Blogging Away Debt

by Vicky Monroe

Last year, my partner and I had a long stretch of a few months when we weren’t able to make any progress on our mortgage. Luckily we turned things around and have been steadily paying down our mortgage for the past few months. We’ve been averaging about $2400 per month in overpayments.

The next time we make a principal payment (which should be this Friday), our loan will finally hit the $130s. Our loan started off at $179K when we bought our home in January 2021, so I’m pleased that we’ve been able to pay off about $40K so far.

We’ll Probably Make Less Progress This Year

Unfortunately, we probably won’t be able to make as much progress for the next few months. In my last post, I wrote about the dental work that I need, including oral surgery to remove my wisdom teeth and Invisalign, which the dentist said costs $4K to $5K. So a lot of our savings over the next couple months will probably be going toward dental work.

However, I’m planning to get a second opinion about the Invisalign. My partner has the most perfect teeth I’ve ever seen, and the dentist still recommended Invisalign. I don’t really care how my teeth look, so I want to make sure straightening them is medically necessary before I sign up to wear plastic aligners 24/7, which I suspect I won’t enjoy.

After doing some research, I found out that there can be some pain and discomfort with Invisalign. Honestly, I’m a big baby when it comes to pain (especially tooth pain), so I’m a bit wary. I may try a night guard first (I just found out I’m a teeth grinder) to see how I tolerate sleeping with a retainer before I take the plunge and get Invisalign.

If you’ve used Invisalign, I’d love to hear your thoughts and experiences in the comments, especially regarding pain and discomfort while wearing the aligners! I’m still planning to save up for Invisalign even though I’m unsure, because I don’t want to go into debt if I make the decision to get it.

Mortgage Cost Increase

Another reason we won’t be able to make as much progress on the mortgage is that the payment just increased. Our property taxes went up by about $80 per year, which isn’t bad on its own. However, our PMI increased by $230 per year, and our homeowner’s insurance went up by $475 per year. We’re going to try to shop around for a lower rate. But if we can’t secure a better deal, our mortgage payment will go up to $1500 per month.

Our mortgage payment started out at $1350 per month when we bought the house and has gone up steadily over the past two years due to fee increases. We can afford it, and it’s better than the rent increases we had to deal with when we lived in Boston. But it’s still a bigger payment jump than we thought we’d experience as homeowners and will affect our budget.

We’re already pretty bare bones expense-wise, so there’s not a lot of room to cut things out to absorb this increase. As a result, our savings rate will probably go down a bit. Combined with the dental work, we probably won’t be able to make as much progress on our mortgage in the next few months.

But life happens and you just gotta roll with the punches! We may look into side hustling a bit more to help with some of these expenses, but luckily we don’t absolutely need to. And that’s something to be thankful for!

How is your debt repayment going? Let me know in the comments!

2023 Financial Goals – Outlook and Updates

Finally Dealing With My Dental Issues

Replacing Eggs With Cheaper Alternatives And Planning for Kids

by Ashley

I recently shared an update on the progress of my debt repayment. And while I may have put my student loans on the back burner for the time being, I’m full steam ahead on paying down my car loan. Because things have shifted a bit, I wanted to do an updated post on my financial goals. We’re approaching the end of the first quarter and it’s a good time to assess where we’re all at financially and make any tweaks or changes needed in our budgets.

A review of my 2023 financial goals

I have 4 main categories of financial goals: short-term savings, longer-term savings and investments, debt, and travel. I’ll touch on each below, but you can refer back to my goals post from December for a more nuanced discussion of each of these categories.

Short-term savings

I have several short-term savings categories. I keep these separate through a CapitalOne360 online savings account. There are two types of people: groupers & splitters. My husband is a grouper. Before me, he had one savings account for all of his short-term savings needs. Me? I’m a splitter. I have a whole bunch of separate accounts so I can track my savings needs separately. I can absolutely dip into a different account if needed. For example, when dealing with a legal crisis a few years ago I depleted my emergency savings and then dipped into my other savings to cover the rest. But in general, I like to keep things nice and tidy and separate.

