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Posts tagged with: costco

Moving Up Our Loan Payoff Date

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We made our first automatic student loan payment last week for the first time since we entered forbearance in March for the pandemic. It went through on the 22nd like usual, but I noticed afterwards that it wasn’t the usual amount.

Instead of $2,302.49, it was $2,268.04. I guess we should be grateful it didn’t catch us off guard by being more, but why $34 less?

Re-Amortizing Win

I contacted Earnest, our student loan company, to understand why. They said, “Our servicing platform will re-amortize loans that have any sort of payment protection applied, such as forbearance, deferment, skip-a-pay, etc. This is to ensure the minimum payment does not cause any borrower to make more payments than what was chosen in the original loan agreement, essentially exceeding the terms of the loan. Since you had forbearance for a few months, your loan was re-amortized upon exiting forbearance.”

Ah, gotcha. But here’s what they wrote that made my heart sing: “However, you’ve made extra payments which meant that your minimum payment didn’t increase like it does for most people who miss payments, but rather decreased.” It’s nice to know that this forbearance didn’t make matters worse for us!

I’m going to change our auto-pay back to $2,302.49, and keep trying to make extra payments each month. But all this got me thinking about payoff dates.

Calculating Exact Payoff Dates

I use a calculator on NerdWallet.com to see how many months until payoff. I wondered what would be the difference in payoff time if we went with that lower number and made no extra payments. After all, it’s only $34.45 difference. And this time, I figured out WHICH month of WHICH year.

Our principal balance is currently $282,386.71.
– If we paid $2,268.04, the payoff date is in 165 months, or March of 2034.
– If we paid $2,302.49, the payoff date is in 162 months, or December of 2033.

So three months. Not a huge deal. Heck, last July we were still making infinite payments, only paying off interest and rarely any principal. By August 2019 our payoff date was down to just 667 months, or 55 years, 7 months. We would have paid it off in 2075 when we were in our 90s. OH MY GOSH.

Sara's Student Loan Repayment History as of July 2020

But in the end of 2033, we’ll have a 23-year-old, 21-year-old, and 19-year-old. Our kids will be moved out and we’ll be in our 50s. I know it’s better than being in your 90s, but I just don’t want to wait that long to be student loan debt free!

Moving Up that Payoff Date with Extra Payments

I found this cool calculator on DaveRamsey.com that unlike NerdWallet, it includes the month and year of your loan’s Payoff Date. It will even produce your Full Payment Schedule. The greatest part, I think, is it also calculates what happens if you make extra payments. It compares your current timeline to the extra payment timeline.

So I calculated what would happen if we paid $500 extra each month on top of the $2,302.49:

Payoff Calculator with Extra Payments

 

We’d pay it off 3 years earlier in December of 2030, and we’d save $21,659.85! Dang, ya’ll.

Knowing the actual payoff dates makes this more concrete and real. I’m feeling a fire lit under me right now. I don’t want to be messing with this loan in the 2030s. We’ve already shortened our payoff schedule, and now I want to shorten it even more.

Travel Decisions

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It’s been very slow for my husband’s construction company. If you recall, this was an intentional choice late last year when we all but shut it down and he transitioned to full-time parenting and homeschooling our kids. He works nights from home part-time and this set-up has been working well for us. We make about the same amount we did when he was working full-time since we no longer pay a nanny.

Our trip to remote South Dakota was delayed when my husband had several construction clients call him out of the blue asking about availability. Since I’m working from home, it’s a great time for him to be working. Those 3 clients evolved into 6. Good construction folks are hard to find and word spread fast that my husband was taking a few jobs. July into August is going to be busy. School starts for our kids the first week in September so he has a limited window to get as much done as possible.

As my husband finished outlining the route to South Dakota last night on our road atlas (yes, we still use paper maps. Get lost in a remote area once with zero cell service and you learn that lesson fast), he was more silent than usual. He was highlighting the route, double checking the trucker maps on his phone and calculating fuel stops.

Then he kept flipping pages.

He pulled out a pad of paper and started scribbling numbers, his face scrunched in concentration. I walked over and saw the great state of Kentucky. “Um. I hate to tell you this, that ain’t South Dakota!” I said laughing, catching his mistake. I stopped laughing when I looked at his pad of paper. Tennessee. Kentucky. North Carolina. South Carolina.

“What if we just kept going? I’ll earn enough from these jobs to take a trek to the East Coast. This is a rare opportunity to travel for months. You are working remotely and the in-person classes for the kids have been cancelled” he said.

I’m supposed to find out how long I’ll be working remotely by the end of this week but rumor has it, I’ll be remote until early next year, perhaps longer. I thought his idea was beyond ridiculous but the more I thought about it, the more it grew on me.

Oh yes, I am aware this is going to open me up to some fairly harsh criticism for considering full-time RVing in a pandemic. I’ve seen the comments every time Hope travels. But the reality is, this is a weird opportunity and he can pay for it with his side work. We couldn’t afford it otherwise. Again, we are a fully self-contained unit so we only stop for gas (yes, I am aware of the chance of a breakdown but did you know breakdowns happen at HOME too??? Gasp!). We stay at locations for long periods, no bouncing around. We shop bi-weekly for groceries and we take the same precautions that we do at home. We mask up. We wash our hands. We stay home if we don’t feel well. We stay further from people than we do at home since we camp in more remote locations. I can’t pass it up.

Has anyone else had some weird opportunities thrown their way? These are strange times.