I apologize ahead of time if this is too simple a matter for this Stack Exchange. My mother has been in a sticky financial situation for a while now, and I was hoping to get a little bit of help, and possibly some pointers for her and myself for how to get out of this.

Quick Background

My mother is a single mom, she's turning 50 this summer, and she has about $60k in school loans from the college I attended. I have some myself, these are just the parent plus loans. She also has a remaining payment of about $10k to my sisters college. She's done in a year.

She lives on her own in a 2 bedroom apartment, and she works full time. She actually makes somewhat decent money, but with all of her expenses, it's very difficult.


My mom pulls in about $4,400 a month after taxes. As I said, very good money in today's economy. However, she owes about $4,800 a month (just did the exact calcs). This includes but is not limited to (monthly):

College payments - $900-$1,000

Rent - $1,625

Gas - $200

Food - $100

Expenses - $50

Bills (phone, gas, electric, cable) - $325

Debt Repayment (long story, but she pays no interest on a large debt that was sold from a credit card company to a private company, we already tried to fight it) - $350

Health Insurance - $331

Car Payments (ins. and loan) - $650

That's about it. Right now, I loaned her about $8k to pay some back debts off, and basically pre-fill her account for a little while. So every month, even though she is spending about $400 more than she makes, she has about $4k of the loan I have her left to offer that extra until we can figure something out.

I have setup a budget for her so she is never spending more than the amounts listed above, but those are the bare essentials, and she is still making $400 less than she owes per month.


She still has a $3k debt to our aunt, that she COULD re-pay now, but then the amount I loaned her would go down to $1k, and in a couple of months, she'd be screwed.

Does anyone have any idea of how she can work herself out of this? She's getting a TINY bit back from taxes, and she works extra hours in the summer time so that should give her an extra $300 a month or something, but that's still not enough to get out of this.

My sisters tuition will be over (the $500/month), in about a year like I said, but everything else, there's really no end in site for a while. She can't count on getting cheaper health insurance from her job, and to move out of her apartment would take a while because the area is so high in demand, and she needs to stay close to where she works otherwise gas/tolls are ridiculous in NJ.

Any help would be incredibly appreciated. She's an extremely hard worker, who has been living off of a $50 expense for a while now. She deserves at least a chance at making something work for her, being a single mom and all. Thanks for any help ahead of time.

  • 3
    She has 60K in your college expense, but you lent her $8000? Did you pick up any of your own cost or is mom in for the entire bill? I'd suggest you forget that loan now, and gift her $500/month until she's debt free, Commented Mar 31, 2012 at 18:47
  • 1
    Clarifying questions: Are the $900--$1000 current college payments for classes now or debt for classes already taken? By "phone", does she have a land-line and cell phone, and at what cost(s)? How much is cable? When will she pay off the Hyundai? How does she get by on $100/mo food?; seems too low. How much money do you and your sister make? Any chance she can get a raise? Who has time/care among the three of you to take on an additional part-time way to earn more money, even just $300/mo?
    – Chelonian
    Commented Apr 1, 2012 at 17:36

6 Answers 6


She seems to be paying an inordinate amount of money for car payments. $850/month is just too high. She may be able to get by on public transit, depending on where she lives, but if not, she needs to look at selling her car and picking up a cheap second-hand vehicle. Public transit would probably save her $750/month. Going to a cheaper car should still save her $300 - $400/month.

Next, phone and cable. These are certainly nice, but they are rarely necessities. I do not have cable t.v., for example. I do have a cell phone, and I do have Internet (a requirement of my job), but no cable t.v. She may be able to save some money there. My guess is that she could save $125/month here, though I may be biased on how much it costs to heat a Canadian home in our cold, cold winters.

And, of course, the college payment. $900 - $1000 a month? I understand that she is paying this so that your sister can attend college. That's very nice, but it certainly sounds like your mother cannot afford that. On the other hand, if this is repayment of college expenses already incurred, there may be no choice here.

Rent, at $1625/month. I have no idea what that gets you in NJ, but perhaps she could rent out a room. It's not inconceivable that she could bring in $1000/month from doing so, though obviously that's going to very much depend on the real estate/rental market where you live. Alternatively, she could move out and move in with someone else and that should certainly get her share of the rent down to $800 - $1000/month or thereabouts, and most likely cut her utility bills, also.

I've identified a number of places where she can save money. No doubt, the budget is tight, but I think she's spending on far more than just bare essentials.

One thing that concerns me here is that she appears to have no emergency funds and very little for entertainment, other than cable t.v. If at all possible, she needs to cut her budget down so that she is not living paycheque to paycheque and has money to cover, for example, emergency car repairs. And I'd really like to see her have more than $50/month for expenses (which I'm guessing is entertainment). It may not be possible, of course, but I would most definitely say she should not be paying for your sister's college if this places her in such dire financial risk. Easier said than done, of course. Most certainly, I would not even consider cutting the health insurance, by the way.

