:::: MENU ::::
Browsing posts in: Personal Finance

Extended Warranty to the Rescue!!!

by

Back when we bought our new-to-us (then only 1-year-old) car, we added all the warranties on top of the sales price and financed it all together.

Remember, this was back before any debt-reduction mission or such. After listening to Dave Ramsey, I’ve now learned that the majority of extended warranties are a total waste of money (disclaimer: I don’t blindly believe everything Ramsey says, but I do believe this one).

Even so, when we finally paid off the car this past January I never took any steps to cancel the extended warranty so I could be reimbursed for the pricey policy. I just paid it off and went on about my life.

Fast forward to this month. Out of nowhere, we’ve experienced some random electrical issues. Unfortunately, a lot of the car’s displays are electronic. At this point, the entire dash is out. That means I cannot control A/C, we have no radio, there’s no time display, no backup camera, and more. Though most of it is just an inconvenience, some of it actually poses health and safety hazards. For instance, I’ve been driving my girls around this week and they’re crying in the backseat that they’re all sweaty (here in Tucson we’re still over 100 degrees every day). The A/C was on when the dash electronics went out, but it was set to low. Without the electric display, I have no way to change the A/C to be higher or lower and the heat is so all-encompassing that it literally feels borderline-dangerous to be driving the kiddos around without proper air.

After calling a couple shops and discovering that this is most likely a dealership issue (= $$$), I remembered that we had bought an extended warranty that specifically covers the electrical components on the vehicle.

“There’s no way the warranty is still effective”, I thought. We’ve owned the car for just at 3 years now, but we’ve already hit over 100,000 miles. I was imagining the warranty was probably nullified right around the 3-year and 100,000 mile mark.

So, imagine my surprise (and joy!) when I called and discovered that the extended warranty actually covers up to 5 years or 125,000 miles!!! We’re still under warranty, baby!!!

The other issue is that when I was calling around to shops, I was not only stressed about the money, but also the logistics. From what I was told, vehicle electrical work can take quite awhile. So either I’m stuck at the mechanics shop all day, or they can bring me back to my house. But that means it has to be a day we have the babysitter (because they can’t transport me + 2 kids in carseats). However, I’ve already determined that it’s tough to work while the kids are at home. So…stuck at the mechanics shop, then?  I know this is total 1st world problems and not really a big deal, but these are the logistics I’m grappling with. HOWEVER, our extended warranty (purchased through CarMax) includes FREE LOANER CAR while they’re doing the repair work!!!

They’ve said they may need to send the car to the dealership (which sounds likely after speaking to several local mechanics shops), but either way CarMax still provides me with a loaner. PLUS, I’ve had 2 recall-related issues pop up within the past few months that I’ve been putting off forever. So I can actually get those issues handled as well. All for $0 out-of-pocket.

My appointment is scheduled for next Thursday so I still don’t know the full amount of time it will take or even the full scope of what the issue is and what needs to be done to repair it. I’m just happy that this dumb (and super $$$) extended warranty is coming in handy! And, I may be wrong, but I believe I could still cancel at any time and receive a partial reimbursement for whatever time is remaining in the warranty. So there’s a chance I may get this stuff taken care of, then cancel the warranty in a month or so, and still end up with money leftover! I don’t want to get my hopes up (because I don’t know for sure if they’ll do partial reimbursements), but it’s an exciting prospect.

Three cheers for an extended warranty that actually came in handy and hopefully saves us some money!

What are your thoughts on extended warranties? Do you buy them? Why or why not?


2016 Tentative Financial Goals

by

Hubs and I are both natural savers (though, admittedly, he would like to save more than me). So it’s been tough to have such a low EF and throw all of our extra money toward debt lately without having much saved for a rainy day.

That’s all about to change, friends.

Hubs and I have been discussing our financial goals for 2016. We’re still hashing them out so this isn’t a definitive 100% set list just yet. And I welcome your input, too. But here’s what we’re thinking.

