This is a post I’ve been contemplating writing for the past two or so weeks, but for some reason, couldn’t bring myself to hit the “publish” button. I’m not sure why. I have just felt out of sorts when it comes to my financial situation because I still haven’t been able to look at a full month’s worth of expenses and salary, to see how it’s really setting itself up. Maybe that’s why. I’m pretty sure it is the reason, actually. Read more
I came to a few realizations last night and I went to bed angry. Fighting mad angry. But in a good way. I owe a lot of this to my friend Dan, who answered a text message of mine that said “Do you think I’m stupid for wanting to leave a good paying job to do something that will pay so much less?”
The reason I asked this question is because I see so many people struggling just to get by and I feel like I should just be thankful for whatever opportunity is thrown my way. For example, there are the cleaners/housekeeping folks at my gym – all three of them work two jobs. None of them have English as their native language, which definitely hurts their job prospects. I know for a fact that one of them works seven days a week, and that a second one was until he finally had his daughter talk to me to write a note to the manager stating that he would like to take Fridays off since he was working seven days a week. (He and I are slowly teaching each other some words in Spanish and English.)
In response to these concerns, my friend Dan told me, among other things, “you can still be thankful and desire to live a Purpose Driven Life.” He also said something that struck home: “No one says on their death bed, ‘Thank God I paid off that student loan.'” Finally, “It (my student loan debt) runs your life in that it makes your decisions for you.”
So now, I’m going to do what he suggested: “Find a balance between the obligation you owe the debt and the bigger obligation you owe yourself.”
I looked at my loan details last night for my Big Daddy loan. I started paying (or shall we say, deferring and forbearing) back in 1997. Now that I have been paying interest-only payments on it for the last two years (as part of a graduated repayment plan), just to keep it from growing, I see that the final repayment date is in 2034 and another in 2035 (Big Daddy consists of two consolidated loans – one is unsubsidized federal money and the other is subsidized.)
In case you’re wondering what the difference is between a subsidized loan and an unsubsidized one–well, the difference is when who pays the interest that is accruing during terms when you are not in repayment, such as when you have taken a deferment. Deferments can be for a number of reasons but the most common ones are that you are currently in school or you are going through some sort of economic hardship. With a subsidized loan, the federal government pays the interest coming due. With unsubsidized ones, that interest just keeps on accruing and accruing and accruing and at the end of your deferment or forbearment period, all that unpaid interest gets thrown on the top of the loan, essentially making your principal balance, upon which more interest accrues, even larger than when you started. Do you see why this can get overwhelming to think about? I had loans that were unsubsidized during my first year of law school. You’re encouraged to not work during your first year of law school for a lot of reasons. So even by the time I graduated my principal balances had already grown by a whopping lot.
My Big Daddy loan actually consists of two loans – out of $75K, one has a principal balance right now of $44K. So that puts the other one around $31K. Here’s the funny thing – that loan that now has $44K to its name – when I consolidated that loan back in 2001, guess what the principal balance was at that time? Yeah….it was about $41K. All these years, I have paid at the very least $538/month, and for many years, while I was married, I even paid extra principal to it every month. Sometimes, about $700/month, on the combined Big Daddy loan. So, how, you ask, is that balance even higher? If you take an average of $6000 paid every year and you multiply that by 13, how much do you get?? Hmmm. 78K. And yet the balance of Big Daddy these days is still over $75K.
So here’s what I decided the other night – I’m going to switch careers to something that I find much more fulfilling, and if I pay less money per month to my student loans, so be it. I want to have a life where I feel like what I am doing every day is more in tune with my heart. And for me, that means working with animals.
Beginning this week, I am going to begin volunteering with the Animal Rescue League of Boston and work with their livestock animals. Right now, that means goats, sheep, a horse, and some chickens. I heard back from my local vet who asked me to send a resume or CV and let them know the hours during which I could volunteer, so I would be able to get experience working in a private vet office with small animals. I want to try to expose myself to as many different types of animals and types of organizations so I can see what best fits with me and my personality, etc.
