate the purchase with the Touch ID button.

Credit card security concerns

With countless retailers being hacked for our personal data, consumers naturally have reservations about this innovative new way of making purchases. However, with Apple Pay, the credit card data and fingerprint authentication are stored on a secure chip on the iPhone itself, making it much harder for a hacker to access any personal information.

Your name, credit card number, and security code are never shown to the retailer where you are shopping. In fact, Apple Pay could be making a difference in credit card security altogether. Only time will tell, but if so, this could be the most revolutionary part of the whole platform.

Technical difficulties

With all new technological advances, there are glitches.

According to CNN Tech reporter Samuel Burke, some users have reported being charged twice for single transactions made with the mobile payment service. Burke himself claimed that he was double billed for every Apple Pay purchase made with his Bank of America card. Multiple Twitter users reported the same problem, and coincidently seem to be banking with BofA.

Bank of America claims Apple Pay is responsible for the technical issue. However, in a recent statement, Bank of America apologized for the glitches and agreed to reimburse all duplicate charges made with Apple Pay. Apple on the other hand have no way of authenticating these reported duplicate charges because for security reasons, the company does not store any of its user’s personal data. Apple assured iPhone 6 users that a quick fix to this problem is underway.

The bottom line

Apple’s mobile payments service has some success, and some failures. Though Apple Pay is simple to use, there are still many places where mobile payments systems aren’t accepted, so don’t plan on leaving home without your wallet anytime soon. Until then, do get used to paying with your phone because the convenience of a mobile wallet will soon eclipse the use of cash and credit cards in the near future.

Want regular updates about the best financial products out there? Then sign up for our Price Checker Newsletter. Twice a month, we’ll deliver the best-of-the-best right to your inbox.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Kelly Harry
Kelly Harry |

Kelly Harry is a writer at MagnifyMoney. You can email Kelly at [email protected]

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Fine Print Alert

Fine Print Alert: You Can Easily Deposit Cash Into an Internet-Only Bank Account

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Clearly, you’re a person who wants to be in the know. May we suggest you also sign up for our Price Checker Newsletter. Twice a month, we’ll deliver the best-of-the-best in financial products right to your inbox.

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In our weekly Fine Print Alert newsletter we call out any good news from the financial community and shine a spotlight on any sneaky changes in the fine print. We also share our favorite reads from the week.

FINE PRINT ALERT

 

Hurrah! Cash deposits are possible for Internet-only banking… 

Capital One 360 customers can rejoice. It’s now possible to deposit cash into your Internet-only bank account.

The bank recently announced that by year’s end, all Capital One ATMs that accept cash deposits will allow Capital One 360 customers to deposit cash into their Internet-only accounts. Customers will also be given same-day access to their cash deposits.

Hopefully, this means other Internet-only banks will be offering similar options in the not-so-distant future. Currently, the inability to deposit cash is the more-or-less the only major issue with Internet-only banking.

Thanks to Yahoo! Finance reporter Mandi Woodruff for sharing the news on Twitter. Cap360_cash

Huzzah! @capitalone360 is finally letting customers deposit cash at ATMs. pic.twitter.com/MNHrlZZhuy

— Mandi Woodruff (@mandiwoodruff) October 20, 2014

 

Naughty, naughty Ocwen….

Just when you thought Ocwen, a mortgage servicing company, couldn’t get any worse, we find out they’ve been backdating foreclosure letters to borrowers!

There are restrictions on how much time a borrower has to appeal a letter. When Ocwen backdates the letter, they make it impossible for an individual to appeal. That speeds up the foreclosure process for Ocwen. And it is evil.

If you have a mortgage with Ocwen and are experiencing issues, you should complain directly to the CFPB at www.consumerfinance.gov.

If you are eligible for a claim from Ocwen, make sure you file. We have a guide on how to file here.

 

And in good news…PenFed Promise Visa gets an A+

This week, we announced our first A+ Transparency Score. At MagnifyMoney, we want to reward simple, transparent products. So, we designed the Magnify Transparency Score.

The PenFed Promise Visa has stood out above the rest thanks to:

  • A single, flat, low APR of 9.99% on purchases. You know the interest rate before applying. Most banks provide a very wide range of available interest rates, and you only know your rate after you apply. PenFed Promise discloses the APR up front.
  • There is no foreign transaction fee
  • There is no annual fee
  • There is no late fee, returned payment fee or risk-based re-pricing
  • Terms and conditions fit on one page!

Congrats to PenFed! We love when a credit union gives big banks a run for their money.

Find out more details about the Promise Visa and how it stacks up to competitors here.

Great reads from around the web

  • Parents pay the price for children’s student debt – “When Steven and Paula Bonney took out $115,000 in loans a decade ago to put their two daughters through school, it was more than they ever thought they’d have to borrow. But they expected to be debt-free at this point in their lives. Now, in their early 60s, any dreams they had of retirement are buried deep under a mound of debt.” – Yahoo Finance’s Jeanie Ahn shares the story.
  • Apple Pay’s double trouble – “Some users, including CNN’s Samuel Burke, have been getting charged twice for transactions made through Apple Pay.” – CNN Money
  • Experts: Do You Need a Budget? – “There aren’t many financial words that make me cringe more than this one: budget. Nobody wants a budget. It is restraining, and is something most avoid like the plague. But do you need a budget to become wealthy? Well, the experts weigh in on this along with their reasons why, as well as how to create a budget that works.” – Austin Netzley of YoPro Wealth interviews various experts about the need for a budget.
  • Vanishing Options, Overreacting, and other Stock Market Observations – “Well, the recent volatility in the markets here in the U.S. have garnered some attention in the news lately. After surging forward for much of the year, aside from a few pullbacks here and there, the market had some down days last week. It’s almost as if a game of musical chairs was being played, and the music suddenly stopped. The bull market party was seemingly over – or, at least on hiatus until yet another one-day rally.” The “Squirrelers” of Squirrelers make some great observations about people’s reactions to the stock market.
  • Is Your Teen Ready for a Checking Account? – “A checking account can teach them how to use ATM cards, debit cards, and even checks responsibly while they are still under your direct supervision (as opposed to when they go off to college and aren’t…)” – Jackie Beck of MoneyCrush tackles the important factors involved in deciding if your teen is ready for a checking account.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at [email protected]

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