Another approach would be to look at how her expenses will go down when your sister is done school and perhaps cleared up other expenses. It may be worth borrowing from family and friends, knowing that in a year, her expenses will go down $500/month. That makes her budget manageable. Additionally, the debt repayment presumably will finish at some point. The point I'm trying to make is that, in a year, her budget will be just about manageable, and she may be able to get there with smaller trims in the immediate future.

  • 3
    And in case it wasn't clear from my posted answer, I can most certainly empathise. Both you and your mother are in a tough situation. It sounds like you both are approaching it rationally and looking for options. That's gotta be at least 1/3 of the battle. I wish you the best of luck. Commented Mar 30, 2012 at 20:43
  • First, I'd like to thank you for the extremely well thought out response. It's people like you that make me feel better about humanity in general :) Some comments - I can work with her to see if trading in her car can reduce these payments. Her credit score is pretty bad, especially when she got it, so that was the main reason. I also think I am going to have her cut out cable. I think the main thing, as you pointed out, is rent. Finding a roommate or switching apartments would help this drastically, and I want to address this first. Thank you so much for your help.
    – slandau
    Commented Mar 30, 2012 at 20:47
  • This sounds harsh, but assuming she isn't upside down on the car loan. Is public transportation an option. That alone would probably be enough to bring her cashflow back in the black.
    – JohnFx
    Commented Mar 30, 2012 at 20:54
  • In Southern New Jersey public transit is pretty scarce, but with the amount of miles she drives to work, she doesn't really need the quality of car she has now. It's nothing special, it's a Hyundai, but I think we might be able to find something cheaper - we'll check that out as well though. Thanks :)
    – slandau
    Commented Mar 30, 2012 at 21:01
  • 2
    One more suggestion to add to @ChrisInEdmonton's great advice: What if you made the payments on the Parent-Plus loans that she took out for your education? Given the numbers you stated, I think that would get her back in the black without you anyone having to loan her any money. Commented Mar 30, 2012 at 22:46

Just a thought, but have you considered approaching your sister about assuming the student loans or repaying your mother (even if it is a small amount/month) for financing her college education?

If she is in her last year of college, in theory she should be earning at least some income within the next 2 years. Also, it doesn't seem like a lot to ask considering the sacrifices (both financial and otherwise) that a single mom probably made over the years.

I'm sure your mom would be hesitant to ask as it seems like she prioritizes her children above herself by your description of the situation, but I bet if you could talk the sister into the mom would grudgingly accept it if she really is in such a tight financial situation.

  • At the moment, my sister doesn't make anything. She's a communications major who has had a couple of internships, and I think she will be successful, but she still works on a babysitters budget as of right now. I think in her spot, being able to live in NY and not ask for money is as good as we're going to get until she graduates. After she graduates though, depending on her income I seriously doubt she would mind helping out. I've already given my mother $8k to help her crawl out of debt into the position she's in now. I think rent/car payment are the two biggest demons at this point.
    – slandau
    Commented Mar 30, 2012 at 21:03
  • 3
    I definitely meant after graduation, and maybe even several years after when she is on her feet. It isn't an immediately solution, but more of a long term solution. After all spending money on an education is an investment where the returns come in the form of future income. As an investor, perhaps your mom is entitled to some of that return.
    – JohnFx
    Commented Mar 30, 2012 at 21:05
  • Good way of putting it :) Once again, I appreciate everyone's help. This makes me and her feel a lot better that people see solutions, instead of impossibilities.
    – slandau
    Commented Mar 30, 2012 at 21:07

I see one clear thing to help:

She lives alone. Why does she need a two bedroom place?

  • She's on a waiting list for a one bedroom but she has a lease for this place until next April. Until we can find a sublet she's pretty much screwed.
    – slandau
    Commented Mar 30, 2012 at 22:44

Like everybody else I'm picking up on the school loans - you're mother isn't exactly earning a massive amount of money given her cost of living, why is she taking out student loans that benefit you and your sister? I'm not trying to be offensive but it's fairly obvious that she can't afford it. As a first step I think you should at least take over paying your own student loans (you sound like you're out of college already and if you have $8k to "lend" to your mother you probably have enough money to pay the student loans that benefited you, after all) or as someone else also recommended, assume your loans.

As to your sister, maybe it's time for her to get (another) job to pay for the tuition so her mother doesn't have to go further into debt. Again, I'm not trying to be mean here but your mother is digging herself deeper and deeper into a hole because of the tuition. Something's gotta give, and delivering pizza or getting a paper round is a small sacrifice here.

Next, the car - unless she has a managed to work herself out of some of this mess, I would consider getting a much cheaper car instead. This is provided that she isn't upside down on the loan. Personally I wouldn't trade in a vehicle with an upside down loan, if anything that's another bad financial decision. Assuming that she isn't upside down on the loan and has some equity in the car, I would seriously consider selling the car and using the equity to buy something small and cheap. That should also hopefully reduce the cost of gas and maybe insurance somewhat.

I think these points are probably the quickest steps that can be taken towards recovering this situation. You already mentioned the longer term plans like downsizing the apartment, but TBH I'm not sure that this is really necessary. The big elephant in the room are the college costs and removing those from the equation would give her a serious amount of breathing room.


