The Biggest Mistake in Debt Reduction

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debtreduction

I’m finally debt free and in the process of becoming debt free, I read a lot of articles on how to do it. While most of these give good advice, they often leave out the most important part that, I have found, will actually make or break your debt reduction journey. I have no idea why most articles don’t talk about this, but my guess is because it’s different for every individual which makes it more difficult to put it nicely in to a 10-step debt reduction mantra.

Yes, it’s important to come up with a debt reduction plan whether that’s doing a credit card debt snowball, consolidating debt or even bankruptcy. Yes, you need to look at ways you can reduce your debt, spend less money and create a workable budget. Yes, you should probably look at ways you may be able to bring in some extra income through side jobs or part-time work. But before you do all that, you need to take a look at the emotional triggers that brought you to the current debt you have.

While many personal finance writers and gurus talk about the need to get control of the numbers, those numbers will never be contained until the emotions that drove the debt are addressed. That can make for some strange conversations. When people learn I managed to reduce my debts of over $40,000 and asked me how I did it, they are often surprised when I tell them I was able to do it because I finally decided to go to a psychologist.

I’m sure there are exception to this rule, but I believe in order to get out of debt, the first step most people need to take is to go to a psychologist to better understand themselves. I tried to get out of debt dozens of times over a 10 year period, and I failed miserably each time before I decided to see a psychologist. I knew what I was supposed to do, but much like dieting, knowing how to do something and actually doing it are two completely different things.

For me, it was about security. I grew up poor and we never had a lot of things. As I got older and I was able to earn my own money, I liked to have things. It made me feel secure. My income allowed me to get credit and that credit allowed me to get into debt as I continued to buy things to make myself feel more secure (when in reality I was actually damaging my financial security). It wasn’t until I was able to work out the emotional reasons behind why I was purchasing and going into debt that I actually had the opportunity to begin to free myself from it.

Most people know they spend too much and that’s the reason they are in debt. Again, just knowing this isn’t enough to help you get out of ebt. What most people don’t know is the emotional impetus that leads to their overspending. Not taking the time (and often the difficult emotional journey) to understand why you spend the way you do is the biggest mistake most people make when they are trying to get out of debt.


Ashley’s October 2016 Debt Update

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I hope you’re all having a good week! Our kids are out of school Wed – Fri this week so my mom flew out to help with childcare (since hubs and I both have to work still), so it’s been a lot of fun to visit together and it’s always great when Mom visits! For instance, my freezer is now full of homemade freezer meals that we can quickly and easily heat up on our busy weeknights!

I’m not even going to lie – this semester has been kicking my butt a little. I’m sure you can tell based off the more sporadic posting schedule as of late. Mid-semester there was a faculty member who, due to persona reasons, had to stop teaching a class. In week 8 of 16. Guess who got to pick up the class? This girl! I’m happy to help out and it will work out in the end (my department head is giving me a course release in exchange) but I’m definitely feeling the burden of the extra work at an already extremely busy time!

BUT –

we’re already on the downhill slope toward the end of the semester. Just a few weeks to go and I’ll be home-free! And it’s going to be such a fun winter break! We’ve made reservations for our family to travel up to the Flagstaff area and do the North Pole Experience. I’ve wanted to do it the past couple years and have kept ourselves form doing it due to budgetary constraints. This year I knew I wanted to make it a priority so I’ve been putting little bits of money aside each month to help offset some of the costs (much like I did when I saved a couple hundred bucks each month for an entire year in order to pay for cruise 2016 entirely with cash). This experience obviously wasn’t as expensive as the cruise, so I’ve just been setting aside $50 for the past couple months. I was able to pay for our tickets out of my pocket of cash and we still have a little leftover (that I’ll continue to add to this month and next) to cover the cost of a hotel and food or souvenirs on the trip. CAN NOT WAIT!!!

But that’s neither here nor there. Feast your eyes on the main reason for this post:  my October debt update!!!

