We are the median: Burdened by student loan debt

Dec. 14, 2011 at 7:25 AM ET

Brandon Thibodeaux for /
Samuel and Megan Moss stand in their kitchen with their 10-month-old daughter, Mary Margaret, at their apartment in Plano, Texas.

With careful budgeting, Sam and Megan Moss are able to get by on their combined salaries of about $50,000 a year.

But the couple is weighed down by around $110,000 in student loan debt that Sam, now 28, accrued while they were students at University of Mississippi.

Megan, 25, says they don’t want their 10-month-old daughter, Mary Margaret, to be burdened by such high debt when she goes to college. That’s one reason the Plano, Texas, couple is unsure whether they will have more children.

“I would love for her to have siblings … but I don’t see us being able to afford it,” Megan said.

Megan works full-time in sales for a hotel company, while Sam is in the mortgage industry.

What's it like to live on around $50,000 a year?

It is a challenge. It definitely takes planning and budgeting to make everything work.

How has the weak economy affected your finances?

We have been affected simply through the rising cost of living. Everything is more expensive, from gas to groceries to utilities.

Do you worry about money?

I'm not worried about the everyday, for example not being able to put food on the table or buy diapers or gas, but I worry about emergencies.  I worry that our cars, which are both older models, might give out on us and we don't have the extra cash flow to fix (them). I worry about something happening to one of us that makes us unable to work, or in some way negatively affects our job situation.

What are your biggest expenses?

Our biggest expenses are rent, student loan payments and daycare. We pay about $550 a month on Sam’s student loan payments. Our daycare bill every month is close to $800; it is a mortgage payment for some people.

We could probably find a cheaper apartment to live in, but it is worth it to us to pay a little bit more and not have to worry about the neighborhood we live in, or commute too far to work. We both drive less than three miles to work every day.

What do you splurge on?

We splurge on our cable, because it is our entertainment. And occasionally we will go to a movie or out with friends if my parents are available and willing to watch the baby for us. We also splurge on stuff for the baby.

Brandon Thibodeaux for /
The Moss family

What kind of debt do you have, and do you find it hard to pay off your loans or other debts?

Sam has student loan debt, quite a bit of it. It averages out to about a $500+ monthly payment.

 I am lucky enough to have a grandfather who is generous enough to pay for my education (as well as my three brothers and my cousins). It was (and still is) the best gift I have ever been given, other than my daughter. I don't know if I will ever be able to fully thank him or show him enough gratitude for what he has done for me.

We also have (around $2500 of) credit card debt that we got into while I was on maternity leave for three months. We pay minimum monthly payments for those every month, and plan to use our tax refund to pay those down completely.

Are you able to save money for the future?

Right now, unfortunately, we are not able to. We have plans though to put the money that has been going to credit card payments into a savings account when we pay those off. 

What are you most proud of in terms of your financial situation?

We own both of our cars. We have steady jobs, with growth potential in the near future.

 Are there any financial mistakes you think you've made?

 I’d say our biggest mistake is not saving the money we had to spare before the baby was born. We didn’t plan as well as we would have liked, financially, before her birth. Hindsight is always 20/20, though.

Over the next few years, do you expect things to get better or worse for you financially?

I hope things will get better for us. We both have the potential for growth in our careers, and we are lucky enough to work in companies that offer those opportunities.

Right now, I would say we are on the right path for success. However, Sam’s loans are on an adjustable rate, and when rates go back up it could really make things more difficult.

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