  1. Save $10,000 for a down payment. One of our big goals for this year is to buy a house. This gets pretty personal (in terms of personal finance), and I’m sure there are strong opinions all around regarding buying a house while still in debt, but this point is pretty firm in both of our minds. Our price point is the mid-100’s. We want to put 20% down to avoid PMI. To do so, we will use $10,000 (which needs to be earned and saved in 2016), and add to it $10,000 I have currently in a money market account. Yes. I rarely talk about it, but it still exists. Our thoughts are that we’re simply moving the $10,000 from one type of investment (money market) to another type of investment (real estate). In addition to that, my mom has generously offered to gift us an amount (I will not disclose) that should tip us over the 20% threshold and still leave us with funds for closing costs, etc. I don’t want to dwell too much on the gift as, again, this gets pretty personal. We are very grateful for her generous offer and feel comfortable with accepting it because this is something she has always told us about. She made a similar gift to both of my siblings to buy their first homes so this is something she has planned and prepared for for many years. One important note is that our current lease ends in August (though our landlord is very flexible and aware of our plans. He has already told us we could go month-to-month if need be when the time comes). Because we’d like to find a home over the summer, we need to save up that money during the first part of 2016. The sooner, the better. So this goal will heavily impact budgeting during the first half of the year.
  2. Save $5,000 for Emergency Fund. Really all of our savings funds need to be beefed up. As a reminder, I use Capital One 360(<refer a friend link) and have separate accounts for all of our different savings goals. These accounts range from the typical Emergency Fund to a health/dental/vision fund, car repairs fund, Christmas/travel fund, and more. Realistically, I’d like to save more than this (again – we’re savers by nature). But I wanted to start with $5,000 and go from there. We need to save room in the budget for debt!!!! Which brings me to our final goal of 2016…
  3. Put $30,000 toward debt. One of our goals for 2015 was to pay $30,000 toward debt. We did SO GOOD and have come SO CLOSE to meeting that goal. I’d love to have upped this figure to something closer to $40,000ish, but with so much of our money being diverted toward savings in 2016, I think $30,000 is still a good number to stick with. Once the house stuff is all situated, I bet debt reduction progress in 2017 will be gangster-status!

That’s it! It doesn’t take a mathematician to see that $10,000 + $5,000 + $30,000 = $45,000 toward debt and savings in 2016! That is such an insane amount of money! We are eternally thankful for our well paying jobs and relatively low cost of living in the state of Arizona. If you were to tell me three years ago that these would be my goals for 2016 I would have laughed in your face! Thinking back to the two struggling people just trying to get by while caring for twin infants makes my heart hurt. We were drowning in debt, maxed out on credit, and just trying to grasp at that next paycheck. It is no exaggeration to say that blogging here has been absolutely transformative for our family! We have accomplished more than we ever thought was possible!

Yes, we still have a long way to go (nearly $95,000 in student loans remaining). But just looking back and seeing all the progress we’ve made in such a short amount of time (less than 2 years) is so heartening. It just fills me with hope and promise for a future in which we can eventually be fully debt-free. I cannot wait!


Move = Complete

by

Hi friends!

I hope you had a great weekend! We arrived back in Tucson yesterday after a whirlwind of a trip and I have never been more thankful to sleep in my own bed!

Initially, my brother was going to go assist my Dad with loading a moving truck a month or so ago but, due to circumstances beyond anyone’s control, that didn’t happen. My sister and I were both unable to go for the originally scheduled move date but I decided to go over my Thanksgiving break since I had a few days off from work (though one is never really “off” in academia – I monitored my email daily).  At first I had booked a flight to go alone:  fly out on Monday, load on Tuesday, then fly back on Wednesday so I could spend Thanksgiving with my own family. But after some thought and discussion, we decided to make a family trip of it. I’m so grateful it worked out that way because I really needed the emotional support of having someone else there with me. Moves are stressful enough (one of the top 5 life stressors according to here), but I think things were exacerbated a bit being that this move was not exactly a happy, exciting, or even desired thing. It was more a chore of necessity to get my Dad somewhere closer to family where he can be helped and watched over better.