I already know the average salary for vet assistants is something like $22K-30K. This is about what I live on right now, but I currently pay extra money to my student loans and paying the higher amounts on my loans. With a lower salary, I will be eligible for different types of repayment plans, and one can lower your payments to about 10-15% of your salary. So yes, it moves the final payoff date out that much further into the future, but life is short.
Don’t get me wrong. I’m not a slacker. i do want to pay back my debts. I do. I just think that with all the money I have paid this government over the years, the government can continue to wait for the 2x and 3X the principal amounts I will end up paying back. I could walk outside today or tomorrow and get hit by a car or something worse. I could be like Brittany Maynard who was 29 and found out she had an aggressive form of brain cancer. I’m not trying to be melodramatic or anything. I just have decided to not let these loans run my life anymore. I’m going to start living my life for me. And for the animals.
So this is the new plan. I’m going to pay off the private student loan which is sitting around $13,500 right now. That one, I don’t have tons of options about. But the federal ones…I’ll deal with them, probably for the rest of my life, but at least it’ll be a life that I feel good about at the end of every day. I’m thankful for the opportunities I’ve been given in this world, and every time I go to a talk at my school about animal rights, I get this strong feeling in my stomach that I NEED to do something to help them. And with my background, I can. I want to work with the animals in a hands-on way, but if there’s a way I can also be involved in using my education or my social or personal skills to their advantage, well, I plan on doing it. I’m open to the opportunities.
I’m home with my mom this weekend to celebrate an early Thanksgiving. I hope you will all have a great weekend. If you’ve liked this post, please hit like or subscribe, or drop me a line below.
I think the last time I actually counted these posts in the title, I was at 16. So now, let’s just start with twenty. That sounds good.
You’re probably wondering what it’s down to now – of course “down to” is all relative. But now that I think about it, it’s been about a year since I really started keeping track of my total debt. Just thinking of it as an amorphously large number doesn’t really motivate you to kill it in the same way as staring the numbers in the face.
I seriously have lost count. I know I have not been talking about the Debt Killing much lately and that’s because it has slowed down,while my savings has really ramped up. Now that I know I definitely want to move to WA state by September of next year (and possibly as early as August if I get accepted to the Outdoor School I mentioned in my last post), I have figured out how much I need to save to feel comfortable when making the move. I want to have at least 4-6 months living expenses saved up, a scooter (which I estimate will cost me about 2K), and have planned on saving up about $3K for the move. I figure the motor home will cost me probably about $1200 for gas alone, and I’m thinking right now my budget for the motor home purchase will probably be around 10K. I’m not expecting to get the latest model but want something dependable, and I don’t mind putting in some sweat equity to make it my “home” Ii.e. my goal is to make it feel “beachy” by probably painting the walls, and possibly the cabinets depending on what color they are to start with.) Read more
I listen to Dave Ramsey’s radio show a lot and he usually has several people during each show do what they call their “Debt Free Scream!” Sometimes the people travel to Nashville to be able to talk to him and do it in person, and sometimes the people do it via phone. He always talks to them about what was their household income while paying it down, how much was their income, etc. He also always asks the people “what was the hardest thing you had to do during this process?” He also asks them “which bill was it that when you paid off, it felt the best?”
“What was the hardest thing you had to do during this process?” Usually, the people say one of a few common answers – saying no to going out with friends because the amount had not been figured into The Budget. Sometimes they answer that the hardest thing was to just keep going when it felt like the debt fight was never going to end. Now, I don’t do a ton so the first answer isn’t that hard for me. And when my friends and I do get together, well, none of us are made of money so we try to keep cost down. So, it’s not a problem. But I do understand (completely and more than I would like to) that feeling that the debt fight might never end.
So, this is how I have learned to combat those feelings or at least quiet them momentarily. I look back to my situation a few years ago and compare it to today.
