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Ashley’s April 2017 Debt Update

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Hi All,

May the fourth be with you! (heh, get it – May 4th? okay enough of that.)  : )

It’s another month and another opportunity to put a little bit of debt behind us.

Here we are and I feel a bit at a crossroads. I haven’t included the IRS in our debt spreadsheet because – honestly – I’m still so embarrassed that we owe so much!!! I’ve worked out a payment plan and we will be paying a hefty sum – $1,000/month – until the debt is fully resolved. It will be a large household expense over the next several months (year+). Maybe I’ll eventually add it to the spreadsheet just so it can be properly acknowledged but, honestly, I just can’t add it yet. It would push us back up over the 1/2 way milestone and just causes so much emotional distress by increasing our debt numbers that I just can’t fully face it yet. I mean – it’s been “faced” as far as the IRS goes (in terms of admitting the debt, establishing payment plan, etc.), but for some reason I can’t “face” it here with you guys. Not yet, anyway.

So that’s my one disclaimer. My debt spreadsheet remains with all our old/pre-IRS debt numbers and our monthly payments are going to be negatively impacted because the monthly payment indicated in the debt tables will NOT include our IRS payment.

With that caveat, check out April’s debt progress:

PlaceCurrent BalanceAPRLast Payment MadeLast Payment Date Original debt, March 2014
Navient - Federal 2 (unsubsidized)$11,0565.8083April$82,433 (all school loans, combined)
Navient - Federal 3 (subsidized)$86225.8025April
Navient - 2 (subsidized)$85026.5533April
Navient - 7 (subsidized)$72026.5528April
Navient - 8 (subsidized)$63766.5525April
Navient - 9 (subsidized)$85026.5533April
Navient - 10 (unsubsidized)$97686.5571April
Balance Transfer Student Loan #2$6000% (through Sept 2017)$400April$7650
Balance Transfer Student Loan #3$43690% (through October 2018)$75April$4594
Medical Bills$00%$1215Paid off in April 2017$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$64,997 (March balance = 68,714)$1,988Starting Debt = $145,472

So as you can see, we “only” paid $1,988 in debt in April. I say “only” in quotations because obviously that’s a huge sum of money. But we’ve been trying to pay closer to $3,000ish/month, so it’s a big decrease from our goal number. Though, again, this does not take into consideration the $1,000 payment to the IRS. I’ll do a goal update post soon just to check-in with numbers and take a pulse of how we’ve been doing so far this year in our financial goals. With the IRS hit, some of our goals are going to have to be re-thought. But I’m optimistic overall. Our biggest/most central goal is to pay $30,000/year toward debt and I think there’s still a good chance we can hit that number. We’re aiming for it!

I’ve also been re-working our budget to account for the changes in salary and expenses that are coming up. My part-time job officially ends this month. I have about another week worth of work, but my last paycheck was received last month (womp, womp!) My new rate of pay (from my big raise) doesn’t go into effect until July. So May and June will be TIGHT!

This is probably the first time in my debt-repayment journey (of 3+ years now!!!) that I’m a little bit nervous about the possibility of moving backward. I mean….these two months are going to be really rough. I’ll be writing a post soon to talk about different savings strategies and ways we’re going to try to reduce spending to only absolute necessities, etc. Be thinking about it because I could certainly use all the tips I can get!!!

I’ll be back soon! In the meantime, have a great week!

 


Ashley’s April 2016 Debt Update + NEW Balance Transfer Loan

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Hi all!

Thanks for your patience with me as I was out of town and kind of absent (especially in the comments) for awhile. I only logged in a single time on our week-long vacation and then had to spend a few days playing catch-up with work-related obligations once I returned before really rejoining you here. LOTS of posts to come very soon, but for now let me get up this overdue April debt update!

Perhaps the first thing to note is that I initiated another balance transfer loan! I’ve labeled it in my debt spreadsheet as “Balance Transfer #2” (to distinguish it from the first balance transfer, which I paid off in full prior to initiating this new transfer). See my reasons for why I’m okay with using balance transfer loans to help pay down student loan debt in this throwback post.

I transferred $7,500 from my Navient student loans onto my Capital One credit card. I will have 0% APR for 12 months and paid a one-time $150 transfer fee. In my debt spreadsheet I list the new balance transfer debt as $7650 (which includes the $150 transfer fee). I also altered the “original debt” column of my Navient loan, reducing it by $7500 (since that debt has been moved to the balance transfer loan).