Unfortunately, we couldn’t leave town until Wednesday because hubs’ work had him busy all the way through Tuesday evening (he worked late to finish up on time). So we made a 14-hour drive on Wednesday (some of it in snow driving only 20 mph). It was nice that we got to spend all day Thursday hanging out, enjoying good food, and visiting with extended family that I don’t get to see too often. On Friday we had movers, so we fortunately didn’t have to do any heavy lifting, but we still had to direct things which was rife with stress given that not everything could go (my Dad is downsizing), and this was quite troubling for him to see things get left behind.

After the truck was all packed, my family went and checked into a hotel (there was still a guest bedroom set that was left behind in my Dad’s house so he still had someplace to sleep but his other bedroom set was packed). We all took a long family nap, and then met back up with my Dad that evening to go see the Christmas lights at Temple Square. Besides it being the coldest weather the girls had ever experienced (bundled up in 4+ layers and still complaining of the cold in 23 degrees), they really enjoyed seeing all the lights! I can’t wait for Christmas this year – it’s going to be such a fun holiday with them!

We left town on Saturday morning, but split the return drive into two days so it wasn’t quite as grueling. Still not what I would consider pleasant by any stretch of the imagination, but far preferable to our 14-hour one-day drive. Plus – the girls got to see and play in snow!!! They’re obsessed with Frozen (they were late to the Frozen game because we didn’t let them watch movies until just relatively recently), and they kept pointing at the snowy mountains saying, “Look!!! Elsa’s ice castle!!!” Pretty adorable!

Financially speaking, the trip didn’t cost us anything since my Dad covered our costs for gasoline, lodging, and food (all of which was pretty minimal. It actually saved my Dad money for us to all drive compared to what my plane ticket had cost). The only other cost incurred was that of missed work for hubs. Yes, no one really works on Thanksgiving Day, but he could have worked over the weekend and was unable to since we were out of town.

Speaking of….I’ll be posting a debt update later today. I have to maintain a positive attitude and realize and acknowledge that November is always a relatively down month for hubs’ business. But, of course, it’s a bit disappointing to not have earned as much as we would have liked/needed in order to make our astronomically large planned debt payment (we’d planned for a $4500 debt payment and didn’t come anywhere near that). Those numbers will be up later.

But to end on a happy note, I’m so thankful that the first phase of this move is complete. My sister will be meeting the movers in Texas and overseeing as things are unloaded. She will also be the person to help actually set things up once they come off the truck. And, just like that, the burden has shifted off my shoulders and onto hers. I’ll still be primarily responsible for paying my Dad’s bills, but all the day-to-day things will surely fall to my sister now that he’s close to her.

Right now my Dad does NOT want to sell his old Utah house. We’re trying to take things in baby steps so, rather than pushing him too far, we decided it could just sit for now. I’ll be hiring a lawn-care company, his brother (my uncle) will check up on it regularly, and we will revisit the issue in the Spring or Summer. It’s likely we’ll make another family trip up there at that time so hubs can do some general handyman work around the house and we can finish clearing it out of its leftover contents.

I have to say – my Mom has been caring for her aging mother (my grandmother) for a half decade. My grandmother did not do a great job at planning for retirement so the financial burden of her care has fallen directly to my Mom as the only child. It pains me to see the stress it has caused my mother and the financial toll is not trivial (over $4,000/month). I hate that my siblings and I are in the caregiver role for our father, especially at such a young age. That being said, I am beyond grateful that my father took better precautions than my grandmother had, and that he actually has assets (both liquid and real estate) to help pay for his care. As stressful as the situation has been for us, I cannot begin to fathom how much worse it could be if all of these costs were falling directly onto our shoulders. My heart goes out to anyone who has had to financially take over caring for their parents. This has definitely been a lesson to me to get our financial house in order so we never leave our children with the burden that’s been placed on my mother in financially caring for my grandmother. It’s hard enough to take over as caregiver. The least we can do is make sure that we have ample money available to pay for whatever care we may need as aging adults.

Food for thought on this Monday morning. Have a good one!


Skating on Thin Ice

by

Since I’ve started working full time (and having the steady full-time paychecks that come along with it), I’ve noticed one BIG change in hubs’ and my mentality toward debt payments:  We’re a lot more eager than we used to be.