PlaceCurrent BalanceAPRLast Payment MadeLast Payment Date Original debt, March 2014
Navient$70,4266.55%$1975October$82433
Balance Transfer Student Loan #2$46000% (through April 2017)$750October$7650
Medical Bills$56860%$25October$9000
Balance Transfer student loan #1$00% -Paid off in March 2016$5937
PenFed Car Loan$02.49%-Paid off in January 2016$24040
License Fees$02.5%-Paid off in April 2015$5808
BoA CC$07.24%-Paid off in June 2014$2220
Mattress Firm$00%-Paid off in May 2014$1381
Wells Fargo CC$013.65%-Paid off in May 2014$7697
Capital One CC$017.9%-Paid off in March 2014$413
Totals$80,712 (Sept balance = 83,173)$2750Starting Debt = $145,472

I’m not going to lie, I’m pretty bummed that we ended up SO.CLOSE to the 70’000s for our total debt owed. Just another $700 and we would’ve tipped over! But we’ll definitely be there by the end of this month.

The other important thing to note is that ACS is now off the debt spreadsheet table. ACS sold my last remaining loan with them (I used to have 2) to Navient. That means Navient now services 100% of my student loans. Blah! Speaking of, I still haven’t resolved my most recent Navient issue. They DID straighten out the auto-drafting issue and have updated to the correct payment (they had been grossly over-charging me). BUT, they still haven’t re-allocated the extra payments toward the loans I would have selected. So another phone call is warranted, but has not yet happened. It’s on my “TO DO” list for Friday (fingers crossed that resolves it).

Otherwise, things are moving right along. Still on schedule to close on our house very soon. I’m still holding my breath and crossing my fingers that it all goes through (after already being delayed twice). This weekend is also my husband’s and my 6th wedding anniversary! It’s going to be a bit of an anticlimactic one. My Mom leaves town on Friday so we had a VERY low-key date night on Wednesday night. We wore jeans and went to happy hour sushi. Nothing fancy or special, but it’s always nice just to have time out alone together (since typically we’ve got the girls anytime we go anywhere). Last year I mentioned how – when we first got married – I had hoped we would be able to spend our 5-year anniversary in Hawaii. Instead we made a major debt payment and just went out to dinner. Nothing crazy. I don’t regret our choice in prioritizing debt payoff in the least. I think it’s the best thing for our family. And it’s easier to maintain determination and stamina now that we’re adding in a bit more balance to our lives (e.g., like planning this Christmas trip to Flagstaff and going on more regular date nights, etc.). It’s all about trade-offs between debt payment and “life” happenings and I’m happy with our balance right now. At the same time, I look forward to the day when we can travel more freely without worrying about cost or the trade-off between paying off debt and making memories together. I’ve never been to Hawaii before and have always wanted to go. A second-honeymoon seems like the perfect reason. It’s not in the cards this year (though we’re still doing fun, albeit cheaper, family activities). But a second honeymoon WILL happen someday. It’s just one more of our “rewards” we’ll be able to indulge in after cleaning up this debt mess!  Every month – just a little bit closer to our debt-free goal!

How is your debt repayment going? Have you paid off any debts recently?


Hurry Up & Wait

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My experience with home-buying thus far can be summed up as follows:  hurry up & wait.

There have been a handful of times when I’ve received middle-of-the-day calls from the loan company like, “hey, we need X, Y, Z documents RIGHT NOW or else the world is going to explode!!!!!! AHHHHHHHH!!!!!!”

Okay, okay, maybe a bit of hyperbole there. But that’s how it’s felt. Like hair-on-fire emergency-status and they need these documents STAT!

But then I drop what I’m doing, find X, Y, Z documents, scan and send them over and….nothing. Crickets. A bunch of hurry up & wait.

