Post-Bonus Post

Another quick update, because I’ve made my largest loan payment to date — $10,000!  I’m not positive if all $10k will go to principal, but the most that could potentially go to interest is less than $100 (since less than that accrues every month now!).  The puzzle will remain the same either way – 276 pieces.  Over halfway there!

$44,695– estimated remaining balance by original loan:

  • $2,625 $0 (freshman year – undergrad)
  • $8,500 $0 (1L subsidized loan)
  • $12,000 $3,695 (1L unsubsidized loan)
  • $8,500 (2L subsidized loan)
  • $12,000 (2L unsubsidized loan)
  • $8,500 (3L subsidized loan)
  • $12,000 (3L unsubsidized loan)
  • $3,500 $0 (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 down to five of my original loans–and should get rid of the second 1L loan in the next two months, I’m thinking.  As promised, I put 6% of my bonus towards my 401(k) (and got an awesome profit sharing contribution), $750 towards my HSA, and booked tickets and a place to stay in California for five days this summer.  The only thing I have left to book for the trip is a rental car.  I also bought a sweet new blender, and I’ve been working on trying to mix up my smoothie game.  

I’ve already filed my taxes this year, and I should be getting a pretty good sized return–thanks little man! I’m hoping to put another $3,500 (minimum) towards my loans once that comes in.  I have not put any rent payments toward my loans – yet.  I have to transfer the money from our house account to the bank account that’s connected to my student loan, and that takes a few days.  But I’ll be putting another payment through as soon as that clears.

(I’m trying to make a border at this point, so that eventually I’ll just be filling in the middle–I realize that right now it just looks very unorganized)


Pre-Bonus Post

Just checking in to say that I’ve received my compensation numbers for next year, including my bonus.  I’m getting a much bigger chunk in added retirement contribution that I’ll be fully vested in right away.

My plans for my bonus are to put almost all of it towards my loans. I’m considering making five exceptions:

1. Mini-vacation.  One of my friends is getting married in California (where she now lives, though her wedding is in a different part of the state).  I’m going to take this opportunity to do a mini-vacation.  The area where her wedding is is not cheap, so we’ll be paying for flights and potentially a vacation condo instead of a hotel room.  I’ll probably try to book that next month, but I’m keeping a watchful eye on flights.

2. A blender.  I currently have a cheap $20 Walmart blender that I got after my slightly nicer one died.  It’s eh.  I’d like to get one that I can easily make baby food with, so I have my eye on a fancy one.  On an unrelated note, I just bought a $30 rice cooker to make oatmeal with in the morning.  Seeing as I’ve been spending $3 a day on oatmeal, this purchase should pay for itself in a couple of weeks.

3.  Towels.  When I lived in my last place I had shared laundry.  Shared with many many people.  The front-loaders always had a bit of a smell to them, which I feel like my towels picked up, and I’ve never been able to 100% get rid of it.  So I’m hoping to buy a new set of bath sheets and towels.  Probably at Target, because I’m still pretty cheap.

4.  HSA.  I’m putting $750 in my Health Savings Account.  The last two years, I’ve put in $3,000-$4,000 to ensure that we had enough to pay for hubby’s LASIK, and having the boy.  I’ve still got a couple thousand in there, and I have been contributing an amount from my paychecks, but I feel like a little extra won’t hurt (and I’m going to get hit with a lot of taxes on the bonus, so I might as well avoid tax on some of it).

5. 401(k):  Like the last two years, I’ll contribute just enough to get the employer match.

Basically everything else will go towards student loan reduction.

I’m also getting a small promotion, and an accompanying raise.  The raise isn’t anything too too crazy, but I’m happy with it, and it’s more than the cost of living adjustment that I generally expect to receive most years.  My 401(k) has an annual increase program, and I’m signed up to bump up my pre-tax contribution 1 percentage point to 9%.  I also contribute 2% on a Roth basis.  I’m thinking next year I may make a similar increase to my Roth contribution.  But either way, I’ve attempted to schedule the increase to coincide with the change in salary, so that I don’t even notice the increase.  I’d like to eventually get up to contributing 15% myself — and the 5% (3% match, 2% not tied to my contributions) from my employer will be icing on the retirement cake.

Here’s 225 pieces of the puzzle–my current balance is $54,695.  If the last two years are any indication, I should be getting my bonus tomorrow, and will do another puzzle update this weekend.

2017 Goal ($51,926)

For the last two years, my primary goal was to pay off $20,000 in student loan principal.  Thanks to wedding gifts, and some help from my man working, and six rent payments, I was able to accomplish this in 2015. Thanks to a good bonus, some extra from savings, and two months of rent payments, I was also able to meet my goal for 2016.

In 2017, my goal will be to pay off $30,000 in principal. A pretty significant jump. Here’s why I think it may be possible:

  • A small point: my interest rate is lower. Every penny counts.  Because my rate was cut in half, only about $100 a month is currently going towards interest.  That’s $100 more a month than last year, so over an additional $1,000 for the year.  Total reduction from my minimum monthly payments should be over $10,000.
  • Most of my bonus will go towards loan repayment. The last two years, a big chunk has gone to stockpiling my HSA.  Shout out to my little man, on a complication-free birth.  Hoping for around $10,000, but let’s say $8k here, to try to be conservative. (Running total: $18k)
  • I’m hoping for a raise/promotion. An extra $100 in payments a month wouldn’t hurt. Either way, I hope to bump up my 401k contributions at least 1 percentage point.   Edit:  I can confirm a raise (and promotion!) is happening.  But instead of stockpiling my HSA from my bonus, I decided to add a bit from every paycheck, so my paychecks have gone down a bit so far this year (raise isn’t effective for another few pay periods).  So post-raise, and bumping up my 401(k) contribution, I don’t expect my take home to increase much, if at all.  I won’t plan on anything here as far as loan payoff goes.
  • Barring a house emergency/major issue, most (if not all) rent payments will go toward loans.  That’s an extra $8,000+ (Running total: $26k)
  • Our tax refund was lower in 2016, because of the man working in the back half of 2015. Now he’s mostly staying home with little man, so I expect we’ll get more because of that. We also have little man, and hopefully an associated tax credit. Again, most of this will go to loans.  Hoping for about $3,000 (Running total: $29k)

That gets me conservatively (hopefully) to $29,000, so I’m really hoping that $30,000 is doable, and I’m open to reevaluating halfway through the year to see if there’s a “stretch goal” I can achieve.

I will, of course, have a couple of mini-goals as well. I’m not looking to load up my HSA by a ton this year with my bonus, but I am contributing some from every paycheck. My employer contributes $600 a year, and I’m hoping I can add $2,000-$2,500 net to that over the course of the year (barring actual medical emergencies requiring me to actually use some of this money).  In 2016, I had a mini-goal to add $10,000 to my 401(k).  I’m thinking that I should make $13,000 my goal for personal contributions to retirement this year.  My employer contributes about 5% (some matching, some unrelated to my contributions), which I’m not counting here.  

I’m not going to lie to myself this year about increasing savings for the year.  Things come up throughout the year, and if I have extra, I’m going to want to use it to meet my aggressive student loan payment goal.  My goal has been to pay this off by the time I’m 35, and that means I need to make major progress.  Once this is paid off, I can really shift my focus to savings.