Student Loan Debt and Starting a Family: How to Afford Both

Do you have student loan debt but also want to start a family? Both higher education and kids are notoriously expensive, and you might be feeling the squeeze of a repayment plan or anticipate the upcoming tightening of your finances if and when federal loans pick up again.

It’s no secret that student loan debt has been an ever-growing burden for the next generation of borrowers. When it comes time to start families, the monthly payments from a college degree can feel like a wet blanket that sucks up money and makes cost-intensive things like having kids or buying a house feel forever out of reach.

It’s no wonder, the picture of college debt for an average grad is not a pretty one. Here’s a brief look at the average American student loan borrower:

Student Loan Statistics:

• Typical student loan balance at graduation: $31,000 (source)
• Average student loan interest rate: 5.8% (source)
• Original loan repayment timeline: 120 months, or 10 years
• Time it actually takes borrowers to repay loans: 20 years (source)
• Average monthly student loan payment for someone with a Bachelor’s degree: $448/month (source)

With the current federal student loan pause from the pandemic, it might be a welcome relief and feel like an opportunity to finally get ahead and save money. Others might wonder if they should refinance for a lower monthly payment (and interest rate), but possibly lose some of the federal protections. Others might be pursuing a forgiveness program like public service loan forgiveness if they work in public service, but even that can feel like shaky ground. Some might just get overwhelmed at all their student loan repayment options to feel like it’s all forever out of reach.

But let’s move past the doom and gloom. You’re not just a statistic, and you’re also not condemned to being held back by these two competing priorities for your money.  

In fact, here’s a real story of real people who figured out a way to afford both student loan debt and starting a family without making a crazy household income.

How This Couple Started a Family With Student Loan Debt

Jaklin and Ryan are in their twenties—she is a customer service representative while he is a full-time student and works part-time at Walmart. Together, they have two boys, ages four and six. They have $89,000 in student loan debt.

Since they began using YNAB three years ago, Jaklin and Ryan have:

• Paid off $14,000 in debt (Their $89,000 debt is now $75,000, and they’re on-track to pay it off, in full, in just a few years).
• Increased their net worth by $24,700 (Rising from -$85,400 to -$60,700)
• Kept at least $2,000 in savings for the past year
• Contributed to their retirement fund
• Avoided overdrafts—and the dreaded fees—for the past three years (at one point before YNAB, they had seven in a single month!)

How’d they do it? They’ll tell you.

A Humble Start

“The day we got married, we had exactly $400 to our name. Two weeks later, we had our first son. And two weeks after that, we packed everything we owned into our Ford Taurus and moved five hours away, across state lines, to go to a private college,” Jaklin said.

To survive, they applied for student loans and got financial aid. “We just took out the maximum number of loans and lived off of that. I got a student job that paid a student wage, making about $350 a month. We were exhausted all of the time and constantly yelling at each other about finances. Then we got pregnant with our second son. That was our reality check—we needed to do something and fast.”

It Was Time to “Adult Up”

To make ends meet, Ryan stopped classes and, instead, worked full-time as a cashier.

As for their personal finance situation, it was still tight. Their monthly expenses came to about $1,000, but their combined income—including student aid—was only $850. It was tough but, as Jaklin said, “We felt that it would be taking an even bigger step backwards if I were to quit school.”

It was clear that they needed a budget, but unexpected expenses, such as overdraft fees, their license plate renewal or glasses for their older son always seemed to mess up their plans. And retirement savings? That wasn’t even on the radar.

We would just give up for the month and [plan to] start over, again, next month. Finally, we sat down and decided that we were not going to make any more excuses. It was time to adult up.

We Tried Different Budgets

With $89,000 in debt, Ryan and Jaklin got busy. First, they tried budgeting with good, ol’ fashioned pen and paper. Jaklin said, “We found that unexpected expenses would trip us up, and we’d have to erase, erase, erase.”

Frustrated, they moved on to Mint, but that didn’t work for them, either. Jaklin said, “All of our progress would be erased at the beginning of each month.”

Then, they tried EveryDollar. Nope. As Jaklin said, “It was monotonous.”

They even tried using Excel, but that proved too time-consuming to maintain.

We Tried YNAB

When they (finally) tried YNAB, the first thing that struck Jaklin and Ryan was how flexible it is—both the app and the Four Rules. If something unexpected pops up, all is not lost! They can lean on Rule Three: where they roll with the punches and shift their budget around.

Jaklin also loves YNAB’s spending reports, the ability to see her net worth at a glance and set savings goals and the ease of direct import. She said, “I call it ‘syncability,’ and I love that particular feature so, so much. And, yes, I just made up that word, and I use it all the time.”

To keep tight tabs on exactly where they are in the budget, Jaklin and Ryan also enter transactions on their phones. Jaklin said, “We can put in a transaction and, then, BAM! it’s adjusted. If we overspend, it’s an easy adjustment. It’s a reality check on what we are doing in the here and now so that our future can be what we want it to be.”

We Don’t Have Financial Stress

Once they’d gotten into the rhythm of budgeting, a funny thing happened. Jaklin and Ryan stopped feeling so stressed about money. Jaklin said, “I used to think that money was evil because there was never enough around. Now that I’ve been budgeting and using YNAB I know that it is just a tool. The finite amount that we have at any given time can be molded and shaped to what we need it to be.“

Now, that’s a winning attitude which, coupled with their budget and a rise in income—from $10,000 to $38,000 per year—is really paying off! Since they began using YNAB three years ago, Jaklin and Ryan have:

• Paid off $14,000 in debt
• Increased their net worth by $24,700
• Kept $2,000 in savings at $2,000
• Contributed to their retirement fund
• No overdrafts

We Don’t Fight About Money Anymore

These days, Jaklin and Ryan rarely argue about money. Jaklin said, “We went from never, ever talking about money to constantly fighting about money to being able to talk in absolutes about what we have, what we don’t have, and where we want to be with our money. We can cover those unexpected expenses without a fight. No sweat.”

“Achieving our goals no longer feels like a haphazard dream that likely won’t come true. Now, we’ve got a road map of exactly what we want, what we have to do to reach those goals, and a time frame for when we’ll make them come true. We also have ‘rest areas’ planned along the way to celebrate at different milestones.”

They’ll continue to chip away at their debt, but now Jaklin and Ryan also look forward to buying their first home, one with a yard, getting a dog and a cat, and having more kids.

Take a Step Back to Move Forward

If you’re struggling, Jaklin’s advice is: “Start by thinking about what you want to accomplish in your life. Look at the obstacles that you’ll need to face, and break them down into manageable pieces … then demolish them. And, don’t forget, sometimes in order to move forward, you have to purposely take a step back so that you can get a better footing.”

Trying to balance student loan debt and starting a family? Put yourself back in the driver’s seat with your money. Get started with YNAB for free.