Now, don’t get me wrong. We’ve always been eager to get out of debt! But what I mean is that we aren’t taking as many precautions and have a little bit dangerously low safety net in place currently.

Prior to landing the full-time job, we had extremely variable income. In hubs’ job, alone, he’s had months where he’s made nothing and months where he’s made nearly $10,000! That’s a huge fluctuation! While my income was always a little bit more stable (in terms of the same amount of money almost every month), it was an adjunct position so there was no stability in terms of long-term job security. I sign a semester-by-semester contract so I only ever have a guarantee for just a few months at a time.

My full time job now fills that void. It offers safety and security. I know that, no matter what, I’ll be getting a paycheck every two weeks for $X amount (of course, this is assuming I fulfill my job duties…I’ve never heard of anyone being fired mid-semester but I presume it could happen if one were to just drop off the face of the Earth or something drastic happened). But you get my point. This steady money provides a bit of a safety net that, otherwise, we had to do ourselves through savings.

So, although I don’t like how thin we’re running on money right now, we’ve been making some much riskier financial decisions than we have in the past.

All of our savings accounts are dangerously low. Under a thousand in our emergency fund. Only a couple hundred in our car repair fund, a couple hundred in our health/dental/vision fund, a couple hundred in our annual expenses fund. All of our savings are grossly under-funded right now. Plus, we’re slipping into a limbo of living on last month’s income. Basically, I still use my full-time paycheck to live on last month’s income, but all of my part-time pay I’ve started using toward the current month to boost up our debt payment figures. Same thing with hubs. He had a no-income month in August and, since then, I’ve been using his pay for the current month simply out of necessity! It’s a slippery slope and I know that we’re sliding a little bit.

I know all of these factors combined (very small EF and other savings, smaller safety net through “last month’s income”) can come back to bite us in the butt. But my thought process is this:

I really want to pay off our car. Like….I really, REALLY want to pay it off.

There are two ways that this could go:

  1. We have a super small safety net until the car is paid off. Then we bulk back up our savings and everything is fine. No big deal.
  2. We have a super small safety net and something happens that requires immediate money and attention (e.g., big car repair, unexpected health issue, etc.). We divert the money we WOULD have put toward car debt toward the new issue. The car isn’t paid off as quickly, but we all survive.

Maybe I’m missing something, but this is how it seems to me. Even if (knock on wood) we suffered some unforeseen financial blow, we have the funds to deal with it…it would just require us to put less toward debt. So it would blow the goal of paying off the car by December, but we would still be able to weather the storm.

To try to make sure this is the case, I’ve been putting off debt payments until late in the month when I know, for sure, exactly what hubs’ income is for the month, how much money we’ve got for the next month (from our now modified living on last month’s income fund), etc.

It certainly feels risky at times, but my hope is that this is only for three months. By the time the new year rolls around I hope and pray that we’ll be consumer debt-free (meaning, the car has been paid off). If that’s the case, then we may take January “off” of debt-payments (aside from minimum obligations) so we can re-stock some of these savings that really should be funded at a higher level.

That’s the plan anyway. We’ll see what curves life throws our way.

Have you ever lived with a super-low financial safety net for a period of time in order to try to meet some financial goals? If so, did it work for you?

We’ve done this once before. Back when we paid off our Wells Fargo credit card (in May 2014), I made a a giant payment (like $3500) to pay off the card in full before I even knew if we had the money available. To clarify, that’s when we had a 100% variable income (no steady pay), so we literally had the money in a checking account but I didn’t know if we’d have enough money coming in to cover the rest of our bills for the month! I made a giant leap and just paid the bill in full and crossed my fingers that it would all work out. Thankfully, it did. We earned enough to cover the rest of our bills and all was fine. I’m hoping for a repeat situation now. I want this car loan debt gone NOW!


The Year of Becoming an Adult: September Update

by

In October of last year I wrote about some of the financial goals we have for the year 2015. I called it “The Year of Becoming an Adult” as a way to acknowledge that, at the ages of 31 and 32, we really should have had these tasks taken care of long ago! It was long past time and 2015 was our year to tackle these important adult milestones.