Here you go:

PlaceCurrent BalanceAPRLast Payment MadeLast Payment Date Original debt, March 2014
Navient$731686.55%$1476April$74218
ACS Student Loans$85966.55%$20April$8215
Balance Transfer Student Loan #2$76500% (through April 2017)$0transfer initiated April 2016$7650
Medical Bills$58360%$25April$9000
Balance Transfer student loan #1$00% -Paid off in March 2016$5937
PenFed Car Loan-2.49%-Paid off in January 2016$24040
License Fees-2.5%-Paid off in April 2015$5808
BoA CC-7.24%-Paid off in June 2014$2220
Mattress Firm-0%-Paid off in May 2014$1381
Wells Fargo CC-13.65%-Paid off in May 2014$7697
Capital One CC-17.9%-Paid off in March 2014$413
Totals$95,250 (March balance = 96,175)$1521Starting Debt = $145,472

One thing you’ll notice is that nothing was paid toward the new balance transfer loan in April. I initiated the loan toward the end of the month, so I’ll begin making payments this month (May).

Also, I edited the APR for my Navient loans. It used to read 6.55%-8.25%. But the balance transfer loan covered the 8.25% APR loan in full, so now all that remains are student loans with 6.55% APR. Wahoo! Excited to be chipping away at those loans and to get rid of my last remaining >8% APR debt!

Also, you’ll see in an upcoming budget update post that we continue to save toward our Emergency Fund and the down payment for a new home. This impacts our debt payments, as we are prioritizing savings above debt for right now. We plan to begin house hunting soon-ish, and once that’s all locked away we’ll again return our focus to paying down debt with a vengeance. In the meantime, I’m still happy with our current level of debt payments. Not too shabby, especially considering all our savings! Look for the budget update post soon!

I hope everyone’s weeks are going well! I’ll be back soon! : )


Don’t Copy My Lucky Escape

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I always wanted to travel from a very young age. Even though color television was relatively new there were plenty of movies at the cinema and color magazines with articles on faraway places to feed my mind. I was never quite sure how I would realize my dreams. After all commercial passenger flight was not like it is today. As time passed it became obvious that many of these places were indeed in reach. An uncle actually spent some time in the Merchant Marine. He crossed the Pacific many times visiting lots of countries in South East Asia though he was rarely in port for long enough to actually explore many of those countries in depth. I didn’t see myself as a seaman, but his stories reinforced my desire to travel. It would be all about earning the money and finding the time.

Not without Problems

Years on I have pretty much fulfilled my dreams, but it has not been without problems along the way. There is plenty of temptation which sometimes manages to push common sense to one side. As the real estate market grew common sense should dictate that the equity created should be used sensibly; retirement is an obvious thing to consider. I must confess that at times remortgaging funded travel which although immensely enjoyable brought no financial return.

Credit Cards

Most people have succumbed to credit cards. They offered readymade credit limits. They should really be used for convenience. Instead, I managed to build up some core debt; balances on a range of cards and each of those cards were costing me penal interest at the end of each month.

Fortunately, I saw the problem growing and was able to rectify the situation before it got too serious and beyond control. The danger is that credit card balances can somehow escape being regarded as real debt because until the recession came many didn’t feel they would have to be paid back in full. The recession ended any feeling of complacency because as people’s finances crumbled demands often poured in. I had managed to negotiate a consolidation loan before the recession struck. I cut up all but two of my credit cards immediately and paid off every outstanding balance incurring such high-interest rates. It did mean for the next five years I had a fixed monthly payment to make; 60 months and all that money I had used to travel was paid back at a realistic interest rate.

Lessons

I’ve learned a few lessons in this exercise. Certainly I have enjoyed my travels and hope to continue to do more as retirement approaches. I’ve been fortunate that my income justified the consolidation loan because I certainly lacked some financial self-discipline at times. Credit card companies were perfectly happy to issue cards to anyone who wanted them. Indeed, they seemed to offer them without being asked. It is a trend that seems to be returning today even though the recession has only just receded. If anyone asks me now about cards I would certainly say that they should only be used for their convenience, and not a way to get a loan. Every monthly balance should be paid off in full; I do this now although it took me a while to realize its importance.

