I suck!

I just have a bad habit of disappearing these recent months! I have a lot of good reasons though, I promise.

Quick Debt Profile for you:

CC1: $1076 and some change (it was at $600 until this morning when I had to buy a new laptop)

CC2: $4059 and some change

So, what’s been going on and why aren’t those numbers lower?

Well, like I said, I had to buy a new laptop. My old one is still working, but barely, and that just isn’t allowing me to do the things I need to do. So, before it really kicks the bucket, I wanted to get a new laptop so that I can have some time transferring files.

Another reason is because we have been feverishly trying to fix up our house. We had an amazingly awesome turn of luck and sold it without having to put it on the market! We still have some stuff to do, though, to bring it up to snuff for the buyer, so there has been a lot of buying paint and other supplies, paying contractors, etc., to meet the contingencies. Sooooo, this means the obvious.

We bought a house!

Bigger, better, will meet our needs, current and future, better than our current home. We are purchasing the house on husband’s name and using some of the equity of this house to make a down payment. We are using another portion of it to create an emergency fund, and the rest husband is using to buy a bigger car (no, I’m not pregnant).

With the selling and buying of a home, it threw our finances into sharp relief, so we really talked (and fought a bit) over my financial situation. Husband put his foot down and said I absolutely needed to find a better paying job so that I can help more with the household expenses. With reluctance because I have only been with my current job a little over a year, I searched.

And applied.

And got an interview.

And got a job.

A job that pays me around 11k more annually than my current job.

So, after a night’s sleep and a discussion with my office manager, I put in my notice and accepted the job. I start the same week we close on the new house.

Needless to say, the past month and a half have been me doing those little things to fix our current house and packing. The silver lining is that because we are moving, the only spending I’m doing (besides the laptop) is groceries and house fixes. Husband has been covering a vast majority of the latter, but I help where I can. Since we have had a few honest discussions about my debt, he is on board with me at least paying the credit cards off ASAP. The new job will help too since it’ll be an extra $300 a paycheck approximately. I expect CC1 debt paid off by the end of the year, CC2 hopefully by March. Oh, by the way, I finally called my credit card company and asked for reduced interest rates on both credit cards and was rewarded lower rates by 4% each. Not a ton, but still it will help!

ALSO, I have heard from my ace-in-the-hole. I don’t have much time left to act on it, but with transferring my responsibilities at my current job, I will have time to call this week and check on the current status and hopefully it will be resolved within the next two weeks, which would mean extra money to pay off the credit cards. Maybe even pay them off completely before my above projections. I just won’t hold my breath in case it doesn’t turn out the way I expect.

I hope you all understand. With two major life events happening so soon, I have been a bit distracted. Both have been a blessing though in so many ways that I’ve really had to focus on the finish line for both of them and neglect my blog. It’s been a big year, and I’ll keep you all updated as much as I can over the coming weeks. 2014 will hopefully be the year I can REALLY focus on that student loan, but for now it continues to go on the back burner.

August Check-In

Let’s get the big business out of the way:

CC1: $584.88

CC2: $4902.95

Student Loan (Just for the sake of reference): $75118.59

These are all as of August 1st.

Obviously, I had one slight decrease and one major increase. Upon discussion with my husband, there was something a little pricey he wanted me to buy for myself and that increase on CC2 is the result. I had to take the opportunity to buy it while the market on such things had cooled down and I made sure I was getting the best price possible. I had paid down CC1 a bit, but an event and one other small purchase negated some of that pay down.

But, like I had mentioned previously, August is a three paycheck month. I WILL be paying off CC1 and CC2 will be brought back down easily barring any disasters (knock on wood). I did get my raise, but it’s only an additional $1 per hour, so while I was pretty disappointed that I didn’t get a better raise, I can’t complain too much because at least it’s something. And my health insurance is officially canceled, so if I don’t defer more money on my 401(k), I will be making approximately $990 per paycheck. I do plan on increasing my 401(k) contribution from 3% to 5% though in September after I get back to my part-time job, so I’ll expect around $975 per paycheck.

There is one other possibility afoot. If I don’t hear anything by the end of the week, I’ll expect she didn’t get it again, but I sent my ace-in-the-hole further information she is requiring and if I don’t hear anything by Friday, I’ll call to check if she got it. If I get as much as I’m hoping/expecting, if anything, credit card debt will be GONE. Even if I don’t get as much, it will go directly to the debt regardless. I’m hoping it will be finally resolved by the end of August, not just for the money but other personal reasons as well (if you can’t tell, I try to run this blog with some degree of anonymity, so I won’t get into specifics here).

