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.

 

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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.

2016 Goal!

The Big Goal

So now that the 2015 Goal has been met, it’s time to unveil my 2016 Goal.  In 2015, my goal was to pay off $20,000 in loan principal.  In 2016, my goal will be to pay off…$20,000 in loan principal.  What?!

I was hoping to be able to put a big goal out there, but we’re looking ahead to spending a lot of money on the house, and we need to replenish the house account as a result. So I’m not planning on putting any rental income into my loans in 2016.  Or if I do, it won’t be until the back end of the year.  Maybe one or two rent payments’ worth.

I’m hoping to pay off $800 a month in principal with my standard payments ($550 to my remaining law school loan — currently less than $50 a month going to interest, but hopefully dropping quickly; $554 to my former federal loans — currently about $270 a month going to interest). That only adds to $9,600.  The other $10,000+ will need to come from my bonus, our tax return and anything else we can throw at it.  I’m trying to plan as though hubby won’t be working, so that any money he does bring in will be gravy.  If things are going really well at mid-year I may consider a stretch goal of $25,000.

Smaller Goals

Some more financial goals, other than this biggie, that I’d like to throw out there for accountability purposes:

  • Contribute $10,000 to my 401(k)/IRA – I’m actually a little unsure on this one, but I’m thinking that I might change my contributions to Roth contributions from their current pre-tax status.  I’m currently contributing 10% of my salary, plus a to-be-determined bonus contribution, but given that the Roth contributions are after tax, I don’t know if maintaining this percentage would reduce my paychecks too much to be doable.  I also have a small Roth IRA that I try to contribute $100 a paycheck too, but this doesn’t get direct deposited into it, and therefore sometimes ends up elsewhere. This number doesn’t include my employer contributions.
  • Contribute at least $4,000 to my HSA – Most–if not all of this–will come from my bonus.  That will take a big chunk out of this goal pretty early in the year, and then halfway through the year I’ll reevaluate my needs, and see if I want to contribute more.  The nice thing about this is that I can change it at any point in the year.  I just have to be careful not to mess it up like I did this year.
  • Save $3,000 in my primary savings account — This doesn’t seem like a lot, but I find myself dipping into savings more than I would like.  Some of this spending in 2015 was for more major items (car fixes, wedding things, extra loan payments, buying a dishwasher and a new tv), but some of it is just not maintaining a budget.  I don’t keep much in savings, because most of my extra money goes to loan payments, but hubby has always been a saver, so even though my accounts look pretty skimpy, we’re not completely without savings.
  • MAINTAIN A BUDGET – This means evaluating how much is expected to come in each month, and how much I expect to go out.  So I’ll need to go through my expenses this year, and see what my unusual expenses were (Amazon Prime, car registration and taxes). I’m debating buying YNAB for this, and I’d be interested to hear feedback on how much it has helped people. I’m hoping to work on evaluating this in the next coming days so I can start planning for a monthly amount to set aside for these expenses.

Overall it’s a lot to think about for 2016, and I think pretty ambitious, in spite of it being pretty similar to my 2015 goal.  These goals are contingent on two major things:  a good/great bonus and a healthy baby…

2015 Goal Met!

achievement

As of my most recent payment, I’ve paid approximately $20,411 in student loan principal this year!  I still have one more payment for $300 going through today, $250+ of which I expect to go towards principal.

Next year should be slightly easier to track, as I won’t be guesstimating the interest and principal amounts for any of my loans, because each servicer gives me those details as soon as they process the payment.

I definitely wasn’t fully confident I was going to make this goal, and pulling some from savings and wedding gifts definitely were a big factor.  Now it’s time to think about my goals for 2016…

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November Recap

Just a quick update to show my payoff progress for November.  I didn’t do my usual rent payment, but hubby did contribute $2,000 now that his bank accounts have been shored up a bit.  Thanks Hubby!

