Teri and Matthew McGinnis, center, discuss their situation with their advisers.
Matthew McGinnis wanted to get a college degree, and he did. It took five years and several student loans, but he got his mechanical-engineering degree. His wife, Teri, studied art at UT and also took out student loans.
Now it's payback time, and the total of $85,000 in student loans is hurting them financially.
Mr. McGinnis, 30, a computer systems administrator for Exel, Inc., and Mrs. McGinnis, 29, a part-time ceramic-art teacher, have an annual income of about $70,000.
But the student loans - combined with $4,100 in credit-card balances and medical bills of nearly $2,900 - make it tough to keep up.
They recently missed a payment on the $103,000 mortgage on their $114,000 Swanton home and are behind on their student-loan payments totaling nearly $700 monthly.
The couple also have to think about educating their three sons and a daughter, ages 5 to 12, and look ahead to their retirement a generation from now.
In addition, Mrs. McGinnis, who has had medical problems that kept her from working, is trying to start up a ceramics business and has bought several thousand dollars' worth of inventory.
“Our bills are more than we make,” said Mr. McGinnis.
But, he added, “I feel that I have a good understanding of financial principles but lack the resources and/or credit to put them into action.”
Planners Mark Ferris and Mindy Carr told the couple that debt consolidation - now, if possible, but more likely later because of credit problems - could free up hundreds of dollars monthly, perhaps as much as $950.
Mr. McGinnis has begun the process of consolidating the student loans.
If they could qualify for a home-equity loan, they might be able to wipe out some of the higher-interest credit-card balances.
“We have to back up a few steps and get past the big elephant in front of us,” Mr. Ferris told Mr. McGinnis.
Then, he advised, the family should begin saving.
Mr. Ferris recommended that Mr. McGinnis get into his company's 401(k) plan as soon as possible, at least up to 4 percent of his salary, to maximize the company matching. That would require more than $200 a month.
He also suggested putting $100 a month into a savings account, for emergencies.
Ms. Carr urged the couple to contact a nonprofit consumer credit-counseling service to help establish a budget and debt repayment schedule.
The agency contacts creditors and negotiates interest rates for debtors.
“A lot of people start to think about bankruptcy, but I suggest you try credit counseling first,” Ms. Carr said.
Planners told Mr. McGinnis he's probably paying too much for his life insurance - $322 a year for $188,000 of term insurance.
By shopping around, he could get $500,000 worth of term insurance for an additional $50 a year, they said.
And Mrs. McGinnis, even with some health problems, probably could get $250,000 worth of term insurance for less than $450 annually.