1. About three years ago, I had roughly $8,000 in credit card debt. Today, that number is ZERO.
2. About two years ago, I bought a brand new car. With the added warranties and gap insurance, that put me roughly another $20,000 in the hole. Today, that number is ZERO.
3. About last September, my private student loan was almost 21,000. About two or three years ago, it was around $23K. Today, it’s $16,171.82. (My account info on line only goes back about a year so I’m guestimating on this.)
4. About three and a half years ago, I sat at home over the week between Christmas and New Year’s. I remember that my credit cards were maxed, my checking account had oh, about $20-30 in it, and my grand total of savings was probably about $500. I remember thinking “this has to be the lowest I can go.” Today, I have more than I had in savings (at our highest point) when married. And that took us a long time to get to our milestone amount as well.
When I add it all up, I figure that I have probably gotten rid of about $32K in debt over the past few years when I add in the brand new car I had taken on and since sold. I used to have a negative net worth. Today, that number is solidly in the positive zone. It’s not a huge number, but it’s something. I’m worth more alive than dead!!!! When I look at the figures like that, I feel better.
Two years ago, I didn’t feel completely fulfilled in my current job but I also didn’t know what I could do instead. Since then, I’ve gotten certified as a personal trainer, and taken and passed a few specialization tests, and am solidly working toward getting a second certification. And the best part? I owe nothing for having taken those exams. They’re all paid off. A few years ago, I would only have known to bankroll those by using credit cards.
A few years ago, I talked the good talk – about wanting to get out of debt, but still solidly digging myself in more and more month after month. Now, I actually walk the walk. The credit cards (other than the CareCredit one I have for pet health emergencies) are gone. And, the Care Credit is only used until money can be transferred from my online savings account into my checking to pay it off.
It’s funny how things work out. When I had figured out my bills and savings amounts a few months ago, I knew the only way I could cut expenses any further was to cut my housing costs. And then, I got a roomie, and even though it’s temporary, it’s taught me a few things. One, it’s been nice to have someone else around some times. She’s decided she’s set on getting her GED, so when I see her studying, it makes me want to be a good role model for her. So, even if I don’t necessarily feel like it, I’ll get out the laptop and start studying or trying to do some freelance work. (And if that fails, yes, I can watch an episode of something, but she knows I’ve worked hard all day, so I’ve still set a good example.) And, while my food costs have gone up with her being there, I will still be able to save a bit more per month than I could before with the additional rent income. So, while it’s been a bit of a transition to get used to having another person in the apartment, it’s not been as big of a change as I expected. We get along pretty well, and we’re both vegetarians, wanting to better our lives. We respect each other’s space and different habits, plus both of us have been sleeping like rocks lately, which is great, since I’m a morning person and she’s a night owl.
Some days/nights, you just feel like things have come together the way they are supposed to. When I saw my little dog Osito basically running because she was so happy to be outside in the crisp air, I just knew last night was one of those times. You don’t question when things are going well, I have learned. Just accept it and go with it!
And that’s what I’m going to do.
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Have I mentioned in the past that sometimes I am decision impaired? Well, if not, lol, I am. It can be on something so simple as travel arrangements (will a cheaper flight come around right after I reserve my seats? Is this the right thing to spend my money on? etc., etc.) I’m getting better, though.
The other day, I sat down and figured out that based on my LAL loan balance, which is now, (Drum Roll, Please . . .) $16,721.40, that if I wanted to have it paid off by June 2015, it would cost me roughly $1,306 per month. I’d been planning on paying $720 on it each month so that’s a big difference in funds. So, this is what I have done to make up for the shortfall.
I’ve decreased $ going into my savings accounts from a total of $480/paycheck to $230. There’s a $250 difference per paycheck. Yes, this means that the amount going into my tiny house/land fund each month from my full-time job goes from $400 to $100. But here’s the good news…I just picked up an additional regular shift at the gym, every week. It will bring in about $140ish more to the tiny home/land fund as that is where all the money I earn from that job goes. (That amount is what I estimate after taxes are taken out.) I literally never see it in my regular checking account. This helps me in a couple ways. (1) I don’t even get the opportunity to spend it elsewhere. (2) If I ever feel tired, I just remind myself where that money is going — i.e. to my future tiny home, or more likely, motorhome, and that’s all the motivation I need to get moving.