We bought a wifi thermostat, so we hopefully won’t have to worry about accidentally leaving the heat on when we’re gone for the day, or when we’re in bed.  We’ll also get a rebate from the gas company for most of the cost of this.  Our insulation still hasn’t been put in yet.  Some kind of test for the insulation should be done on the 15th, and hopefully the actual installation will be shortly after.  Here’s hoping these two things help with heating costs this winter.

Our driveway, which was scheduled to be paved late last month, has not been done.  Our contractor cancelled on us the week they were supposed to do it, and we didn’t have time to find someone else who could do it for a reasonable price.  So we still have a good amount in the house account, but knowing how much is going to come out in the spring, I think I’d like to build the balance up to around $10,000 (or around $5,000 post-driveway) before I start putting rent payments toward my loans again.  The heating system in our tenant’s apartment is not ideal, and updating it will likely have to be done eventually, so we want to start planning and saving for that.

So there we have it.  Mint is still not connecting to my loan servicer’s site, but when I checked this weekend, my two loans totaled $76,818, which means 115 total pieces in the puzzle.  I’m so close to a quarter of the way there!

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HSA Mixup (Yikes!)

Still no net worth update, unfortunately.  Hopefully Mint will be able to connect before month-end.

Onto the topic at hand.  I’ve been messing with my HSA contribution in the last couple weeks.  Most of my contribution this year came from my bonus, but I added  a deduction from my remaining paychecks around September.  Clearly I didn’t really know how this worked, and changed it back to $0, then up to $5,000.  I was thinking the amount coming out of my paycheck for the remainder of the year was $5,000/24 (total number of paychecks HSA gets deducted from).  I had actually already contributed over $5,000 (with my employer contributions added) so I figured that either way, more than the annual maximum wouldn’t get taken out.  I was wrong.

So when I checked Mint last Friday morning, my paycheck was pretty much cut in half.  I checked my paystub and $1,250 had been taken out for my HSA.  Ooops.  The tiny paycheck I could deal with, but I’ve now contributed more than the annual maximum for this year into my HSA.  So I had to fill out some paperwork to get a refund of the overage, which will result in one more piece of paper I have to have in hand for filing my taxes next year.  But the good news is, next month my employer will add its monthly $50 contribution, and then I will be maxed out for the year, with no additional contributions from my paycheck for the next three checks.  And I should have about $4,000 in the account to carry over next year (barring my last two doctors appointments having a bunch of non-preventative lab work/tests).  Not that it matters for purposes of this post, but this account does not feed into my net worth, since I can only use it for medical purposes.

For next year, I’ll once again be putting in a large chunk from my bonus, and will potentially be adding a bit more throughout the year.  I definitely went back and forth on which health plan I should choose during open enrollment this year, but I think with the added HSA contributions from my employer for the high deductible health plan, and the MUCH smaller premium payments, the HDHP was the way to go.  I don’t know if it’s the case for all employer plans, but it looks like so long as I’m staying in-network (which I will certainly try to do), this is the cheaper option.  The benefits people recommended for those with the HDHP that you try to keep enough in the account to cover the deductible, but my goal is to have at least the out-of-pocket max in there before the end of 2016.

I also put about $200 into a limited purpose FSA, assuming any funds in there will get used for fillings, and if there is any left over I may think about getting a pair of glasses for night driving, but even if I were to lose it, it would be a pretty small amount of money (though it’s also possible that it all gets spent in the first half of the year).

Temporary Connectivity Issue?!

I paid off the first of my two law school loans!  Now I’m down to just the remaining one and my huge former federal loan.  This is the biggest loan paid off to date, about six years early!  I’m hoping to pay off the second law school loan in the first half of next year — sometime after bonus and tax return time.
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It’s definitely a little daunting to see how big this loan is, but after my payment goes through later this month, it  will be just under $10,000–only a little bit higher than the original amount of the first one.