We’ve already had our closing date pushed back once. Then we got this email on Monday (I’ve redacted identifying information):

I am waiting for the HOA to get me a copy of the Master Insurance Policy. I have been working with [insurance company] and they have to request a copy from the Servicing department. I have called a few times and they’re still working on it. My last call, [insurance representative] said they should have it by end of day on 10/26. It normally does not take this long to obtain this document. I have moved your closing date to 11/04 for now and once I receive the HOA document, we can look at closing earlier. I will call you once I have your loan back in Underwriting for final review.

Sigh.

So closing has been pushed back yet again. Thank GOODNESS we have a great relationship with our landlord and he’s cool with all of this! Our last month of our official lease was in August and we’ve been month-to-month since then (at no increased rate!!!) Our landlord knows we’re in the process of buying and has been so generous with allowing us to stay at our current rate until we are closed on the new house. It’s truly a blessing because otherwise we’d be homeless and living in an Extended Stay hotel right now!

I’ve had a couple people comment to ask about the house and the truth is that I’m feeling a little…not secretive…but maybe “private” is the right word?? I had a Tucson-local recognize me one day when I was out with my family (hi, friend!!!). It was fun to meet a reader but it was also a little….unsettling. I’ve posted lots of pictures and it’s not like I’ve bent over backward to hide my identity or be anonymous or anything (I’ve intentionally kept some things a little ambiguous, but I’ve mostly put myself out there). It was flattering and fun but also a little weird. I think I’m able to share so much personal information about myself so freely because I really feel like this is almost a journal. I love the readership and appreciate all your kind comments and constructive criticism but it still feels….kind of unreal. If that makes sense. Like I’m sending an email to a friend. Not like I’m really publishing information about our salary, our debts, our spending, etc. etc. etc. for the entire world to see and judge (though that’s exactly what I have done, heh).

Anywho ~ it freaked my hubs out a bit, too. And since then I’ve been posting fewer pics. Again – doesn’t take a rocket scientist to figure out who I am – but I’ve been intentionally adding in a little extra layer of privacy, at least for my kiddos’ sake. Soooooo, I’m not going to be posting any pictures of the house and will leave many of the details private.

BUT, BUT, BUT –

that doesn’t mean I’m not going to share anything!

Let me tell you a little about the house.

It’s just under 2,000 square feet (we’re currently living in 1,500 square feet so it’s definitely an upgrade in size). It’s four bedrooms (up from 3!), has two living areas, a dining room (and small breakfast nook), 2.5 baths, and a decent sized yard. It’s in our same general area (we love our current rental’s location) in a mature neighborhood with lots of nearby parks, hiking/biking/jogging trails, good schools & charter schools, and friendly neighbors (we’ve already met a couple of them)!

The house is nearly 30 years old, but has had lots of renovations. The current “owners” are a company that does flips. They’ve put in new floors, bath tubs, retiled the shower, put in new toilets, kitchen countertops, kitchen appliances, ceiling fans and fixtures, new paint, new water lines (to get rid of the old polybutylene), and many other upgrades. As part of our negotiations we also got them to do a new HVAC unit and new duct work, and new section of plumbing (where tree roots had grown into a pipe – shout out to our readers, a couple of whom suggested this might be a problem given the home’s age). There has been a LOT of work on this home in the past few months. We also feel like we’ve gotten it for a great deal. We know what they paid, we know what our offer was that was accepted, and hubs (as a flooring contractor) has guesstimated the amount of work that has been done, etc. and we think the owners can’t be making much off the property. It’s been sitting on the market for several months at this point so they’re probably just cutting their losses and moving onto the next property. But it’s worked out well for us.

I love the house but, even before moving in, I know it’s not our “forever home.” It doesn’t have space for a home office like I’d wanted, is not walking-distance from a jogging trail (it’s close, but not walking distance like our current rental house), and it’s kitchen isn’t the best design or configuration. The yard is a hot mess (I’m talking chest-high weeds all around. Zero in the way of landscaping or maintenance), it’s not in our ideal neighborhood, and the bedrooms and bathrooms are all a bit on the small side.

