Mini-Milestone/January Recap

As of this month, I’ve paid off $9,099 in principal from Law School Loan #2.  Since LSL#1 was $9,000, this is the most original principal (I’m not counting capitalized interest) paid off on any loan to date!  Hopefully I’ll eliminate the remaining $8,900 in the next couple of months.

On a somewhat less positive side, I wanted to pay an additional $50 toward my loans each month. Because all of the days I can schedule payments have already passed, I made my first manual payment on my largest loan.  When I went to check it out today, I saw that $0 went to principal–the entire payment went to interest! How crappy! If I had made the same payment on my law school loan, it would have all gone to principal.  The good news is that when my scheduled payment goes through next month, more of it will go to principal, but still…kinda sad to see.

As of this morning, my total principal balance is $75,215.71.  That’s 123 puzzle pieces.  I feel like you can see where the two puzzle pieces will go that will get me up to a quarter of the way there.



Next month, there should be a lot more progress, as I’ll get my annual bonus.  Once my 2nd Law School Loan is paid off (maybe in March, but more likely April), I will probably hide these accounts entirely from Mint. This will mean I lose them for history purposes (so my historical loan balances will be incorrect), but should make my net worth more accurate.  And I can always unhide them if ECSI decides to start cooperating again.



Consolidation/Refinance (Part 1)*

Greetings all!

I was reading a Dave Ramsey Facebook post today, and the topic was debt consolidation.  Someone mentioned that you don’t get the snowball effect/small wins with knocking out individual loans when you consolidate.  As for the snowball effect, I’ll disagree there, because when I pay off one of my loans now, my total minimum payments go down.  I can take this extra and put it into the “snowball.”  With my consolidated loan, my minimum payment never goes down, in spite of the fact that the equivalent of a whole bunch of mini loans. With separate loans, you have the option to not add your former payment on your closed loans to your payments on your current loans.  Having one loan doesn’t give me this option/flexibility.

As for the motivation of having individual loans eliminated, I can see that.  I paid off my five small undergraduate loans, and it was gratifying when an individual loan would be eradicated.  Especially since once I got serious about eliminating these, I was eliminating one every few months.  It will definitely take me more than a few months to get rid of my big daddy former federal consolidation loan.  While I can’t officially un-consolidate, I’m going to try to think of my big loan as a bunch of mini loans.

I originally consolidated most of my federal loans (and accrued interest, I’m sure) into one new federal loan.  I’m not sure that I had a reason for this (separate servicer, maybe?), but my three $3,000 Perkins loans were not included in this consolidation.  This $9,000 was also known as Law School Loan #1 (date of death, November 2015).  The remaining loans were:

  • $2,625 (freshman year – undergrad)
  • $8,500 (1L subsidized loan)
  • $12,000 (1L unsubsidized loan)
  • $8,500 (2L subsidized loan)
  • $12,000 (2L unsubsidized loan)
  • $8,500 (3L subsidized loan)
  • $12,500 (3L unsubsidized loan)
  • $3,500 (Grad Plus Loan – bar fees and prep)
  • $1,200 (Irresponsibility Loan)
  • $2,500 (Irresponsibility Loan)
  • $1,200 (Irresponsibility Loan)

These last three (maybe last four?) I will refer to as my “Irresponsibility Loans.” Each year I was in school I was given an aid package consisting of scholarship, federal Perkins and subsidized/unsubsidized loan, and a $6,000 loan from my law school (this  is the $18,000 original balance of Law School Loan #2).  I also had work study that I did not use, because I was able to work for more money/valuable experience elsewhere. This package did not meet the ridiculous “Cost of Attendance” for my school. I worked to make up the difference the first two years.  In my third year, when trying to figure out how I was going to pay for two bar exams and a bar prep course, I learned that I could take loans over and above the Cost of Attendance to cover the cost of one bar exam.  This was news to me — I didn’t realize I could get any loans other than those offered to me in my aid package. I could have been applying for Grad Plus loans the entire time, to cover the gap between my aid package and the cost of attendance.  REALLY glad I didn’t know this my first two years, or my total debt amount might be higher (and the interest rate on these was not pretty).  In my last semester, I took out these extra loans which covered all my bar costs, as well as made my life more relaxing generally.  Partially because I bought a new bed and mattress.  Though, to be fair, I love that damn bed, and my previous mattress was torturing my back.  Digression over, except to say that by consolidating these loans, I don’t have to see the shame that is these Irresponsibility Loans.

