Welcome to the June 2016 Snowflaking Report! (Sorry it’s a bit late!)
As a reminder, I’m doing this once a month for the following reasons:
- We pay our minimum payment automatically around the 13th of every month, and I send our extra payment as soon as the payment posts to improve the likelihood that our Snowflaking payment will go entirely to the principal and not to interest.
- My monthly recaps are kind of long, so I’d like to take out some of the details to streamline them.
- Snowflaking will make or break the achievement of our 2016 Mintly Goal(s)!
What is Snowflaking?
“Snowflaking” can be defined as putting all of your extra income (often in small amounts) to your debt. For instance, if you do an odd job or have a side hustle, that money would go to your debt. If your mom sends you money for your birthday, you can send that money to your debt. If you get a refund on an item, that money can go to your debt. For more, see this.
Mintly Snowflaking 2016 Mid-Year Report:
Things are changing! We made a huge payment to H’s Navient loans, and you’ll see that reflected in our new balances. I would love to say that “all of H’s loans are paid off!” but the truth is, even though his Navient loans are gone – WIPED OUT, WOOHOO! – we still have the balance we transferred to a 0% interest credit card. Of course, we also still have my two loans at Navient (which have always been at the low interest rate of 2.88%, so they have never been our primary focus).
In case you’re just joining us, the money to pay off H’s loans at Navient came from our “Oh $hit Fund” (I wish I had called it that from the beginning, it makes it a lot more fun). For a few months, we stopped paying extra on our student loans in order to build it up so that if H’s job situation turned out badly, we’d be able to keep ourselves afloat for a while. Then I just got really happy having that much money sitting in the bank. But after a while, it really did seem like the right decision to use it to pay down the loans (keeping back about $5000 for an emergency fund / house downpayment fund / whatever we need it for fund).
We also used other money, as well. The additional funds came from our House Downpayment fund. This money was set aside after we sold our first house so that we would have a bit of a head start on a downpayment the next time around. However, we decided that in order to meet our 2016 Mintly Goals, we needed to eradicate debt as quickly as possible.
There’s a balance between money in the bank and debt eradication, and for each person it’s a bit different. Plus, I can testify to the fact that the balance can change pretty quickly!
June 2016 Minimum Payment
Well, this is all completely off this month, because we paid off H’s Navient balance at the beginning of June. This year I was only tracking H’s loans in these Snowflaking Reports because those were the ones we were paying down aggressively. Now it’s different – we’ve got my loans as well as the credit card loan.
My Navient Loans:
- $114.01 – minimum payment we sent
- $106.53 (93%) – amount that went to principal (last month: 73%)
- $7.48 (7%) – amount that went to interest (last month: 27%)
Citibank Card (H’s last loan): There is no interest on this card. The original plan was to send a scheduled monthly payment of $450 each month and snowflake the rest to my loans. However, we have decided that it’s better (after all) to prioritize the credit card loan debt moving forward – our main reason is that if something terrible happens and we can’t pay down the credit card, we could be in big trouble. However, if we pay off the credit card and something bad happens, we only have to send $114 a month to my student loans. I don’t love that we’re not capitalizing on the fact that we can eliminate interest-generating debt, but I don’t like being without a safety net either.
- $450 – scheduled monthly payment we sent
June 2016 Extra Payments (including snowflaking):
- $8,874.46 – total amount we sent to pay off H’s Navient loans (that’s all that was left on his to pay!)
- $3,602.77 – total amount we sent to pay down my Navient loans (which included $1500 which was budgeted)
Current total student loan debt: $17,95780 (last month: $30,683.99)
- Citibank (H’s loans): $8,549.99
- Navient (my loans): $9,407.81
May 2016 Snowflaking Breakdown:
- $1500 (budgeted)
- $175 – Swagbucks (<– referral link)
- $75 – American Express Rewards Dollars
- $389.90 – H’s work reimbursement (finally, woohoo!)
- $100 – H’s work reimbursement
- $141.52 – Mary Kay order
- $391 – this is the amount that would have automatically gone to pay for H’s loans at Navient but we had paid them off by the time
- $150 my side hustle (few and far between, but still good!)
We found out that H should be getting his work award ($1000, before taxes) in his end-of-June paycheck, so that will be nice! Unfortunately, after talking, we decided he should go ahead and spend it on a work-related expense (which can be written off, of course). It’s disappointing, but at least we’ll get some Chase Ultimate Rewards points, and it really is his money. I also believe that we would have had to purchase this same item later on anyway, and then it would have really hurt our wallets!
As I mentioned above, I’m not super excited about putting all of our efforts into paying down the Citi card, but I think it makes the most sense overall. I’m thinking I may still use budgeted funds for the credit card but then send some little snowflakes over to my Navient loans. I’m not sure that dividing and conquering will give us the biggest emotional pay-off, and at this stage of the game, I feel like that’s a bit more meaningful than the absolute best financial route. We’ll see what happens in July!