Before we decided this was “the one” we looked at a LOT of houses. Some that were right around our target price range (mid 100’s) and some that were on the higher end (high 100’s/low 200’s). We talked about the trade-offs of buying a little bit cheaper home that doesn’t quite have everything we want versus buying a more expensive home with all the wish list items. Ultimately, we decided that this was best for our family. It suits all of our immediate needs and has lots of great perks plus some added bonuses we hadn’t even considered (e.g., it has a wood-burning fireplace, which will be fun in winter; and it’s in a gated community, which is nice for safety/security). But probably the biggest decision factor was the price-point of the home.

Our goal is to continue pushing forward with debt-payoff. But now my sights aren’t just solely focused on the student loan debts. Now I’m considering the possibility of paying off a home mortgage. Living fully debt free. Wild, right?

I’ve done some basic calculations and I think it could be possible….within 5 or 6 years time. Yeah.  100% debt freedom. For real.

I don’t want to get ahead of ourselves (we don’t even own this home yet and I’m already fantasizing about paying it off – what is wrong with me!? lol!). But blogging here has changed me. Working so hard toward this awesome goal has changed me. It’s changed us as a family. And it just seems so plain to me. The way to financial independence is by being fully debt-free. With a home in the high 100’s or low 200s that would be further from our reach. But this home makes it possible. We would be living within our means. Nay, we’d be living below our means, really. Our mortgage would be such a small percentage of our monthly income that it’d still be easy to continue making big debt payments. And after the student loan debt is gone, we would snowball that money into the mortgage payments. And then into savings and retirement. And into travel and gift-giving and charity work. And on and on and the sky is the limit!

We have some pretty big dreams. Pretty lofty goals. And we see this house as part of that puzzle. A piece that is going to help us live a comfortable lifestyle and continue making progress toward our larger goals.

And we’ve definitely fallen for it. So there’s that.

Now let’s just cross our fingers that nothing falls through and it becomes ours in…oh a week or so, I suppose. : )

How long was your home-buying process? Ours has been ridiculously long, but my mom (a real estate broker) thinks a lot of that has been due to our jobs. I’ve only been in my current position one year and, prior to that, hubs and I were both self-employed/working contract-based jobs. That’s caused us to need a LOT of extra paperwork to prove our income, show that deposits in our accounts were due to business transactions (and not drug money I guess? I don’t know!), etc. Plus the negotiations, themselves, took forever. Lots of back-and-forth initially and again after the home inspection. Almost walked away a couple times in the process and ended up sticking it out after coming to terms. It’s felt like a total roller coaster (and it’s been a solid 2 months at this point since our first offer was submitted). I hope it’s all worth it in the end!!! : )


The Green Eyed Gimmies

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Has anyone read the classic Bernstein Bears book (or seen the associated cartoon) about the Green Eyed Gimmies?

It’s really a lesson for children about how they should be happy with what they have and not always be looking for something new/keeping up with the Jones’, etc.

But it’s hard not to make those social comparisons, you know? It’s a natural human thing to look at our neighbors and feel a little pang of jealousy when they have the shiny new car or insert-whatever-the-new-thing-is.

Recently I experienced a little bit of my own Green-Eyed monster, but not about something you might think.

Does anyone else read Stephanie’s blog – SixFiguresUnder?? I have to admit I’m more of a casual reader, but I think someone recommended it back when I first started blogging here and, every couple of months, I’d head over to her blog to read their latest debt update.

It’s been a minute (so I’m a little behind on this), but I recently went to check out their latest happenings and was shocked to see that they’re now DEBT FREE!!! (read Stephanie’s debt free post here).

Now, I don’t know Stephanie. Never met her in my life. I have no connection to her or her family. But, as a reader, I was happy for them! Becoming debt-free surely must be an incredible feeling!

But I was surprised by an underlying feeling….that of envy.

Stephanie and her family managed to pay off $144,000 in debt.

My starting debt was $145,000.

Stephanie started blogging in September 2013.

I started blogging just a few months later, in February 2014.