There were four things, specifically, that I had mentioned. Time for a little status update on each of them:

  1. First, we’re going to make a will. This is finally done! I actually made the wills on my birthday (December 31st), but it took us MONTHS to get them notarized! In our state we had to have two witnesses and we had a hard time getting people to be our witness. We asked bank employees (nope), we asked friends (yes, but had a hard time finding a time that worked for 2 separate friends at the same time), and finally we got it done when hubs’ mom and grandma came to visit a couple months ago. Kind of ridiculous that it required two people coming to visit us who could serve as our witnesses, but the bottom line is this task is finally completed and behind us.
  2. Second, husband will get life insurance. Quick recap for newer readers – hubs had a mystery illness at the end of 2013. In summer of 2014 I got life insurance and tried to get him some, but he was rejected due to the mystery illness (doctors never found out exactly what was wrong with him). He was advised to wait a year and try again. So initially we were going to reapply at the beginning of this summer. But hubs has been on a hard-core mission to lose weight and wanted to wait until his weight-loss is complete so he can try to get better prices on life insurance. He started his weight-loss mission on June 1st and in the 3 ½ months since then he’s lost a total of FIFTY POUNDS!!! Yes! It’s incredible! Like watching an episode of extreme weight loss in front of my eyes! He wants to lose another 20 lbs. but I think we’ll probably initiate the life insurance process early next month (October). I remember from last time around that it was a couple-month process – not a quick overnight thing like I had expected. So this should still be done by the end of the year, but hasn’t been handled yet.
  3. Third, we’re going to open retirement accounts. Success! In April (before tax day), we opened up our first Roth IRA for 2014. It was a meager contribution ($1,000), but it was a start. For most months this year we’ve been setting aside $100 to be added to the Roth. But then when I started my full-time job in mid-July things really kicked it up a gear. I’m now contributing 10% of my full-time job income to a retirement account, which is being matched up to 7% from my employer. In addition to that, I’ve opened up a FSA (flexible spending account) for dependent care. I contribute $500/paycheck of pre-tax money so I can pay for the girls’ care with pre-tax dollars. I actually haven’t made a withdrawal from the account yet (and I need to!), so I need to figure out how to do that. But the point is that we’re now contributing to various retirement accounts (mostly through my employer’s 401a but still a little in a Roth), as well as taking advantage of a tax-advantaged FSA.
  4. Finally, we’re going to open college savings accounts for our girls. This one still hasn’t happened yet. Starting in June (the month of their birth), we’ve been setting aside $25/month with the intention of opening up a college savings account. Honestly, I’ve been so overwhelmed with work and stuff happening with my Dad that I haven’t been able to investigate into this further. Matt made it sound like it was super easy-peasy when he opened up an account for his niece, so I just need to bite the bullet and do it. In the meantime, the money has been earmarked for this purpose (I categorize it using YNAB’s budgeting system), so it’s available when I finally do get around to actually opening an account. I’ll go ahead and put this on my To Do List for the beginning of October, too. So I’ll call this a half-success since we’ve actively started saving the money but haven’t actually funneled it into an appropriate account yet. The intention is there, so now it’s just a matter of the follow-through!

Those were the main things I had discussed in my original Year of Becoming an Adult post, but I’m also happy to announce that hubs is finally getting a handle on his dental issues, too (never mind that it took an all out emergency to make that happen). Actually, TODAY is the day he’s getting his first quadrant of work done! He’d gone to the dentist right after the emergency but had to be put on antibiotics before any actual work could be done so today is the D-Day (D as in Dental work). We’re hoping to knock out one other quadrant before the new year (to max out our dental insurance benefits), but that probably won’t be scheduled until late November or December sometime to allow us a couple months to try to save up some more money. Remember – this round of dental work cost $665. I’m not sure what the next quadrant will cost but I’m assuming it will be pretty comparable. Allowing for a couple months’ buffer to restock our dental savings account is really helpful for us.

So there you have it!

#1 = check!

#2 = in progress

#3 = check!

#4 = in progress

BONUS (dental work) = in progress

 

I’d love to report more successes/check-marks but with the cards life has dealt us this year I’m pleased with our progress. When life gets crazy, baby steps is all we can ask for. As long as we’re moving forward we’re moving in the right direction! : )

I’ll be sure to update in a few months when I can hopefully report that ALL of these items have been checked off the “Year of Becoming an Adult” list!


