Welcome to the July 2016 Snowflaking Report!
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 July 2016 Snowflaking Strategy:
As you may remember, we made a huge payment to H’s Navient loans, and we transferred the balance 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).
So: we have two remaining chunks of debt to pay off these days.
One is those Navient loans, and the other is the Citibank card, where we transferred H’s loans.
Our original goal was to pay off my Navient loans while the balance sat on the Citibank card, and then snowball the Navient payments to Citibank after those got paid off. However, we have reassessed and H especially feels more comfortable if the “what-looks-like-consumer-debt-but-used-to-be-student-loans” gets paid off first.
I personally waffle back and forth on this, because part of the appeal of turning those Navient loans into credit card debt was to then pay down the interest-accruing debt we have elsewhere. On the other hand, the minimum payment on my loans is so low that if we did get into trouble somehow, we could much more easily pay a $114.01 minimum payment than scramble to get the Citibank paid off before it “comes due.”
We all have to weigh the pros and cons and our own comfort level with debt vs. cash and other financial situations, and I can certainly accommodate H in this instance. I mean, look at how our debt and cash ratio lines up right now (I use Mint.com). (Note: This debt does include our regular credit card debt as well, which is paid off each month since we use CCs to rack up points for planned travel.)
H & I are certainly agreed that for now we are also dividing our “snowflaking” money into two piles – one for actually snowflaking towards debt, and the other for saving.
Why save more? Mostly because we’re going to stay on the lookout for a home and if we have a bit more in the bank for closing costs, etc., we’ll be better off. We’re actively looking, but we don’t feel pressured to move. After looking around some in the area and keeping our eyes peeled, we’ve learned that the market here is a tough one – to find the kind of house we can afford in an area we’d like to live in, we will have to be ready to jump on one as soon as it becomes available. This is something we’re willing to do, as long as we’re financially prepared.
If this does occur, though, it is true that our goals to pay off the debt by the end of February 2016 will not be realized. I’ve pretty much come to the decision that I can let that goal go if we are able to get into a reasonably-nice house (not asking for the moon, here, people) that’s in a great location.
Alternately, if we get to February and are thisclose to having our debt paid off and we just need a bit more, then we very likely could take that saved-up money and pay off the rest of our debt.
Indeed, knowing that our snowflaking money will be split up for a while is kind of inspiring me to look for more and more ways to make money (and I’ve been swagging* more than ever these days!).
* If you have the ability to use Swagbucks, I highly recommend it! I’m now working to make $5 a day, 5 days a week – yes, not much, but a big help if it means over $100 a month or more in extra cash that can go directly do debt/savings!
July 2016 Minimum Payment
Mintly Navient Loans
- $114.01 – minimum payment we sent
- $91.80 (81%) – amount that went to principal (last month: 93%)
- $22.21 (19%) – amount that went to interest (last month: 7%)
- $9,315.21 – balance (last month: $9,418.18)
Citibank Card (no-interest until August 2017)
- $128 – minimum payment we sent
July 2016 Snowflaking to Citibank:
- $403.82 – amount we sent to Citibank
- $8,018.17 – balance (last month: $8,549.99)
Current total debt: $17,333.38 (last month: $17,957.80)
- Citibank (H’s loans): $8,018.17
- Navient (my loans): $9,315.21
July 2016 Snowflaking Breakdown: $403.82 (with $400 set aside for savings)
- $150 – Swagbucks (<– referral link)
- $25.86 – Pact (via Paypal)
- $10 – from Mom
- $17 – consigning books
- $26.10 – consigning clothes/toys
- $27 – H’s side hustle
- $322 – budgeted for debt eradication
I’m realizing that it isn’t motivation that is lacking in our household. We all want that debt gone! Even our daughter understands that we are working on paying down those student loans and they are a priority to us. However, our problem is that we often feel defeated.
It’s easy for us to feel sorry for ourselves: it will still be a while before that debt is really gone, and then when it is, it will take a while to build up the kind of savings we want to buy a house or to save for retirement, etc. At some point, we will need to replace one of our vehicles and if we don’t have the money saved up, we’ll need a loan. My goal is to truly never have consumer debt again (except for a mortgage).
And to clarify our desires for homeownership – we are not looking at a house as an investment, at least not monetarily. We’re looking at buying a house where we will be able to live for a really, really long time. We may even stay in the house through retirement, and through the time that my parents may need to move in with us in their later years. We want a house where our daughter can grow up happily playing outside (safely) and we can put up our own artwork on the walls and make a house feel like our home. I’m willing to pay quite a bit for that luxury – it doesn’t have to be beautiful (we can do some – limited – work on it) but it does have to be ours.
It’s a different world than the one my parents grew up in. They were working for a public university (so were state employees with great benefits that don’t exist for us where we live, though we are also state employees), and bought a house for $80,000 (one that we would honestly be super happy with if it were in our area because it ticks all the boxes we need!). That house, incidentally, is probably going to sell for $150,000 where they live, and would cost about $275,000 or more where we live. (Ridiculous.)
But. But. I know how fortunate we are. We are nearly to our debt-free goal. We have a wonderful, happy, healthy family, and we are both gainfully employed and live in a beautiful area. There is so much to be thankful for. So, every day, I log into Mint and look at our decrease in debt over the last few years, and that’s what helps me feel a bit better about being 36 and still owing student loans!
Well, that turned out to be long-winded. I know that very few folks ready this blog (hi, there!), but it’s really been a huge help to me to keep me honest and help me focus on goals and reflect on our progress and strategies. So, if you are reading, I just want to say, “Thanks!”