May 2014 Recap

Image

May 2014 Overview:

It’s pretty much 6 months into our 2014 Goals, and I was super excited this evening to realize that we’ve paid off $11,522 of our debt since January! Sure, we probably won’t be able to keep that momentum (since a good chunk of that was our tax return back in February), but we’ve managed to pay off our Car Loan AND the original Citibank balance! Read on for how we did that this month!

Image

Snowflaking: $320 to the Car Loan!

  • $270 – This month, L only went to daycare part time because H is off in the summer. The cost was $390 instead of the budgeted-for $660. This went to the car loan!
  • $50 – We only paid for half of L’s lessons this month, so I snowflaked that extra $50 to the car loan as well.

How I Used My Side Hustle Check from May 30 ($1388):

  • Paid off two credit cards (we over-spent this month, ugh!): $319.10
  • Replenished sinking fund (see why I had to do that here): $600
  • PAID OFF THE REST OF THE CAR!: $70.53 (this is what was remaining after the snowflaking from this month went through, as well as the regular monthly payment of $172).

Notes:

  • Bonus: We got $50 cash back from our American Express card, which lowered our balance, and then I paid off the remaining amount.

Review of our 2014 Goals

Mintly Goal #1: Pay off our Citibank credit card

Verdict: SUCCESS! Well, now it’s back up to around $6,300, BUT… that’s because we transferred our high-interest rate Sallie Mae loan to a 0% interest rate on the card! So this goal is still in play. Hoping to have the new balance paid off by December, or even (dare I hope?) October?

Mintly Goal #2: Pay off our car loan

Verdict: SUCCESS! DONE DONE DONE!

Mintly Goal #3: Save for known expenses that don’t occur monthly (sinking fund)

Verdict: Yes. We’ve been great about saving it, but I dipped into it in a crazy moment and – while it turned out all right – it was a little worrisome wondering what we would do if we ran out of money! Fortunately, my mom lent us $300 (which we didn’t end up needing, by the way), which I will return this month.

Mintly Goal #4: Snowflake any extra money to consumer debt

Verdict: Yes! $320!

Mintly Goal #5: Track Goal Successes

Verdict: Yes! Car loan AND original Citibank balance PAID OFF!


Money Accomplishments this Month:

  • Still hustlin’! Those side hustle checks are EXTREMELY helpful – I’m so grateful for this job, and I’m just hoping the work doesn’t run out!
  • Stayed under budget overall (while still going over in certain categories).
  • Fifth month in a row that our net income is positive, not negative!

Money Setbacks this Month: 

  • We went over-budget in some areas, as mentioned above – especially in food. My dad was here for a couple of days and we paid for dinner and a few other grocery items.

Life (as in, Non-Monetary) Accomplishments this Month:

  • I found out I was accepted for that opportunity I mentioned last month. Super exciting!!!
  • We checked out a new ballet school for L for next year – it is pretty awesome. Additionally, we’re going to see Swan Lake tomorrow, which we’re really excited about! (Money for the tickets came out of our “gift” section of the Sinking Fund.)

What I’m Looking Forward to in June:

  • Setting up our June budget… because I enjoy doing that. The next few months will be very different, budget-wise, as I will only be “making” the money that I have automatically set aside out of my 10 paychecks for the year. So, our income will look different, but we also don’t have daycare to contend with…. I wish Mint.com would let you set up budgets months in advance.
  • We get out of school in two weeks!!! Yeah… that’s really about it.

I feel like the structure of these monthly posts is not the clearest. Trying to figure out a better way to set these up. Any suggestions? I’m looking forward to seeing anyone else’s monthly recaps! This is my favorite time of month!

– M.

Advertisements

Sallie Mae / Citibank Update

Brain Dump! I realized that if I tried to include all of this in a May Recap in a week or so, it’d be WAY too long, so I thought I’d go ahead and do an update!

Sallie Mae / Citibank Update:

One of the most frustrating things about monitoring our finances as closely as we do is that payments aren’t immediate. Credit card charges hang out in (what I call) the “gray area” – on Mint.com, the charges are in gray text, meaning they haven’t truly “gone through.”