I know others may not agree with me on this, but I cut my contributions to my TDA (tax deferred account – in the academic world, it’s known as a 403(b) rather than 401(k)), in half. I was putting $200 in per paycheck and I’ve cut that amount to $100.
I think these two reductions come up to about the $600 dollar difference I needed (I had previously budgeted to pay a total of $720/month on the LAL loan.) So, if all goes well, I will now be paying $1320 on my LAL loan every month in addition to $558 to my federal loans (and yes, folks, that $558 figure is ALL INTEREST.)
While I know this means the tiny house/motorhome fund grows at a slower pace, there is still some freelance work to be done this summer. I don’t know the exact amount yet (still waiting on another chapter), but I know it’s out there. And it’s gonna be FUN! (I say that in all seriousness, because yes, I am a giant dork. That and I already know the topic of the chapter…)
Also, I will have another three paycheck month this year – I believe it falls in November. That will be another month where I put a ton onto the loan balance, if needed. OR, it goes to the tiny home/motorhome fund!
I have begun tracking my expenses with a free version of the app called DollarBird. (I have an iphone 4S, but it looks like it is also available on Android phones.) I’ve done the tracking deal in the past but not with so much concentration. And yes, this month has already included some “fun” expenses such as my friend’s 30th birthday celebration. So I’m trying to get a realistic sense of my $ and where it’s going, even more than I already do.
I’m going with Dave Ramsey’s advice as best as I can – writing down before the month starts, how much from my paycheck goes to allotted categories. His saying is “Every dollar has a name.” Trying to account for every $ but sometimes it’s hard to estimate things like “how much will I spend that day out with my friend?”
Here’s what I can do though – schedule those extra principal payments to my LAL loan at the beginning of the month. I’ve already scheduled a payment for May 16th, for $400. It feels good to know it’s taken care of before the funds even arrive. That extra principal payment is just like another bill to me. I don’t question it’s going to be paid.
What do you do to try to get yourself out of debt?
Tangent Alert: I am LOVING training for a marathon again. Granted, I’m in the beginning stages so my mileage is not too high – 20.75 miles total last week and only 16 scheduled for this week, but I started doing some fartlek/speed work yesterday and felt strong and confident. Just keeping the faith that my body can hold out and the exercises I’ve been taught for my back and SI Joint keep working. Plus, there’s always ice packs! 🙂
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Of course this post had to begin with a cute pet photo! I’ve never seen these two be so close to each other!
Been a little bit since I’ve been able to give an update, but I promise this one has been worth waiting for!!
May is the month I’ve been waiting for all year!! Yeah, baby….it’s the first 3 paycheck month of the year! And I have a plan for those extra dollars – they are going to go straight to my private student loan.
Here’s how the debt is looking as of now:
LAL Loan: $17,401.24
Simmons Loan: $23,620.04
Big Daddy (federal) loan: $75,390.94
Total balance: $116.412.22
My last payment on the LAL loan was made on April 16th, for 167.11. That’s my regular monthly payment now. Of that, $151.56 went to principal with just $15.55 going to interest. Before that, I had made a payment of $433 of which $410.31 went to principal and $22.69 went to interest. I remember the days when that loan was nearing 8% and when most of my payment went to interest rather than the other way around.
So what’s my plan? Well, here it is:
Paycheck of 5/2/14: $1133 EXTRA to LAL loan (this includes the usual $433 extra that I pay on the loan, plus $700)
Paycheck of 5/16/14: $130 EXTRA to LAL loan, plus the usual regular payment of $167.11, for a total payment of 297.11 – ok, now that I look at it, I need to make it an even $300, or that’s gonna drive me crazy!