Ashley’s August 2015 Budget Update

by

Awww, September! As much as I love August I welcome September like a breath of fresh air after the wicked heat of summer. Here in Tucson it’s still HOT (so don’t get me wrong). But we start to notice a cool down particularly in mornings and evenings and it becomes beautiful to hang out outside after dinner, letting the girls run around, enjoying a slight breeze, and chatting with hubs. Good times to look forward to as I welcome Fall weather with open arms!

In the meantime, here’s how our budget from August ended up shaping out:

Place Amount Spent
Rent 1200
Electricity 245
Water 53
Natural gas 17
Cell Phones (2 lines) 150
Cable/Internet 40
Car Insurance 118
Trash 35
Preschool 1116
Gift-Giving 85
Personal Maintenance 12
Restaurants 88
Groceries 566
Gasoline 86
Household Goods 93
Clothing 102
Toddler purchases 30
Rainy Day Savings 300
Savings Goals 600
Debt Payments 2204
Total Budgeted $7140

 

Things to note:

  • Increased rent: I wrote here about how our rent increased. This was our first month at the new rate.
  • Electricity: Still high as the sky, but in-line with last year’s August budget (August 2014’s electricity was $251, so this year we were slightly lower). We can just gear up for a high September electric bill, too, because its going to happen.
  • Cell phones: This category is a bit of a mess that will hopefully be straightened out in the coming months. Remember that we switched to T-Mobile from Sprint earlier this month to save some money (and it also came with a few additional perks, mentioned here). Well we got a ridiculously high Sprint bill after we cut our service ($250!!!) T-Mobile is supposed to credit our account for the equivalent amount so, in theory, we will have no cell phone bill for a few months until the credit has been run down. So I “cheated” a bit here. The full amount we paid was $250, but I put $150 in August and $100 in September to try to spread out the pain a little. It should work out since we’ll have no bill in September. This is something I’ll continue to monitor to make sure everything worked out in the wake of our switch.
  • Cable/Internet: This was a bit of a mess, too! Generally our bill is about $110/month. In August I received a bill for nearly 50% more than what I’d expected. When I called to ask about it I was told we’d been in some promotional package for years and it had finally expired so our bill would increase. I was not willing to pay a 50% increase so I tried to work with them to get us into a better package. Long story short, I had to make 3-4 calls and physically go into a Comcast store to have everything fully resolved. We should now be back in a plan that costs $100/month (probably closer to $110 when taxes are factored in), and we were given credits in August for all the hassle and headache. So this is a temporarily low bill and hopefully in September things should be back to normal in this category.
  • Preschool: This category is also a little lower than is normal. This is the amount we pay for the regular Monday-Friday preschool, but the normal day ends at 3:00pm. We pay extra to have the girls stay longer (hubs usually gets them at 4:00pm), but so far we have NOT been charged for the extra time they’re in school. This was the first month of preschool so I’m not sure what the billing cycle is yet for the extra time, but I know it’s charged separately from the regular bill so I anticipate it coming sometime soon.
  • Household Goods: This included a Costco haul with some paper products (e.g., toilet paper, tissues) and some cleaning supplies at the regular grocery store.
  • Clothing: I discussed how I was budgeting $100/month for new work appropriate attire. This month I got new shoes from DSW and a new bra from Victoria’s Secret (the last bra I bought was from when I was immediately post-partum/still breastfeeding, so I was in sore need of a new bra!)
  • Toddler Purchases: This is just from their Halloween costumes (I wrote about the great deals at Costco and they still have tons of costumes in my area.)
  • Rainy Day Savings: I put $300 toward different rainy day savings categories. This includes:  $75 (car repairs), $50 (travel/Christmas), $75 (health/dental/vision), $75 (annual fees), and $25 (Girls’ college savings). HOWEVER, I should also mention that I withdrew $307 from different savings funds (I keep all my savings in Capital One 360 due to their higher interest rate <refer a friend link). I withdrew $100 from health/dental/vision to pay for my contacts, like an idiot (because now I have insurance!!! I’m going to try to submit the receipt and see if I can be reimbursed). I also withdrew $207 from my annual fees fund to pay for my annual premium of life insurance.
  • Savings Goals: This is $100 for a Roth IRA and $500 for Cruise 2016.
  • Debt Payments: Still chugging right along with debt payments. This is slightly more than last month, but still right around our typical debt payment size.