It’s especially frustrating when we’ve been dealing with that private loan through Sallie Mae – read more about the decision we made to pay it off with a check from Citibank here.

Getting that done has been a huge chore. And not even for me, because it’s under my husband’s name so he has been on the phone with Sallie Mae several different times, trying to figure out why they can’t seem to follow simple directions. Honestly, I don’t want to get into it all here because I’ve been sick for the past week and thinking about those details makes my head hurt.

Suffice to say, Sallie Mae messed up and claimed we owed them more (BASTARDS) and then finally processed a separate debit card payment from us (because you can’t pay off the final amount with a credit card?!) and then the payment didn’t go through for a day and we were charged MORE INTEREST. So the amount from the debit card charge didn’t actually even cover the whole amount by the time it was “processed.” %)(#@$&%*#@)(!@()*#$)(@!!!!!

Anyway. We think it’s resolved now, but it did involve paying $200+ from our checking account that we weren’t expecting. It doesn’t actually change the total (we didn’t end up paying Sallie Mae more than we were supposed to), but paying from our checking account was unexpected – we thought it would all be a part of the new Citibank credit card balance.

More on the Citibank Card:

At the time we decided to pay off the Sallie Mae card with the check, we had a $500 balance remaining on the card. Recalling that it didn’t need to actually be paid off until the fall before it accrued interest, I thought about just leaving the balance on there. Then I thought, “What if Citibank tries to screw us over? Even if we pay $500 or more next month, they might try to claim that the original $500 accrued interest sometime in the next few months!” (Bear with me. I can’t explain that any better.) So, I pulled the $500 out of our Sinking Fund, trying to avoid potential future money headaches. (Remember, the Sinking Fund also acts as our Emergency Fund, though we always replenish it if we need to pull from it! And of course I don’t advocate for using it as an Emergency Fund. I’m just saying we do.)

So when we needed to pull that $200+ from our checking account, I realized we could end up being short this month. I can’t handle having a checking account with only $50 in it for 10 days until we get paid… what if something unexpected happens? So…. what did I do?

Asking My Mom for a Loan:

Yes, 30-somethings do this. I’m gonna guesstimate that 70% of 30-somethings do this. Based on science. And stuff.

I sat down and calculated how much our checking account would be short after that draft for Sallie Mae would go through, and I looked at how much we had in our Sinking Fund ($140). I transferred the $100 for a buffer and asked for $200 more from my mom, with the promise to repay it on payday (May 31). She is awesome, so she understood the problem (everyone hates Sallie Mae, did you know?), and she was super helpful and understanding.

On a side note, an interesting item to come out of that conversation:

Mom: “But once that’s gone, you’ll be done with Sallie Mae, right?”

Me: “Well, we still have our other Sallie Mae loans, but we’re just paying the minimum on those until this 8% interest one is paid off.”

Mom: “How much more do you owe Sallie Mae?”

Me: “Um, more than $60,000?”

Mom: “What? I had no idea!”

I guess I had no reason to think my mom knew all the ins and outs of our finances, but I thought surely she knew about those loans. In fairness, my part of that is only about $15,000 now, so I probably never told her how much H still owes.

Restructuring our Budget for Summer & Beyond:

I’ve started to consider how our budget will change over the summer, and then for next year.

We’ve crossed a big debt off our list – the original Citibank balance, which was all consumer debt.

We’re also thisclose to having the car loan paid off – I plan to use some of my side hustle check at the end of the month for that, then it will be DONE.

Those are big ones to celebrate! In my mind, that means we’re CONSUMER DEBT FREE (because mortgages are just so huge that I can’t even count that with the rest of it). And technically, our Sallie Mae debt is now “consumer debt” because it’s housed on the credit card, but I still feel better about it. We can pay it off more conveniently this way (though it involved some major annoyance over the past few days, which just makes me feel justified in moving it over to a credit card loan instead!). I don’t know what we’ll do when it’s done and it’s time to move on to the other Sallie Mae loans. (We ain’t payin’ those off with credit cards!)