There is nothing wrong with borrowing money responsibly. There are loans available for those with the ability to pay the loan amount in full, and the interest rates can be less expensive than what you are paying on cards. That was what I found in my case. I was fortunate to have both a full-time monthly check and money made part-time with my online writing. I write on a variety of subjects based on what my clients want. In addition, if anyone invites me to write about finance, I volunteer advice for nothing. The recession produced many casualties. A huge proportion of them were not as complacent about borrowing as I was. Circumstances brought them down.

I think back and feel relieved that my complacency did not cause me more problems. I’ve seen most of the world and intend to continue to see more in the coming years. Credit could have been my downfall, yet borrowing solved my problem with a sensible consolidation loan. If you look at your own situation and see some of the warning signs that I have alluded to then seek advice. If you have the time and patience, you can do the research on your own, and you can end up apying a lot less on your debt over the long run as you pay it off.


Debt Update – January, 2015 – Hope

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And time for the big reveal…after the dust has settled from the house sale, the car sale and the refinance of my highest interest loan.  Here are my numbers as of today!

Debt NameCurrent BalanceInterest RateMin. Mo. PymtOriginal BalanceStatus
TOTALS$46,794$240$83,566
Checking Account$7410%$0$741Going down, Jan 2015!
CC Intro Rate - Retail #2$35003.99%$39$3500Retail #2 refinance
Personal Loan - Car$500012%$96$5000Car Sale Difference
Credit Card - Consumer$504313.90%$105$4,974Minimum Payments
Student Loan$32,8052.875%$0$31,687Forbearance until Feb.
Credit Card - Retail$025.99%--$2,265Refinanced - Dec, 2015
Car Loan - Accord$00%--$1,900Paid Off - Dec, 2015
Car Loan - NV$06.79%--$31,138Sold - Dec, 2015
Line of Credit$015.95%--$1,248Paid Off
Credit Card - Retail #1$00%--$413Paid Off
Property Tax$00%--$700Paid Off

So a couple of things to note.

CC Intro Rate – Retail #2: I was able to refinance my high interest debt (Retail Card #2) to a 6 month introductory rate of 3.99%…so of course, my goal is to pay it off within the 6 months.

Personal Loan: I had to take out a personal loan in order to pay the difference in what I owed on the NV and what I sold it for.

Because of all the stress, changes and a little bit due to the holidays I did not accomplish my December goal of paying off the utility bills on the old house or closing out the checking account debt so those are #1 on my list this month.

So goals for this month…in priority order:

1. Pay off checking account debt

2. Finish paying off utility bills for old house.

3. Work on paying off CC Intro Rate – Retail #2

With the selling of the van, I’ve freed up approximately $1000 per month…$696 car payment, insurance payment and gas.  I am confident I can accomplish these three goals this month!


It Isn’t All About Income

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Yesterday I read something over at Budgets Are Sexy that really resonated with me.  J. Money read an article from Mr. Money Mustache (a pretty famous blog that I follow).  In this article MMM said:

“The most important thing to note is that cutting your spending rate is much more powerful than increasing your income.  The reason is that every permanent drop in your spending has a double effect:  it increases the amount of money you have left over to save each month, and it permanently decreases the amount you’ll need every month for the rest of your life.”  

I still stick to my guns in saying the easiest way to make fifty dollars is to save fifty dollars.  I had this mantra since I began my coupon journey about five years ago.  This was a time when I went from a single man living alone to having a built in family.  Feeding three people was an eye opener to say the least, especially when you were allotting yourself about $100 per month for food before.  Remember I was in the food industry, and usually always fed myself at work.

What this article did for me was realize that it really isn’t my income that is a problem here.  I have been making it work, and know full well that we could live on the income we do have.  It is really all about eliminating all the unnecessary monthly expenses.  

The biggest being DEBT.

Now I am not saying that I won’t challenge the other expenses, but debt is the biggest.  I have been paying anywhere from $800 to $1,000 every month for the last four and a half years, just on debt!  

What if I was using this amount to put away for savings and retirement?  I would be in a totally different situation than I am today.  

This is also not saying that I will not be looking for opportunities to increase my income.  Because let’s be honest the two go hand in hand.  If I increase my income it will be a much faster route to get out of debt and start becoming the provider that my family knows I am.  

So for the month of July I will be reviewing more of my expenses and seeing ways to cut them out of my life.  Who’s with me?