Our incomes started out about the same – Stephanie’s first reported monthly income was under $4,000 (from here). Our first monthly income was just over $5,000 (from here).

Our incomes even increased around the same time. Her husband, a lawyer, opened his own practice which dramatically increased their income. I found a full-time job, which dramatically increased our income. The big difference were that they had fewer fixed expenses so a larger proportion of their income was able to be put toward debt. We do pretty well in our house, too, but Stephanie’s family has us far beat both on groceries (one of our big expenses) and on rent/utilities (they live for free in their in-laws’ basement for now).

We’re different people. Different situations. But the desire to make comparisons is strong. I knew they would finish their debt journey before us. When Stephanie started blogging they were already down $40k, starting right at $100k in debt. And we didn’t even start our debt journey until a full 6 months after them. So obviously we would finish after them! We had different start points; it’s only natural we’d have different end-points.

Even so, I felt jealous.

Ohhhhh how I yearn to know what it’s like to be fully debt-free! To not owe anything to anyone.

I love listening to the debt-free screams on Ramsey’s radio show because it’s so motivating and inspiring. But somehow, reading it online caught me off-guard (my own fault, because I wasn’t following their story closer…I should’ve known it was coming up!!!)

So I try to remind myself about all the AMAZING things we have already accomplished!

Our only remaining debt is for student loans and medical debt. That means we own ALL of our possessions 100% outright (ahem – at least until we close on the house). NO ONE can come and take ANYTHING from us as a repossession or as collateral on an existing loan. Electronics, furniture, even vehicles = all are OURS!!!

And we’ve paid SO MUCH DEBT off already! Yes, we still have a long way to go. But I’m proud of where we’ve come from!

For newer readers, you might have a hard time believing that when I first started blogging here, many didn’t think I’d make it. There were whole GOMI threads dedicated to the Blogging Away Debt bloggers (Yes, I know about them. No, I don’t visit them often. And we’re rarely discussed anymore for that matter). People thought I was an airhead. Naive, dumb, blonde – whatever you want to call it.

I was a different person then than I am now. A lot has transpired in the past almost 3 years!

I still have my “airhead” moments. I am human, after all. But I’m learning.

I got my first job! I have been working hard at negotiations (for title, raise, etc.)! I’ve learned about buying (and selling) homes! I’ve been working on the ever-elusive work-life balance. And even as we’ve increased our spending on “life” stuff (e.g., date nights, family entertainment, foods-not-cooked-from-scratch), we’ve still continued to put a good proportion of our income toward debt each month. In a typical month, about 25% of our take-home pay goes straight to debt. That’s in addition to our savings goals, our monthly expenses, etc. I’m proud of that figure.

Recently I received a comment on an old post. Someone asked why I was still saving for retirement, contributing to my kids’ college accounts, and saving for an emergency fund all while trying to get out of debt. Dave Ramsey talks about how when you split priorities, you never get anything done. That’s why he’s all about focusing on one thing at a time.

I responded simply that “I’m not following Ramsey’s plan.”

I wish I could. I wish we could be that focused.

But that’s not our reality.

Most of Ramsey’s followers get out of debt in under 2 years. I believe their average is 18 months.

We’re (nearly) 3 years deep, with perhaps another 2-3 years to go.

That’s too long to put off life and living, in my opinion.

We didn’t start out with only $45,000 in debt. We had $145,000 to contend with. And a lot transpires in the 5-6 years it will take us to be fully debt-free. Too much to go without for so long. As an anecdote – I remember asking my mom for foaming hand-soaps from Bath & Body Works for my birthday one year. I distinctly remember nearly tearing up about it. I felt so deprived that I would never be able to buy a stupid $5 soap because we were using the cheap bulk soap from Costco and refilling our hand soap pumps. How I longed for those Bath & Body Works soaps. Would I ever get to have fancy soaps ever again? Surely not! We couldn’t justify a $5 soap in our tight budget!!!