So with a couple of debts out of the way and some lifestyle changes (L no longer in daycare but will be in after-school care; teaching L piano lessons myself to save money – eep!; different ballet school that costs slightly more), I need to determine how we’ll allocate our debt repayment over the next six months.

I actually enjoy that quite a bit, and once it’s done, I will share it here.

Anyone else have Sallie Mae horror stories to share? Come on, I know you do.

Sallie Mae vs. Citibank

So, my husband and I made a decision recently. It’s kind of a big one, and we’ll see how it shakes out.

Before I launch into the story, some info:

The car loan is down to $241.77. (This is the loan we’ve been hitting the hardest and snowflaking all of our extra money towards.) The Citibank loan will be down to $500 tomorrow, when the automatic payment goes through. (Although a lot of our Debt Eradication funds go to this account, it’s an automatic payment and it’s at a 0% interest rate until September, so we were focusing all extra payments on the car loan instead.)

We owe Sallie Mae a bunch of money, but most of it is at a “reasonable” interest rate. However, the last loan my husband took out for his final semester of graduate school sits at $6,274.44, with an interest rate of 8.375% (which is .25 lower than the original interest rate, as we went to automatic payments and that gave us the benefit of a slightly lowered interest rate). When I was telling my mom about how great it felt to only owe $274 on our car loan and be thisclose to paying it off, I told her we would then direct our attention to that crazy private student loan through Sallie Mae. She was shocked at the interest rate and told me I should use one of those “checks” that credit card companies send you. Those checks end up acting as balance transfers (subject to a balance transfer fee), but you can often get some kind of deal where you don’t pay interest for 12 months. If, of course, you don’t pay off the loan in 12 months, you get hit with a high interest rate.

Well, at first, I pooh-poohed the idea. Seriously, the transfer fee alone would probably be high. I did check into our credit union, but realized that they couldn’t give me an interest rate lower than 8% anyway.

But then we got those checks in the mail (fortuitous timing?) from our Citibank card account. 12 months, 5% transfer fee, no interest until August 2015. So we sat down and talked about it. 8+% interest on a $6K loan is a lot, for sure. But that didn’t end up being the reason we decided to pay off the loan with a Citibank check. In fact, I did some calculations based on how quickly we will be paying off the loan, and I actually think we will only end up saving about $80.

So why bother?

In the end, our decision was based on the following:

  • We won’t have to worry about what will happen when our loan is no longer in its “grace period.” Sallie Mae is a sneaky company and I know they will try to screw us over. Because they already do that.
  • Sallie Mae requires a paper check and a separate piece of paper sent with it every time you want to pay more than your minimum. That paper has to have directions for how the extra payment should be allocated. So, whenever we want to pay more than the minimum payment (which would be multiple times a month, judging by the way I snowflaked money to the car loan), we’d have to do that, and then wait for the payment to post. And double-check that it was done properly. This would be SO ANNOYING.
  • We will know where we stand with the loan at all times and not worry that a payment won’t be allocated correctly.

Those reasons alone made us write that check, wrap it up in a sheet of paper with explicit instructions, and send it off.

Our Citibank card had been doing beautifully – steadily decreasing by $500 each month. Not gonna lie – really not looking forward to how this change is going to look on our credit, or on Mint.com. However, we will still be in our credit limit on that card, and we pay off the other two every time we accrue a balance.

Additionally, I also made sure that we could still pay off the balance on the Citibank card by August 2015, even if I do not put any side hustle money or snowflake any money towards the credit card balance. Merely by continuing our $500 regular payment and then adding the $172 we’ve been spending on the car loan each month, we should be able to knock out the loan in 10 months. That even includes the 5% transfer fee.

If we DO add in my side hustle money (and it continues to be more than $1000), then that will get paid off more quickly. I still plan to divide my side hustle check into 80% Debt Eradication (the Citibank Card loan), 10% savings, and 10% IRA. (At least, that is the current plan.)

I don’t think this was a bad decision, but I’ve never done anything like this before, and I’m a little nervous….

– M.