Open Question: Discouraged - Need a financial plan for the future?
I want to start saving for a down payment for a house. I want to start investing in a retirement plan. I have no savings at all.
I currently make about 3K each month after taxes (I work at a firm that pays less than competitive wages with no benefits, but I get great experience - I probably will change jobs next year for higher pay). Rent is 800/month (I live in LA). I have excellent credit (score is 770), but I owe 55K in federal consolidated student loans. I also owe my mom 130K (I pay the home equity line directly) that was used to pay off my private student loans. I don't have any significant credit card debt.
My mom, understandably, would like me to pay off her home equity loan first. While I do want to, the sheer amount is discouraging. I pay about 600/month in interest alone.
Ideas? I want a plan with milestones. I kinda wanted to be able to buy a small house in the next 5 years. My debt is so overwhelming that I almost disregard it as being permanent and unchangeable.
My mom used her home equity line to pay off my private student loans. She can deduct the interest on her taxes, and I can take advantage of the lower fixed interest rates. When I can, I have made extra payments towards the principal.
Moving home is not an option, as I live about 8 hours away since jobs are more scarce there.
I expect that next year, if I changed jobs, I could probably make about 70-80K/year (which is the competitive wage for my position).