Your mother has a problem that is typical for a woman with children. She is trying to help her children have a good life, by sacrificing to get them to a point where they can live comfortably on their own. Though she has a difficult situation now, much of the problems come from a very few choices by her and her children, and her situation can be fixed.

Let me point out a few of the reasons why she has come to this point:

My mother is a single mom...

she is turning 50 this summer...

she has about $60k in school loans from the college I attended...

she has payments of $500/month ($10k) to my sisters college...

she lives on her own in a 2 bedroom apartment...

Mother's current 'income statement',

  • Income

    $4400 (Does Health Insurance deduct pre/post this amount? savings?)
  • Essentials (total $3131, 71%, too high, goal $2200)

    $1625 Rent (36%, too high, goal $1100-1320)
    $ 100 Food (very low)
    $ 331 Health Insurance
    $ 225 Utilities (Gas, Electric)
    $ 200 Transportation, Gas
    $ 650 Transportation, Loan, Insurance (15%, too high, goal $440)
  • Lifestyle (total $150, low, she should have $500-900 to live her life)

    $  50 Cable
    $  50 Phone
    $  50 Expenses
  • Financial (total $1350, 31%)

    $ 500 Sisters College Payment (done in a year)
    $ 500 Parent Plus Student Loan Payment ($60K)
    $ 350 Debt Repayment

Some observations and suggestions:

Even though the $1625 rents seems high, your mom might enjoy her apartment and consider part of her rent ($300) a lifestyle choice (spending money for time), and the higher rent may make sense. But the rent is high for her income.

Your mom should be spending more on food, and budget $200/month.

Your mom should be saving money for investments and retirement. She should be putting 10% into savings ($440), plus any IRA/401K pretax savings.

Your sister should be paying for her own college. She should take her own student loans, so that her mother can save for retirement. And since she only has $10K left, an alternative would be that you could loan her the money, and she could repay you when she graduates (you have money, as you loaned your mother $8K).

You should be repaying the $500/month on the $60K student loan your mother took to help you get through college. You have benefited from the education, and the increased opportunity the college education has given you. Now is the time to accept responsibility and pay your debts. You could at least agree to split the expense with her, and were you paying even $300/month (leaving $200 for her), that would still fix her budget.

Your mom should get a car that is paid for and reduce her transportation expenses, until the $350/month debt is resolved. She should resolve to spend no more than $300/month for a car, and with $100/month for insurance be under 10% for her vehicle.

Since your mother lives in the US (NJ) she could avoid the $350/month debt payment though BK. But since there are other solutions she could exercise to resolve her problems, this is probably not needed.

You mom could consider sharing her apartment to share expenses. Paying $1625 for an apartment for one person seems extravagant. She might enjoy sharing her apartment with a room-mate.

That is about it. Once her children take responsibility for their lives, your mom will have a manageable budget, and less stress in her life.

Mother's revised 'income statement',

  • Income

    $4400 (Does Health Insurance deduct pre/post this amount? savings?)
  • Essentials (total $2721, 62%, high, need to reduce by $500)

    $1325 Rent (36%, too high, goal $1100-1320)
    $ 200 Food (very low)
    $ 331 Health Insurance
    $ 225 Utilities (Gas, Electric)
    $ 200 Transportation, Gas
    $ 440 Transportation, Loan (300), Insurance (100)
  • Lifestyle (total $450, 10%, low)

    $ 300 additional rent (for lifestyle choice)
    $  50 Cable
    $  50 Phone
    $  50 Expenses
  • Financial (total $990, 23%)

    $ 350 Debt Repayment
    $ 200 Parent Plus Student Loan Payment ($60K)
    $ 440 savings (your mom should be saving at least 10%)

While you and your sister have these changes,

    $ 200 Parent Plus Student Loan Payment ($60K)
    $ 500 Sisters College Payment (done in a year)

Summary of changes:

Some rent is lifestyle, reduced car loan by $200, sister pays her college $500, you pay your college $300, mom saves 10% of her income. Once your sister graduates and starts to repay you for your help with her college, you can take over paying the remainder of your loans, saving your mom an additional $200/month.


Given the listed expenses, this problem will not have a nice solutions. So lets quickly go through them and see when the most pressing ones can be dealt with:

Solved within 1 year: 900

  • College payments - $900-$1,000 (Assuming sis finishes college)

Solved within a few years: 1300: 900+400

  • Rent - $1,625 (Assuming she does not extend the lease at a similar rate)

You may be able to save a couple of hundred on the rest, but just take a minute to look at the above.

Within 1 year she will be able to 'break even' and within a few years she will be able to live fairly comfortably.


She will eat through her funds in about 10 months, which should coincide with the end of the tuition costs. If you could just sponsor her a little bit, or just be there for her in case of unexpected expenses, she should make it till the end of the year after which things are looking up and she will have a healthy surplus each month.

Soon you and your sister can probably help her build up a nice buffer quickly, after which her worries should be over.

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