Emergency Fund – 2023 Goal: Get fully funded at $5,000 – DONE! I was close in December and was able to get it fully funded in January. Haven’t touched it since (fingers crossed!)
Car Repair Fund – 2023 Goal: Get fully funded at $3,000. This is a revolving account. When I use it, I refill it. But it’s nice to have for when I suddenly need pricey car repair work. – DONE! Happy to say that I made the final deposit just this month to bring the savings balance to $3,000. Now it will sit and I will feel safe knowing that I have money to cover car repairs if needed.
Semi-Annual Fees – 2023 Goal: Get fully funded at $1,000 – Done! I was able to bring this up to fully funded in February.
Student Loan Savings – 2023 Goal: Get to $4702 to pay off the lowest balance student loan – UPDATE: Back-burner. At the time of my goals-writing in December, this account had $1481 and it now has $1832. In December, I’d said my goal was to save $150/month, but I’ve been a bit below that threshold. I’d diverted some of my savings money to pay for legal fees, which are now resolved thankfully. If I boost my goal up to $275/month, I could have enough to pay off my lowest student loan by the end of the year. That’s my “reach” goal, but this is a lower priority to me than my car debt. See below.

Debt

I’ve got two debts: my student loans and my car loan. You can see my recent debt update here.

As mentioned above, the student loan is a bit on the back-burner. I’m not paying toward the loan directly and, instead, I’m putting that money into short-term high-yield savings. My goal is to pay off the student loans one by one when I’ve got enough money saved to pay it in full.

I haven’t made my March car payment yet (it’s coming up!), but it should bring my car loan balance close to $11,000 flat.

In terms of goals, I love the idea of trying to have my car paid for in full by the end of 2023. It’s certainly a “reach” goal, but if I get toward the end of the year and find myself only a couple thousand off, I’d be inclined to “borrow” from some of my shorter-term savings accounts to make this a reality.

Investments

These are longer-term savings – contributions to retirement, 403(b), HAS, FSA, 529, etc. The only change I’ve made since writing my original Goals post was to slightly increase my 529 contributions up to $100/month (from $80/month previously). A negligible amount. I’d love to further increase long-term investments, but I’m dedicated to getting out of debt before increasing my current contribution levels.

Travel

In my 2023 Goals post, I talked about some of our upcoming travel. We went to Disney and San Diego in February and we’re planning a cruise this summer! We’d budgeted $3,000 for Disney, and came just below budget at $2818. It happened to rain the entire time we were in southern California (what happened to “it never rains in Southern California?!”), but we still had a blast and used it to our advantage as crowds were a lot lower than normal. The rain altered some of our plans (no Zoo this time around), but we didn’t let it damper our spirits. Nothing has changed with these goals – we are still anticipating and saving for our future travel so we can pay for it with CASH. That’s the BEST feeling in the world!

Here is how I’d rank-ordered my 2023 financial goals, along with relevant updates:

Rank order of goals:

Investments – these are paid first, most coming from our paychecks prior to being deposited. For that reason, these are #1. But I do not anticipate increasing any investments at this point.
Emergency Fund – until I get back to $5k, this is my #2. – DONE!
CarMax – I’d originally said I wanted to make double payments every month. Update: I’ll need to put even more than that toward the car to get it paid off by end of the year! Closer to $1200ish/month. It’s a reach goal, but this is a biggie for me!
Travel – My goal is always to over-estimate and have extra money left over. We did that for California and I think we can do it for the cruise as well.
Other short-term savings – DONE! I plan to keep the revolving savings fully funded, but no new money needs to be added, so I’m good on this one.

All in all, I’m in pretty good shape. Reviewing my goals and seeing my progress helps me have a renewed sense of urgency to get my car paid off ASAP! Time to start assessing the budget and seeing where I can cut back and scrimp and save to throw all my extra pennies at this car loan!

Blogging Away Debt Our Journeys to a Debt-Free Life

Debt Update and Mortgage Increase