I couldn’t live like that for a half decade or more. Some are stronger than me. Some may be less materialistic. Some maybe just don’t care a single iotta about their soap. And, to be fair, I still refill our hand soaps with the cheap bulk stuff from Costco. But this is just a silly example to discuss the idea of “living” while in debt-repayment. We were BARE BONES for a solid 2 years. I’m talking not a single new article of clothing, not a single professional hair cut or color, not a single vacation, all homemade foods/all the time, all from scratch/all the time, etc. I made my own baby wipes, for goodness sake!

And I just couldn’t do it forever.

At the end of the 2 year mark we made a conscious decision to loosen up the purse strings a bit. For us to make it through to the end of our journey, we just had to allow some room for “living.” Now we have monthly date nights (and we pay a babysitter to watch the girls!), we went on our first real vacation (cruise 2016) this past April, I’ve bought new clothes – mostly for work, but when I need a new pair of jeans I just buy them instead of continuing to mend and re-mend the hole-in-the-crotch of the pair I already own (true story – I mended the same hole 3 times when I first started debt repayment. I refused to buy anything new and was determined to “make do”). The point is that we had to find what worked for us so that we can make it to our own finish line.

How that looks will be different for every family.

Maybe your family can scrimp and save and not spend a penny and be out of debt in 12 months. I would be the first to congratulate you (and I’d try to not be envious!) : )

But maybe your family needs a little bit more room in the budget for discretionary spending. Maybe that’s what you need in order to survive the long haul to debt-freedom.

I don’t regret the beginning of our debt journey. I think the first two years of super-strict spending gave us the jump-start we needed and put us in the right frame of mind to succeed. But there came a time when we also needed to be realistic with ourselves about our own limitations. We couldn’t keep at it forever at that pace. Rather than fall off the wagon entirely, we made the conscious decision to loosen up the budget a little. It can be a slippery slope and it’s not the right choice for everyone. But it was the right choice for us. And we’re still making killer progress, thank you very much (latest debt update here).

So maybe this is a “do what I say, not what I do” moment.

When you feel yourself becoming envious over someone’s debt journey, remember that it’s just that – someone else. It’s not you. It doesn’t reflect on you one way or another. It’s a different person with a different situation under different circumstances. What might work for them may not work for you and vice versa. Be kind to yourself, forgive yourself, and never give up.

My debt-free date may not be right around the corner….but it will be here before we know it!

Until then, I’ll keep you in the loop about our latest adventures on the journey.

Hugs,

Ashley

 


Grin and Bear It!

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Hi all!

I hope your weeks are off to a nice start! It’s still stifling hot here in Tucson (mid 90’s over the weekend), but we’ve been packing in lots of fun fall activities! This weekend we went to a pumpkin patch and the kids had an absolute blast! As they get older it’s so fun to really celebrate and enjoy the holidays together!

Today I just wanted to give you the latest on my Navient grievance that I aired last week. Basically….it’s gotten worse (is that possible? yes, yes it is).

My payment due date is the 10th. Recall I was being overcharged by $500/month and was told they would not have it resolved by my October payment, but it should be shortly thereafter. So I logged into my account like a fun little game – how much have I been charged???

Only I see a long line of red exclamation marks and this message:

PAST DUE!

PAST DUE!

PAST DUE!

PAST DUE!

PAST DUE!

On every one of my Department of Education loans (strangly, the federal loans were fine).

Ummmmm…..how can that be? I’ve been on auto-pay for over 2 years!

I call up to Navient and am informed that – somehow that no one can quite explain – my auto payment withdrawal has been removed from my Department of Education account. ALL of those loans are past due.

I asked if this was related to their overcharging me to the tune of $500/month?

They don’t know.

I asked if this would affect my income based repayment?

They don’t think so.

I asked if the monthly debit has been corrected?

They don’t know.

Then they ask if there’s anything else they can help me with.

Ummmm…..you didn’t really help me with anything, now did you???