Related to debt payments, I’ve made the executive decision to cheat a little bit on our “living on last month’s income” ideal. We’re still living on last month’s income, BUT September is the first month where I’ll earn double-income (from my part-time job in addition to my full-time job. Remember, I wasn’t paid from my part-time job in August due to regular schedule of payment).

Soooo, I’ve decided to allocate my regular full-time paycheck toward living on last month’s income (so it will go toward expenses incurred in October). BUT I’m going to keep my part-time paycheck for use during September to help speed up debt payments. I’m just REALLY itching to make some higher debt payments and it’s been a real bummer to have started this job nearly 2 months ago and not have made any really killer debt payments yet! Rather than waiting and putting that off until October, I’m going to dive in THIS MONTH with some higher debt payments by putting a portion of my part-time pay toward debt in September. Right now I’m thinking I may allocate 50% toward September and keep 50% allocated toward October. But I want to discuss it further with hubs to make a final decision. I just know that I’m itching to make some big debt payments and I can’t wait until October. Some of it is going down SOON!!!!

So that’s how August shaped up and some plans for how I plan to handle September’s debt.

 

Where are you in your debt repayment? How was your monthly budget in August?


The Hard Wins

by

Happy Tuesday Everyone!

I won’t have a weekly debt update this week, since I didn’t pay much off. Instead I want to focus on the challenge my last 3 loans will be to pay off.

On last week’s post, I was asked a number of questions in the comments section by Judi; these got to doing some thinking. The questions pretty much pertained to the following:

  1. Do you think your last 3, but largest debts, will be mentally easier or harder to payoff than all the ones before? And…
  2. How am breaking down these larger loans into smaller wins? And…
  3. How are you planning on keeping your focus during this time?

The first two are relatively easy to answer. I just KNOW that these last few are going to be BY FAR the hardest to payoff. From a financial standpoint, they represent nearly 1/2 of my student loan balance. From a mental standpoint, they are mountains compared to the mole hills I’ve climbing thus far. The only comparable balance would be my car, which had an August ’13 balance of $11,700 BUT I wiped out most of this in one swoop with an old 401K account withdrawal- I don’t have any more large accounts I can withdraw from if I’m feeling that “itch” to just pay another one off.

As far as the 2nd question, ever since I aggressively started paying off my debt, I’ve kept a line of “Next Steps”. For each balance, large or small, my “next step” or target was the next nearest $1,00 increment. So if my balance was $7,575, my target was $7,000 and so on and so forth. This idea was definitely not mine; I got the idea from Joan over at “Man vs. Debt” (Side Note: I really like what Baker accomplished, but they have since seemed to have packed up and moved on over there…). I thought it was one of her best moves, and replicated it in the same fashion into my own debt payoff.

As for the 3rd question, I don’t really know. Since all my loans to this point have been relatively low balances, I’ve only had to go a few months in between the wins of having paid them off- which kept my focus the most. But now it’s going to be months and quite possibly years between wins and the ultimate goal of $0 debt, and I’m not sure what to expect other than difficulty. I’ve maintained my frugal lifestyle since graduating college 6 years ago, but at some point I know I’m going to want to see some tangible rewards for all my hard work up to this point. So it’s like, can I keep this going for another year to 2 years? Just having a savings account worth more than a couple grand would be enough.

Have any of you paid off a large $20k+ debt? If so, how long did it take and how did you maintain focus?

(On a side note: I would like to save more in my 401k, ASAP, while I pay off these last large chucks. I’ve filled out the paperwork to increase my contribution from 4 to 10%, but haven’t handed it in, yet. What do you think?)

I will be posting my May in review, but I’m not sure I can get to it today, but certainly by the end of the week.