Onto the title of this post.  Mint.com hasn’t been able to update these accounts so I can see the $0 since before I paid it off on the 10th.  These are the accounts I used to have to manually put in (I remember tracking these at $22,000 — it’s awesome to see that they’re around $10,000 now). I’m a little nervous that this connectivity issue isn’t going to be temporary and I’ll have to go back to manually tracking these.  Which would be really annoying, but might give me more incentive to pay them off.

It’s only mid-month, so I won’t be updating my puzzle, but this loan being paid off means the man and I put a good chunk of money towards this this month.  I thought I was going to make my payoff goal, but my numbers on Mint aren’t jiving, and I’m not sure why.  I’ll have to look into a little further, but I’m pretty happy with my progress either way.  And I’ll definitely get to throw a bunch more puzzle pieces in at the end of this month, so I’ll be happy with the progress either way.

EDIT:  Blonde Moment.  The reason why there is a big difference between my calculations and the numbers on Mint is because these two account haven’t updated to show a $2,000 payment.  Literally the thing I was writing/complaining about.  Wow.

October Recap/Looking Forward

This month I looked at the amount I needed to hit my goal, and the amount of time left, and decided to pull $1000 out of my savings to put toward my next loan.  I also received our escrow reimbursement from our mortgage company.  Essentially we’ve been overpaying into our escrow account for most of the year because our taxes went down by about $100 a month.  So the $742 that we got back is scheduled to apply to my loan on Monday.  I won’t see the effect of that until next month, but it’s still this year.

We’ve definitely been pretty good this month about getting things done (although we haven’t been so great about not spending money).  We rented a dumpster to get rid of the debris in our back yard, and have scheduled a contractor to come in to put in walkways and pave our driveway.  That will make this winter so much easier, particularly if we get anywhere near as much snow as we did last year.  Lastly, we are looking to get a bunch of insulation added to the house, which will hopefully help us save on heating bills.  Not to mention, make our house more comfortable.  That last part is actually going to cost less than we originally anticipated, thanks to the rebates available through our electric and gas company.  All of these things will essentially wipe out our house account though.  So I won’t be making payments from that account on alternating months for a while, while we build that back up.  RIght now I’m looking forward to setting my goal for 2016, but I won’t count on any rent payments going towards it.

Other than the extra $1,000 (nothing to sneeze at) my loan principal payments this month consisted of my two standard payments, which reduced my principal a total of $1,764, bringing me to a balance on all loans of $80,371.  I’m happy to report, I am now at 98 pieces to the puzzle.

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(I’ll fill that weird little space in November — found the pieces!

Quick Update ($76,112)

I suppose it’s completely wrong to refer to these as monthly recaps anymore.  Maybe next month.

When I last posted my puzzle, I had 64 pieces filled in.  As of today, I’m up to 89! Woohoo!  This is two months of tenant rent payments (7 pieces/$1,400), some wedding gift money (8 pieces/$1,600) and a few months of regular plugging away payments.  I was pretty excited to add 25(!) pieces to the puzzle this morning.

I don’t know if I’ll be making the usual every-other-month rent payment in November.  We’re looking to do a bunch of stuff to the house — insulation and potentially doing some stuff outside to make our lives (and our tenant’s life) easier for the winter.  The insulation will likely be just under $2,000 (with serious incentives, which would otherwise make it way more). This will save us money on our heating bill this winter, and will reduce our taxable income a bit.  The other stuff comes at an unknown cost, and may seriously dilute our house account, which is why we might try to build it back up a bit before continuing to put some of it towards loans.

This year I’ve paid approximately $15,100 in student loan principal, with about a month and a half to go.  We’ll see how much of his newly acquired paychecks hubby wants to put towards them this year, but it’s possible (not admittedly, not probable) that I’ll make the $20,000 goal this year.  I heard from my mortgage company late last week, and our mortgage is officially going down $100 a month, and I’m getting a refund of $700 from overpayments to the escrow account in the last couple of month, which I may be putting towards the loans.  Either way, I’ll be pretty happy with my progress this year, and will look forward to setting a goal for 2016.

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(Seriously, this thing is almost 20% done!)