 

The Goals

The financial goals for August are as follows:

  1. Payoff CC1
  2. Get CC2 down to $4k
  3. Just pay the ICR amount ($300) to the student loan.

What are your financial goals this month?

 

Requested Wedding Budget

A reader requested a breakdown of what we ended up spending on the wedding. I’m going to get that into the works soon, and I going to approach it in such a way to give you an idea of the distorted reality people have about the costs of such an event. I also have two post-wedding associated “things” I need to do first before I can put it together. I feel they are pertinent, often overlooked expenses that are in fact associated with weddings and should be on the final budget, so it may be a few more weeks before I can get it to you, but I will, I promise!

Well, it’s Saturday morning. I already managed not to do one thing this morning, so I need to get crackin’!

July Check-In

As life returns to normal, I can finally start to catch up on the important things, like asking my audience to help keep me accountable with my finances. After interest was added, here is what my accounts are looking like:

Credit Card One: $1518.96

Credit Card Two: $4850.52

Student Loan, Outstanding Balance (as of 7/1/13, it increases daily!): $74,714.46

Let’s say I give myself 6 months to pay off my credit cards. Thanks to the calculator on my banks website, I was able to figure exactly how much I would need to pay on each to pay them off.

CC1: $260.90/month

CC2: $862.52/month

TOTAL: $1123.42

With the $775 I know I can definitely put toward the credit cards, that leaves a little bit of a gap to close, a $348.42 gap to be exact. Once I’m back to teaching dance again in the fall, that will help close the gap. But, I still have July and August to account for and I have no extra income those months (my summer classes had zero enrollment, so naturally they were canceled). I just posted items from my wedding for sale, so hopefully bargain brides will want what I’m trying to sell! I have some more things from my wedding to post, I just need to check the integrity of the items first.

I also have yet to receive my deposit back, and if I get that back it will completely close the gap for July, August and then some. I’m debating if I want to take it, apply it all to CC1, pay off the rest and just do above the minimum payment on CC2 for July [assuming that I do get the deposit back]. The good ol’ psychological trick of paying off one debt to keep motivated on the others. I’m leaning toward that route just because I like it so much- it really does help to motivate me.

Just so you all know, I’m always open to ideas (beyond what I’ve already put out there). If you have some phenomenal, legal and legit method of making extra cash, I’m all ears! I do like the easy way out admittedly, so the simpler the better!

*Barf*

I had quite a shock just now. After you do your taxes, the Feds submit your return to the Department of Education for us ICR repayers. After they do this, DofEd calculates your new monthly payment. I knew it would go up, I made several thousand more in 2012 than 2011. What I was not expecting was it to more than double! I had wanted to double my payments this year anyway after paying off CC2 and the cosmetic loan, but looks like I don’t have a choice as to when!

That ace-in-the-hole really needs to come through now!

Update: new payment take effect this month!
Also my ace in the hole called today but I missed the call. 😦

Before You Take Out a Student Loan…

I was on Yahoo! homepage this morning, and this article popped up:

http://finance.yahoo.com/news/9-unbelievable-student-loan-horror-stories-165512874.html?page=all
If you are considering taking out a ton of loans, read that article and read more stories at http://www.consumerfinance.gov/blog/chime-in-on-private-student-loans/

If those stories don’t scare the sh!t out of you, then I don’t know what will.
I definitely discourage everyone from getting private loans. There is absolutely no regulation on their interest caps, and they can sink to low levels of scumbaggery when it comes to collecting debts. You can almost never discharge loans in a bankruptcy situation, so I really advise you students out there to think long and hard before taking out loans.

I’m not saying NEVER take out loans- it it’s the difference between needing an extra $1000 or staying out of school one semester, take the $1000 loan. Like I said in a previous post, taking out a loan can help improve your credit score, but a do it with a SMALL loan.

No school or program is worth the stress of the financial burden that student loans visit upon us. Read those stories if you somehow think you’ll be the exception to the rule. Our world is saturated with people who have a degree, therefore very few have qualifications that will make them invaluable to the companies they apply to, so no one is immune to the issues of those who posted their stories to Consumer Finance.

Our society is living longer and longer these days. Many people have waited until their 40s, 50s, 60s, 70s, I even heard about a gentleman that did a Physical Therapy Assistant program in his 80s, to go back to school. And I bet all those people were able to pay for school out of pocket because they waited, planned and saved. No one is holding a gun to your head, telling you to go to college or grad school immediately. Take your time, save your pennies, and you’ll save yourself stress, and interest, down the road.

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.