(Ultimately, I was instructed to make a one-time payment for the month of October, then wait a week and call back again to see if everything has been fixed. Yeah, won’t be holding my breath holding out hope for anything positive to come of this).

And as if Navient’s nonsense isn’t enough to make me rip out my hair – our house closing has been pushed back. After the inspection we’d negotiated for some additional repairs to be done and I guess it’s taking longer than expected. So our closing has been pushed from the 14th to the 28th, pending everything getting done in time. Bummer.

On my last Navient post a couple people commented and asked about private student loan consolidation companies. Just to reiterate – I’m not doing anything until the house deal is closed. But I’ve been researching and looking at SoFi. They’ve got good user reviews and seem to be a reputable company. But we have such a broad readership here, I’d love to ask for your opinions!

Have you ever done a student loan consolidation through a private company? What were your experiences like? Good, bad, ugly, etc??? Would you recommend your company? Why or why not? I’d love any info you can provide!

And, just for fun, do you have any fun Fall plans on the docket this month?? I wish we lived closer to an orchard! There’s one about 90 minutes away, but our weekends are pretty full. Maybe in November we could make it out there – I’d love to take the girls to pick apples and just enjoy the experience! Do you have any annual Fall traditions as a family?


Ashley’s September 2016 Debt Update

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Better late than never, right?

After I realized I’d missed our extra student loan payment, I initiated it on October 1st (a Saturday). It showed “pending” in Navient’s system for several days and didn’t actually show up as being applied until Wednesday. I don’t like posting on Wednesday (I like to leave it for Hope), so here we are with our SEPTEMBER debt update nearly a full week into the month of October. So sorry about the late update!

Check it out:

PlaceCurrent BalanceAPRLast Payment MadeLast Payment Date Original debt, March 2014
Navient$635276.55%$2225September$74218
ACS Student Loans$85856.55%$25September$8215
Balance Transfer Student Loan #2$53500% (through April 2017)$500September$7650
Medical Bills$57110%$25September$9000
Balance Transfer student loan #1$00% -Paid off in March 2016$5937
PenFed Car Loan$02.49%-Paid off in January 2016$24040
License Fees$02.5%-Paid off in April 2015$5808
BoA CC$07.24%-Paid off in June 2014$2220
Mattress Firm$00%-Paid off in May 2014$1381
Wells Fargo CC$013.65%-Paid off in May 2014$7697
Capital One CC$017.9%-Paid off in March 2014$413
Totals$83,173 (Aug balance = 85,553)$2775Starting Debt = $145,472

Several exciting milestones are coming up:

First, we’re just over $3,000 away from our next $10,000 milestone.

Second, the next digit we’ll be seeing is in the $70,000’s. That’s significant because our half-way mark is just above $72,000. So we’re just a little over $10,000 away from the half-way mark! Everyone keeps saying after we cross that threshold that the debt will just start melting away! It’s felt like a long, hard slog so far the past nearly 3 years of debt-repayment. I’m VERY excited to get over that hump.

Third, do you recall how one of our big 2016 debt goals was to pay $30,000 toward debt this year?? Check out where we now stand in terms of that financial goal:

Month 2016 GOALS 2016
January Goal: $3500 $4013
February Goal: $1000 $1261
March Goal:  $1000 $2134
April Goal:  $2000 $1521
May Goal: $2000 $1325
June Goal:  $4000 $3500
July Goal: $4000 $4928
August Goal: $2500 $1374
September Goal: $2500 $2775
October Goal: $2500  
November Goal: $2500  
December Goal: $2500  
Total Goal: $30,000 $22,8310

It’s going to be tight, but we’re right on track to hit that goal. It’s so crazy to think that many families in America are struggling to survive on a total household income of $30,000. Meanwhile, we’ve been blessed with an increased income that has allowed us to put that much toward debt! I mean – whoa! Moment of silence or respect or something. That’s a massive figure!

So much to be thankful for and still so many exciting milestones on the horizon.

Full steam ahead!!!

Do you make annual financial goals? What were yours and how are you doing on them?