Moral of the story: these federal loans totaled $72,525.  After fees and interest, my consolidation loans were higher than this, but I’ll use this figure for simplicity (and because I’ve since paid any such interest).

Today the current incarnation of this loan has a balance of $66,316, meaning I’ve paid off a whopping (sarcasm) $6,209.  BUT when I view it as separate loans, it looks more like this:

  • $2,625 $1,316 (freshman year – undergrad)
  • $8,500 (1L subsidized loan)
  • $12,000 (1L unsubsidized loan)
  • $8,500 (2L subsidized loan)
  • $12,000 (2L unsubsidized loan)
  • $8,500 (3L subsidized loan)
  • $12,500 (3L unsubsidized loan)
  • $3,500 (Grad Plus Loan – bar fees and prep)
  • $1,200 $0 (Irresponsibility Loan #1)
  • $2,500 $0 (Irresponsibility Loan #2)
  • $1,200 $0 (Irresponsibility Loan #3)

I’m still planning on eliminating Law School Loan #2 as my next goal, but I will definitely look at my large loan as 8 loans going forward, so that I can actually feel more progress as I reduce the balance.  While I’m at it, I could separate Law School Loan #2 by year, leaving me with:

  • $6,000 $0 (1L Law School Loan)
  • $6,000 $3,412 (2L Law School Loan)
  • $6,000 (3L Law School Loan)

*It’s been over a month, and Mint is still having difficulty connecting to ECSI.  While I’ll be doing some baby furniture spending with my bonus, most of the amount I receive (after deductions, for taxes, 401(k) and HSA) will go toward Law School Loan #3 — so while I’m hoping it gets fixed soon, I hope this loan will be gone soon enough that it won’t really matter, and I can go back to including net worth updates with every post.

2015 Recap! ($72,307)

So I’ve already posted something close to a final loan payoff figure for the year, but I do need to provide the final amount).

In 2015, I paid off (approximately) $20,671 in student loan principal!

(Puzzle still to come — I’ll be honest, it would have only been 4 more pieces from the last post,so close to a quarter of the way there–the math is like 4.92 puzzle pieces or something–but not quite)

But wait, that’s not all. There are a few other financial milestones I’ve made this year, that I haven’t given their proper due all year.

401(k) Contributions

This year, I contributed $10,574 to my company 401(k).  Because I just became partially vested in some of my company’s matching and other contributions, I also became entitled to another (approximately) $2,000.  My total amount vested as of today is $19,610.

Roth IRA

I opened a Roth IRA earlier this year, and tried to put about $200 a month into it. Once things are more settled in 2016, I might see if there is a way to direct deposit into this account, instead of having to do a transfer (which gives me the opportunity to transfer it elsewhere).  But for now, my balance is $2,843.

HSA Contributions

With the baby coming and Mike’s eye surgery, I actually spent a huge chunk out of my HSA this year, and have almost met my deductible for the year (I might actually hit this once I get all of this year’s bills). But I contributed the maximum of $6,050 this year (plus $600 coming from my employer), and ended the year (as of now) with $3,761 in the account.  Up from $2,638 last year.

Mortgage Payments

I round my monthly payments up to the nearest $100 and send the extra to principal.  This is around an extra $40 a month.  Doing this for the last year and a half has cut three months off of my payment schedule. Doesn’t seem like much, but every time I do it, it helps more and more.  Total we’ve paid $3,085 in loan principal this year.  I’d estimate our equity in the house to be about $14,000, which assumes the house is worth exactly what we paid for it–I feel pretty confident that with the minor improvements we’ve made, and the housing market generally, it’s probably worth more than what we paid, so I think this is pretty conservative.

When I’m able to calculate my net worth through Mint, it doesn’t include any of these items.  Total they add up to $40,214 that I should conceivably be including in my net worth (though I prefer to see the more conservative number).  If I had included these, my net worth would be ($32,093).*  This number might be even be positive in a year.

(*caveat: I don’t include my hubby’s separate accounts here, again to be conservative, and because I don’t like to think of his money as accessible, even when it is. With that said, the money in the house account is as much his as it is mine, and ditto for the equity in the house.)

That’s not so bad.  I was feeling pretty down today about my ever-dwindling savings, but this helps me see how much progress I’ve made over the past year (and last couple years). Doesn’t mean I don’t have a LOT of budgeting work to do, but I need to not be so hard on myself.