September 2016 Snowflaking

Happy September! Here we go!

Navient Minimum Payment & Additional Payment

Mintly Navient Loans

  • $81.13 – minimum payment we sent
    • 73% – amount that went to principal (last month: 72%)
    • 27% – amount that went to interest (last month: 28%)
  • $35 – extra sent to Navient (this is a budgeted amount we send to keep our payment to Navient the same as it was before they lowered my minimum payment)
    • 98% – amount that went to principal*
    • 2% – amount that went to interest
  • $9,127.45 – balance (last month: $9,231.26)

*So, funny story – apparently the minimum payment that Navient is now asking me to pay ($81.13) doesn’t actually cover the entire interest that is due, so even when I make my additional payment of $35, there’s still interest to pay! The other option is that somehow the payment isn’t going through quickly enough and interest has already accrued since the minimum payment. However, in August when I did this same process, I paid additional payment the SAME DAY and was still charged interest (which, honestly, I did not note because it was so weird… but now it’s a thing, apparently).

Citibank Card (no-interest until August 2017)

  • $1,157.75 – payment we sent
  • $5,377.62 – balance (last month: $6,634.37)

Snowflaking/Savings Breakdown: $2,022.68 (half sent to debt, half put into savings)

  • $56 – Swagbucks (<– referral link)
  • $44.41 – money that I was supposed to send to the dentist bill from our sinking fund but I never transferred the money to our checking account… and so it gets to be put into our savings/debt eradication!
  • $50 – American Express Dollars
  • $2,022.68 – money from our paychecks that was budgeted for savings/debt eradication
  • $69 – H’s side hustle
  • $13.30 – Pact app

Current total debt: $14,505.08 (last month: $15,865.63)

  • Citibank (H’s loans): $5,377.62
  • Navient (my loans): $9,127.45

Reflection:

I feel like there are a hella lotta goals in my life (well, my husband’s, daughter’s, and my lives, that is) and I’m getting overwhelmed with trying to achieve all of the goals. How strong is a goal of buying a house this year? How strong is our goal to pay off our debt as soon as possible? Some goals HAVE to take precedence or it takes forever to achieve them (witness our slowly growing savings fund and our slowly diminishing debt). I know we could do one or the other a lot more quickly if we could focus everything on one goal, but it’s difficult when you don’t know when the right house might come on the market. We are definitely in a period of transition, and at some point, either a house will show up and be THE ONE or we will get our debt paid off and also have a good sizable chunk of cash for aiding in a house purchase. It’s just hard to see things moving so slooooowly now. If I recognize that period of transition though, maybe I can be a turtle, if it means we win the race!

 

July 2016 Snowflaking Report

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.”

2016-07-15_09-45-28.png

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

Reflection:

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!”

Thanks.

June 2016 Snowflaking Report

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:

  1. 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.
  2. My monthly recaps are kind of long, so I’d like to take out some of the details to streamline them.
  3. 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!)

Reflection:

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!