Paycheck of 5/30/14: Let’s say an EXTRA $100 to the student loan.
I want to try to pay more at the end of May, but I know with that paycheck, I’ll be attending a conference in Providence for four days that is held by Perform Better. I need to leave myself money and time to take either the commuter rail or a rental car. It’s looking possible to do, however, with the commuter rail, which will save me a TON of $ over taking a rental car there. It’ll be some long days but that’s ok. It’ll be worth it.
So, that comes to a grand total of $1533 to be paid on the loan this upcoming month of May. WOW. I sure hope I can turn that into a reality. That would definitely bring my loan down into the $15K range – woohoo! Not bad considering it was almost $21K back in September, and in the meantime, I’ve really increased my savings and also paid off a personal loan of about $4200. (See the numbers below.)
Personal loan: $4,211.42
LAL loan: $20,939.94
Simmons Loan: $23,620.04
Big Daddy (federal) loan: $75,390.94
TOTAL BALANCE: $124,162.34
Just think – it might be more than $10,000 of debt I’ll have paid off in about 9 months if I can do this!! And saved more than I have ever saved before. The work is paying off. I’m proud to say that as of now, I have more saved than I ever had saved before, even when I was married. 🙂 [Of course, some of it is being saved for next year’s taxes for my freelance work, but hey, let me revel in this goal, ok?!)
Wow. I just reread this post and thought about it. I have spent more in the past month than normal, due to my friend being in town for the marathon, and having bought some new sneakers (the beautiful Hoka One Ones Bondi model), plus I have bought some sports nutrition products through a company called Vega. The products are all plant-based, so I’ll let you know how they work out. Just part of the marathon training program.
I’ll give everyone an update once these payments hit the loan account and I can see how much goes to principal vs. interest, etc.
DIE, LAL Loan, DIE!!! (Picture me saying this while brandishing a sledgehammer!!)
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Yesterday, I had a few good talks with people whose opinion I trust. One is a friend who has known me for about 10 years now, and she’s always been one to tell me straight on things. She doesn’t sugar coat things, and that’s one thing I really like about her. I asked her if I was thinking about things in the wrong order – looking online at RVs and tiny houses, trying to figure out where to live, etc., without finding a job in those locations first. She thinks I’m narrowing my options down too early and also, most importantly, that she didn’t want me to give up on my dreams of a tiny house, or as she put it “half ass my goals.” And I respect her for that. She fears that RVs just are not meant for longevity, living-wise.
Then I talked to my financial adviser tonight. I really looked forward to this meeting – what a change from a few years ago when I used to be depressed at my situation.
My guys above are invaluable in helping me to keep my spirits up. It always amazes me how they can find such amusement in something so simple as a box. 🙂 “Oh boy, it’s a box!”
I mentioned last week that I would talk about how I keep from letting myself feel down about my debt. I try to not think about it in overall, total sums, but rather what I can work on at the moment. This does not mean I am in denial, by any means, but as my grandmother used to say when I would stress out about my debt or other matters, that I shouldn’t make a mountain out of a molehill. Or, I guess in this case, not turn a 20,000 foot tall molehill into Mt. Everest. As weather such as wind and rain gradually wear away at such massive structures as mountains or the Grand Canyon, so will I do so with making extra payments over time. (I just thought of that analogy, what do you think of it?) Read more
Been a few weeks and I haven’t reported in on my progress. Well, not much has changed since the past two weeks, but that is about to change this week. I should have been able to pay my extra $430 to my private loans, as usual out of my regular paycheck, but this month that didn’t work out. I am now taking an e-course called Dreaming of Mortgage-Freedom that is run by Hari of the Tiny House Family blog and one of our first assignments is to start tracking our spending. (To get to where you’re going, you need to know where you are right now.) She suggested an app and I know others who do the same thing. (By the way, she was on the Today Show this morning! But for me, sometimes, it’s literally the writing down of everything with pen and paper that helps me to see things clearly. And here’s what happened this month: Read more