Ask and You Shall Receive!

This post is going to look at two different perspectives on this phrase in the world of personal finance.

Got My Deposit Back!

After waiting for over a month to get my deposit back, I finally emailed the coordinator at my venue asking if I was going to receive it back. She emailed me back a couple hours later stating that she had requested it be returned to me the day after my wedding, so theoretically I should have received it before I got home from my honeymoon (as I thought I would). She sent the person in charge of cutting checks an email asking what had happened- that person was out for surgery for a month and the volunteer who was in charge of handling checks didn’t do what they were supposed to do! So, the very next day a check was in my mailbox. I’ve decided to fully commit it to CC1 immediately and kill that debt by next month (I haven’t canceled my health insurance yet, so I don’t have the wiggle room for the $775 per month yet, plus I owe husband some cash for adding me on to his car insurance).

I asked where my rightfully owed money was, and I got it! I wonder if I ask for a raise, will I receive one…?

And on the seventh day, God said “LET THERE BE CUTE SHOES.” (Or something like that)

I have an unhealthy obsession with shoes. Whenever I see a cute pair of shoes, I go through a deep internal struggle about the cost and the need for the shoes. I did an excellent job in 2012 of only buying shoes when I absolutely needed to, but this year has been a different story. I bought two pairs of shoes this past week (buy one pair, get one pair free, how could I possibly pass that up?!?), and my husband bought me a third pair. This is on top of other pairs I bought earlier this year…

Good ol’ husband, he loves to make me happy. He loves to make me happy with shoes.  I often don’t have to do much more than ask then he will buy whatever it is I want for me as long as he perceives it to be reasonably priced (i.e. I saw a beautiful $14,000 dollar ring a few weeks ago, there is no way he will ever buy that for me unless we win the lottery). On our honeymoon, he bought me a very expensive somethin’ that I was admiring, with merely the excuse that we were on our honeymoon.

This mentality he has, while fun at times, can be stressful. Eventually we are going to start a family, the belts are going to get tighter and I don’t think he’ll know what to do! I mentioned in a comment to a reader who was interested in seeing how we will combine and manage our finances together, but him and I don’t talk money often. It is definitely a source of stress between us, with him being slightly better at it than me but him more frequently buying things that I don’t think are necessary to happiness, but in his mind they are. He could probably save thousands a year by cutting back on some of his discretionary expenses. Eventually I want him to be on board for killing the mortgage as fast as possible (after I kill the student loan), but I worry he won’t like what it will entail.

Once I get my credit cards in order and am a strongly contributing member in the household, I will ask him to start making sacrifices for the good of us and our future family. We will see how it goes, hopefully another ask and receive that I will receive…

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The Debt Numbers

I would like to start off by saying that I really never wanted to put this out there, but here goes nothin’.

(Green indicates the bills I’ve paid.)

That is the graphic I created to track each of my debts and what a payoff would look like if I snowballed.

Medical Bill-$600

I have had a horrendous sleep disorder for over 17 years. Last November, after I got health insurance, I had two sleep studies done- an overnight study and a sleep latency study. I thought it would be all good regarding my insurance paying for it, but I was wrong! They classified it as a pre-existing condition, and I have to pay out of pocket. Originally it was a $3000 bill that arrived in May, after I started the blog, but they cut it almost in half and I’ve been paying about $300 a month to pay it off. August was tighter than planned, so I didn’t make a payment in August, but I’ll pay this month and next and it’ll be gone.

Credit Cards 1 and 2-$1450.17 and $1800

One of the cards is in an introductory 0% APR period until next April, while the other is definitely not. I’ve been paying Credit Card 1 well above the minimum so as to keep the interest down, especially since the Medical bill and Credit Card 2 do not accrue interest.

Cosmetic Loan-$3865.31

Yup, I’m vain. I had plastic surgery because it was cheaper than I thought and it was an ego boost I’ve been waiting to pursue for years. I smile every time I see myself profile in photos or videos because my schnoz is gone! This was back in January, before I considered the other things that should have been on high priority to pay off. I justified it by saying to myself that I may not get a chance after I have kids, so I did it. And honestly, I really don’t regret it and of all the bills, it stresses me out the least to think about. I pay slightly higher (read= a few cents) than my minimum payment.

Student Loan-$73572

I am one of the many who use Income Contingent Repayment (ICR) to determine my monthly payments each year. There are some advantages and there are some disadvantages.

Advantages

  • Each monthly payment is determined based on your income. So, if you don’t make much money, your payment will be lower than standard repayment.
  • If you ever come on hard times, having a lower payment can alleviate some stress.
  • If you still have a balance after 25 years, it is discharged (but that remainder is taxable at that point, so if the remainder of your loan is discharged, you have to pay taxes on it as if it were income).

Disadvantage

  • You may pay less than what the monthly interest is, so you may never make a dent into the principal.

Just because you have a determined payment doesn’t mean you have to pay ONLY that much. You can pay more. Right now, I pay the amount calculated based on my income plus a few extra dollars, but that is only paying interest. I have not made a single dent into my principal since I started repaying two years ago. This was a God send deal for me though when I went into repayment and didn’t have a full-time job. I was hardly making ends meet, and having a high student loan payment wasn’t helping matters. I consolidated my loans, applied for ICR and honestly have the peace of mind that if hard times ever hit again, I can revert to a lower payment.

Analysis

The total damage: $81287.48. EEK!

That’s a 20% down payment on a decent house in my area. That’s buying 3 brand spanking new cars. That could finance both of my future kids educations. That’s just way too much money to be indebted.

The Payoff Goal

For right now, I’m only giving a target payoff date for the medical bill, credit cards 1 and 2 and the cosmetic loan. If I continue to pay as I’m paying like it’s portrayed in the grid, we are looking at a May payoff. But, my wedding is in June, so my non-aggressive goal is by my birthday in March so that I can have some financial leeway to help pay for the wedding. BUT, I also want to do some home improvements before we sell the house next summer, so I’d like to have a little bit more extra money lying around if needed.

SOOOOOO…

My goal is to pay those 4 debts all off by Christmas!!!!!!!!!!

Today is September 4 and those 4 debts total $7715.48. Christmas is 3 and a half months away. I make around $2000 a month after taxes.

Oh boy.