Bob

This can be a sticky point for johnny foreigner, unless they've been here long enough to get citizenship, they're often not eligible for many of those handouts, which can make education that much more expensive.

nun

A least MA is making the effort to get all it's residents insured at reasonable prices. I don't necessarily like the approach, or linking health insurance to employment, but even in liberal MA government single payer insurance would be hard to implement. The US just has some no go areas and anything that smacks of a socialism, ie shared cost according to ability to pay, just won't fly

Day care is private and is expensive, Kindergarten is provided in schools and the cost is subsidized

Cost for UMASS is $18k tuition room and board. Harvard is another matter, total cost including tuition room board etc is close to $50k, but with the tuition reduction it goes down to as low as $15k for families earning less than $60k. This can be further reduced through grants and low interest loans.

Bluegrass Lass

When I left school, I had $55k in student loans -this paid for a BS and Masters in Engineering. And I went to a state university, not a private one, and lived with family since I couldn't afford a place of my own. I had no assitance from my parents, and even though my folks were divorced, and my mom only made $22k/yr, I still couldn't qualify for any grants. They still expected her to contribute some $$ to my education, even she still had my younger brother to take care of.

Four years later, I'm still paying on them, and my balance has only gone down by about $1500. I'm at a 3% loan for 25 years. If I take that long to pay it off, I think I will have repaid close to $100k. So education costs are astronomical here, even if you don't attend an Ivy League or top rate uni. So I can't do anything but laugh when I see people say, 'oh those poor grads, they still have to pay off £10k in loans!' And if you think $55k is bad, just look at the debt doctors graduate with!

Sorry..I don't think this post contributed to the thread really. Just sharing my experiences. I'd love to be able to retire at 55, but with social security being a not so good payment, and medical costs being what they are, I just don't see how that will be possible.

robin1234

One thing I've observed about Americans in general (this is NOT a comment on anyone here at BE, & I recognize that everyone's situation is unique..) is that folk who complain they don't have enough money to spend often regularly spend money unnecessarily.

OK, that's a personal choice, but I believe real freedom comes not just from the U.S. Constitution but from freedom from debt, having financial obligations that are regularly less than income. Let's say, for instance, you've paid off your mortgage, your student loans & your children's student loans, have no car payments, and have $500,000+ in your 403b (or equivalent,) then I'd judge you'd be well placed to move to the UK if you wanted, retire early, switch from full-time work to consulting, or whatever.

Examples; do you need a TV, or cable/satellite service, etc.? I'd say no, it's an unnecessary luxury. Do you give Christmas/Hannukah gifts? again, this is not a necessity. How about heating/air conditioning costs? I'll bet many people could save $1000 a year or more if they adjusted the thermostat. Cell phone? Unless you need it for work, do you really need it? You buy books and music CDs? The public library, radio, and (FREE) streaming music via the internet are better alternatives. etc. etc.

Giantaxe

With inflation being higher than 3% and interest presumably being tax-deductible, that's actually something of a bargain. Many graduated I know are stuck paying far higher rates as they couldn't get federally subsidized/guaranteed loans.

nun

Robin1234, I generally agree with your point, but wouldn't exclude the British or the majority of the developed world.

I almost did a double take when I read your second paragraph as it nicely sums up my grand plan, although the nest egg would be bigger.

Also as you live in upstate NY I don't think heating costs are a thing to skimp on

Bluegrass Lass

I think I got in on the last year that they had the 3% rate. I consolidated all of my subsidized and unsubsidized loans at that rate, even though some were at a rate of 7% or 8% when they were originally disbursed. The rate is great, but I just wish my balance wasn't that high! Hopefully, if OH and I can weather the economic storm, and maintain our jobs, we'll have it paid off in about 2 1/2 more years - if we buckle down on our excess spending in other areas and get other debt paid off.

Dan725

Agree with you in principle. But some of your examples are a bit extreme - no pressies at Christmas? Bah, humbug cable unnessary? Then how do you stream the "free" music from the net you mentioned? $1000 electric bill savings on the thermostat? For us that'd be about 40% of the entire years electric bill....would probably have to turn it off completely to get that saving.


But I still do agree with the principle of what you are saying!

Bluegrass Lass

We only pay about $1200-$1500/yr, so we'd either be freezing or sweating certain body parts off!

But Robin's point is well taken. That is a prime problem with a lot of people.

Giantaxe

That student loan would be the last loan I would be paying off. You effectively have a negative real rate of interest.

Bluegrass Lass

So, in that case, would you pay off a $180k mortgage before paying that loan off?

I had to look up what you mean by 'negative real rate of interest'. I never looked at that loan that way before.

robin1234

NORTHERN New York, not Upstate. "Upstate" is places 200-300 miles south of here, like Poughkeepsie or Schenectady Here's the thing about heating. Our home heating oil supplier has tried to deliver oil here three time so far in October & November this year. Each time, he manages to deliver somewhere between 1 and three gallons... because we've only had the heat on a few hours yet. This leads me to think that my neighbours are using their central heating extensively, leading the supplier to make frequent deliveries. Now, we've had some pretty chilly weather, but it's only mid-November ... so it is typically going up to the mid-forties during the day, and the coldest it's been at night has been 20 degrees. In my judgement, we don't yet need heat.

Giantaxe

You should calculate the after-tax effective interest rate of each loan and see which is the lowest. Unless you still have some kind of teaser rate on your home loan, I doubt the after-tax rate for your mortgage is going to be lower.

robin1234

We have never celebrated Christmas/Hanukkah or the generic "holiday season." So no relatives or friends have expectations to be disappointed. Our kids don't seem to have missed it.

We don't have any TV, cable or satellite. We get Netflix, $20 per month. But for internet we get the DSL from the phone company. We have local phone service + internet for about $50, which means the internet is about $20 because I think the phone used to be about $30.

We enjoy unlimited streaming BBC Radio 3 and Radio 4, courtesy of the UK TV License payers. (Thousands of other radio stations, too, but those are the ones we mostly use.)

Bluegrass Lass

Wow...do you turn the lights on at night, or do you sit mostly in the dark? In all seriousness, we recently also cancelled the cable (only have 'basic' channels now). The bill went from $170 to $85. And we plan on getting a programmable thermostat to control energy costs. I agree that most people need to really look at those 'necessities' and evaluate what they really need. They'd probably get a huge shock to realize just how much more they could be saving if they got rid of them.