Debt Update

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Sorry for the delay in getting this update up, but I’ve really been productive with the extra time (minus being sick, of course.)  To be honest, I feel like I’m starting all over again on this journey with revised debt, new debt and a new perspective. With that being said, while I typically have a plan, months in advance, I am really wanting the communities input on how I should tackle this debt now.

So here it is, listed from high interest rate to lowest with the Estimated Pay Off date blank as with your help I’m ready to re-prioritize my plan:

Debt as of June 10, 2014

Name Balance Interest Rate Minimum Payment Estimated Pay Off
Retail Card $3297 25.99% $99
Line of Credit $838 15.95% $218
Credit Card $5,080 13.9% $150
Car Loan – NV $31,043 6.79% $696
Student Loan $31,687 2.88% deferred
Joint Account $889 0% $0
Car Loan – Honda $1,900 0% ASAP

Details

Retail Card – This is a retail card that I use for my business. You’ll notice the balance has gone up several hundred dollars since I first listed this one. That was for ink for my laser printer I needed for a project, an unavoidable cost, but I am ready to be rid of this high interest debt! The minimum payment required doesn’t ever seem to make a dent so I need to really increase the monthly payment to see progress.

Line of Credit – This debt shrinks quickly as I make payments so I’m ready to finish it off and free up that $200 towards something else.

Credit CardAgain, the minimum payment doesn’t seem to make a dent here and I had started to free up some credit until this past month. I can go either way on this one as far as priorities go.

Car Loan – NV – This is our GIANT family car, a necessity but a huge money pit!

Student Loan – Speaks for itself.

Joint Account – This is new debt. I’ll explain it in my short and sweet version. During my marriage, I handled the money. Since my marriage ended, I have continued to pay 1) his life insurance and 2) his car insurance for one car that he kept but is in my name. The joint account was left open so that I could continue to pay these bills to make sure they were paid. At times, he would overdraw his personal accounts and then it would clear out this joint account (which only I used.) The account was overdrawn this last time by $1,300. I had enough and closed the account AND stopped paying his life insurance policy. I’ve paid down to the current amount this month and need to get it paid off to avoid affecting my relationship with the bank. This is just what it is. I will address the insurance stuff with a revised budget shortly.

Car Loan – Honda – Again, a short sweet version of this new debt…for the last year I have “stored” one of my parents’ cars since they moved to Texas. It was an informal agreement that the car would be made available for me to purchase for my twins when the time came that they were ready to sell it. (They left it here when they moved to Texas so when they came to visit we would have an extra car for them to use.) The time has come that 1) my twins have their learner’s permits and are now 9 months from getting a driver’s license (a privilege, not a right, but one I will be thrilled with as a single parent with lots of running around to do.) And 2) my dad wants me to pay for the car before the boys drive it for valid safety and insurance reasons.) We’ve agreed to $1,900 and he would like me to pay it off ASAP.

Note: I have removed the debt to my dad as we are both in agreement that I need to focus on my credit affecting debt in order to get in the position to refinance the house in my name.


Ok, so give it to me straight, what should my plan of action be? On a typical month my minimum payments are $1,163, I typically have a snowball payment anywhere between $200-400, sometimes more. I am listening EARS WIDE OPEN for your advice here.


The Good, The Bad and The Ugly from May

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The Good News…

Whatever knocked me flat the last couple of weeks is slowly dissipating, thank you for your concern.

In addition to my newer part time job, I’ve picked up one decent sized web design project and two on-going small part time consulting jobs. By my educated estimates, if all goes well, this could increase my monthly take home by about $600. (This doesn’t include the web design monies as they would be more lump sum.)

The Bad News…

Last month I had anticipated receiving payment for a larger project and thus had budgeted for that income. Through no fault of my own, that project is at a stand still and thus I was about $2000 short on my budgeted income for the month.

Because of this I cleared out my newly started “emergency fund” of the whopping $150 I started with.

The Ugly…

Because of the short income, debt payoffs were a mere trickle, just barely making minimum payments across the board.

In addition, there is now some new debt, some from an expected source which I had hoped to put off a bit longer but that is no longer possible and some from a “I should have known better” source.

It has been a VERY hard week back from our wonderful get away financially, but as my sickness clears so does my head and I see the silver lining.  Lots of planning going on in my head.

(It’s Tuesday night now when I’m finally able to hold thoughts together long enough to write this.  Needless to say, I haven’t gathered any financials together yet.  After working my part time job in the morning, I hope to sit down and do that. I appreciate you bearing with me.)


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