Navient is Back At It Again

by

Just the latest in my long, long history of grievances with Navient.

When I realized I’d missed that extra debt payment in September, I was carefully reviewing my account history and something jumped out at me that caught me off-guard:  I’m being over-charged roughly $500 per month.

I’m embarrassed to admit that I hadn’t noticed the egregious error earlier. I blame it on my busy schedule, but really there’s no excuse to have not noticed such a HUGE discrepancy.

Here’s the short of it (I’m trying to run out the door for work, so sorry this is a little rushed)….

My minimum payment is about $130/month. When I re-did my paperwork for Income-Based-Repayment over the summer I was notified it would go up a little bit (like $20 or $40….I can’t remember now, but not much). Only, that’s not what happened. For the past two months (August & September), my auto-debit withdrawal has been over $650. I  always make extra debt payments on top of the minimum and pay – in total – over $1,000 each month. So it didn’t make a big difference in terms of actual money spent because I always put well extra into Navient anyway. But what it did is take my money and mis-appropriate how it was spent. Instead of putting all the extra (over and above my true minimum of about $150-ish) toward the unsubsidized loans, it was being equally distributed across all loans. That’s not at all how I would appropriate it myself.

So I called up there to ask what the deal was. And I was told that apparently there was some issue. The system “shows” that my payment should only be the $150-ish payment, but the auto-debits are actually around $650ish (yes, I know. That’s why I called). It was a total error on their part. They would put in paperwork to get it fixed. It probably won’t be fixed by the October debit, but then it will go back to normal in November.

The representative was all happy with herself for putting in whatever notes to bring it to their internal auditor’s attention. Happy that she had resolved the problem.

 

Ummmm……lady. You get this means you’ve been overcharging me to the tune of $500-ish per month for what will now be 3 months. That’s an extra $1500 you have basically stolen from me. Illegally. You think that’s just going to fly??? (yes, I would have given them that extra money anyway with my extra payments but, again, I would appropriate it completely differently than they have done; also, with the way they’ve done it, a great deal of that money has gone straight to interest instead of toward principal reduction).

The best I could get out of the representative was a promise that after the situation has been resolved, I can call back and they will allow me to re-allocate those extra funds toward the loans of my choice. Doesn’t really make me feel to warm and fuzzy inside. I also have about zero hope that this actually gets resolved as promised. I mean, Navient has quite a long history of lying to me. Repeatedly. All the time.

So there’s that.

Today, though, I’m going to choose to focus on the positives. I’m thankful that we have that extra money. that the extra $500 Navient is literally stealing from me does not force us to go without food, housing, or utilities. That we have the money to spare.

I’m going to try to let it go. I’ll call back toward the end of the month as they’ve requested and see if it makes a difference at that time. In the meantime, I just have to let go of the anger and the frustration. I don’t have any space or time for that negativity in my life.

But you better believe…..as SOON as the house stuff is done (currently set to close on Oct 14th! EEEK!!!), I’m consolidating with a private company as fast as humanly possible. I’m SO STINKING SICK of Navient and their absolute incompetence (at best) and downright illegal activities (at worst). Sick of it. Also, my last ACS loan has notified me that it’s going to be migrated to Navient, too. Fabulous. Last time that happened my loan “switched” from being subsidized to being unsubsidized. An issue that I spent months dealing with and countless hours (and even wrote my legislatures and involved a 3rd party group for problem resolution) and, ultimately, nothing happened. They just f-ed me. And they got away with it. So I’m pretty excited to rid Navient from my life once and for all. As SOON as the closing is behind us, I’m done with them.

Have you ever experienced serious over-charging by a student loan company? Trying to focus on the positives, what’s something good that’s happened recently or something fun you’re looking forward to this week? To share one of mine, we had an awesome weekend! Saturday was packed full of fun stuff – two different kids’ birthday parties. Sunday was full of relaxation. A nice mix of fun/activities and family time/relaxation. The perfect weekend balance!