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.

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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.

Financial (and Other) Fitness ($50,147)

Good morning/afternoon/evening,

Last year, my husband and I each received $200 as reimbursement for our gym membership.  This year, the gym will cost about $850 total for the year, so the $400 reduction in cost is great.  This year, the reimbursement program has changed — now they’ll reimburse $300 each for our membership, BUT we have to each “check in” to the gym 120 times during the course of the year.  I’m not one to turn my nose up at $600, so I’ve been trying to be diligent about going each weekend day (done so far) and to try to take opportunities to go during the week when I get a chance.  Hopefully I’ll hit the 120 time minimum, and also get in slightly better shape while I’m at it.  

Or at the very least, I’ll play in the pool with the baby.

2016 Recap

So I shared earlier that I met my major goal of paying off $20,000 in student loan principal this year.  But I’ve some more financial progress outside of my student loan(s).

401k

Vested/Total December 2015: $19,610/$26,992.52

Vested/Total December 2016: $41,865/$48,126

Each year at the end of December, I become vested in more of my company’s matching and general retirement contributions (until I’ve been there five years total and become fully vested), though a portion of their contributions were fully vested after 2 years.  I don’t include my 401k or my IRA in my net worth calculation, partially because there’s no way for me to only include the vested portion in Mint, as far as I can tell, and I’d rather be conservative.

Roth IRA

December, 2015: $2,843

December, 2016: $5,101

* I have not been contributing as much to my IRA this year.  I used to contribute $100 most paychecks.  Since the little man was born, I’ve split this so that $50 gets direct deposited into his 529 plan, and $50 goes to the checking account that I make transfers into my IRA from.

Mortgage

Balance December 2015: ?

Balance December 2016: ($172,973)

I checked last year’s post, and it said that we’d paid off $3,085 in principal last year.  I can’t figure out how to access my old mortgage login, but based on last year’s number, I’d estimate about $1,500 was paid off on the old loan, and since the refinance in July we’ve paid off another $2,026 in principal. The lower interest rate is hugely helpful here.  

Savings

Progress is nil — or worse, negative.  But the two main reasons for this were closing costs to do the refinance (well worth it) and extra payments on my loan (also worth it).  I look forward to the year that I make progress in my personal savings account, but for now I’ll have to be happy with making significant progress on my student loans.

2016 Major Goal Met! ($52,277)

Just a quick update to share that I met my main goal, and paid off $20,000 in loan principal this year.  This is probably where I’ll end up for the year, but I’m pretty happy with my progress, and hoping to do even better in 2017.

This is slightly under what I paid off last year (didn’t realize that the total on my last post for 2015 was to the same point in 2015, and not the total for the full year — I must have had an additional payment at the end of the year that put me over the edge.

$56,614 – remaining balance by original loan:

  • $2,625 $0 (freshman year – undergrad)
  • $8,500 $3,614 (1L subsidized loan)*
  • $12,000 (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)


This is 216 puzzle pieces–10 more than my most recent puzzle post.   I’m so close to halfway there, and should hit it in February.

* On the off chance anyone besides myself is actually reading this.  I’m wondering if I should go in order of smallest to largest on my tracking here (all $8,500 loans first) or by school year ($8,500 then $12,000 each time)?  These are actually all consolidated together, so it doesn’t make and real difference, but I’m thinking it might help me to be able to say that I’m 100% done with paying off my first year of law school — or something like that.

I Cheated… ($51,838.92)

And bought my iPad before I’ve reached my goal of paying off $20,000 in principal this year.  But only because I was able to buy it for almost $150 less than the usual price.  Glad I didn’t impulse buy it immediately when my computer broke.

But fear not, this purchase will not deter me from meeting my goal to pay off $20,000 in principal this year.  I was referred by a coworker of mine for my most recent student loan refinance, and we both received $200 as part of their referral program.  My $200 went right to my principal.  My first monthly payment to the new loan will happen at the beginning of next week, and if that doesn’t take me over the top, I’ll make another small payment towards the middle of the month.

The yellow bar is last year — it doesn’t show hitting $20,000 because of issues with tracking one of my loans, but not an issue this year.  I’ll be posting an update to my puzzle once I hit this milestone.  And I’m excited for the new year, and posting my new goal.  Until then…

Consolidation/Refinance (Part 2)

Part 1 was published quite some time ago.  Originally, Part 2 was intended to be a discussion of further refinancing my loans, into a couple of chunks, including possibly moving a portion of my big loan into a variable interest rate.  I abandoned that thought when I wasn’t happy about the rates SoFi would have offered me.

But here I am posting a Part 2, so I must have something to share.  Heck, I’ve got two somethings:

Mortgage Refinance

In my last post, I noted that I didn’t add much to my savings account this year. My goal had been to add $3,000.  Part of why this didn’t happen is that we refinanced our mortgage in July.  I got a couple of Zillow alerts that our estimated house value had gone up. Originally we put 5% down, so our interest rate was a (terrible) 5.25%.  Part of this is due to the fact that our house is a multi-family.  Because our house value has increased approximately $30,000 in the two years we’ve owned it (some due to improvements we’ve made and some due to the market), we now have 20% equity, and were able to refinance to a 3.5% rate for a 20 year loan.  I think our principal and interest payment went up by less than $10.  Paying off our mortgage 8 years earlier for a mere $10 a month? I’ll take it.  Our mortgage payment will go up a little bit more because of increases to our taxes and insurance premium, but those are unrelated to the refinance and would have happened anyway.  Our payment is still less than it was before we qualified for the homestead tax exemption.

Student Loan Refinance

Here we go again! I’m looking into refinancing my current 15 year loan (about 13 years left) to a 5 year.  Unlike my prior refinance and the mortgage refinance, where the monthly payment didn’t change all that much, if I do this my minimum payment will almost double.  In theory, I should be paying over $1,100 to my student loan every month, though my minimum payment is currently about $555.    The lowest possible rate I could get would be 1.95%.  That’s an awesome rate.  If I’m able to get that, I’d only be paying about $100 in interest every month.  Changing my minimum payment to (approximately) $1,050 will give me a lot less wiggle room, but I’m hoping it will provide some motivation to tighten my belt elsewhere (I’m looking at you, Amazon and work lunches).  I also only put two months of rent payments toward my loans this year–last year I did six.  I’m looking to put pretty much every rent payment toward my loans in 2017.  This should give me a bit of wiggle room in months where I wouldn’t otherwise put the full $1,100 toward my loan payments.

So hopefully this goes through and I’m able to start plowing through loan principal in what remains of the year and into 2017.  I’ve got some ambitious goals for 2017 that I’ll post about once I hit my big 2016 goal.
EDIT: Drafted this a while ago, but just getting around to publishing. I’ve been approved, and the payoff check should be getting sent any day now. More details in my next post, whenever that is.