Just a quick mid-month update. My last paycheck contained $290 from overtime, which went to the Roth IRA. This brings total contributions for the year to 1320/5500.
Trying to minimize spending for the rest of the month to stay on-budget, but I did need to get some groceries today. I know I’ve said this before, but ethnic groceries are AMAZING for value in the city. I stock up there about twice a month. Today I spent $31 and got:
8 kiwis (on sale!)
1 large cabbage ( 4.7 lbs)
8 oz mushrooms
3 small tomatoes (89 cents/lb)
2 sleeves of garlic bulbs
1 lb fresh ginger
2 bunches fresh cilantro
4 16 oz bags of rice noodles
1 16 oz package of regular noodles
4 10-oz cans of vegetables
2 small cans of water chestnuts
1 dozen eggs
1 bottle seasoned salt
I looked for chickpea flour to experiment with socca, but didn’t see any. Plans include lots of stirfry with egg for protein, grilled cheese with tomato, egg fried rice with veggies, cabbage with noodles, pesto pasta, spicy lentils with garlic, potato, and green peas, and delicious kiwi for snacks. Will need to pick up more yogurt and a few other odds and ends.
I watched The Big Short on Netflix, which was pretty interesting. It's about a few investors on Wall Street who caught on early to all the mortgage fraud that led to the 2007-2008 housing collapse and bet against the big firms like Goldman and Lehman Brothers. Based on a true story. I had kind of forgotten how ridiculous lending used to be- no money down, bad credit? Mortgage approved! It just goes to show you that if you don't think you can afford something, don't let anybody talk you into going against that instinct.
Viewing the 'Retirement' Category
Just a quick mid-month update. My last paycheck contained $290 from overtime, which went to the Roth IRA. This brings total contributions for the year to 1320/5500.
Last month in addition to regular debt and retirement payments (scheduled retirement is at 100/month), $83 extra went to debt and $380 went to retirement. The Roth IRA only has $930 for 2016, with a goal of hitting the 5500 max. I’m switching the focus from debt repayment for a while to beef this up. I figure that it’s important to take advantage of the time value of money by investing now while it has 30 years to compound. The fund also pays dividends quarterly, so investing early on will result in higher payouts from that. I’m in a relatively low tax bracket, so the Roth IRA is a good deal long term. My student loans are on income based repayment, so paying down the smaller high interest one instead won’t result in any freed up cashflow to put toward retirement. My job doesn’t offer any retirement match, and the company-offered plans are significantly less attractive fee-wise than a Vanguard IRA. Was hoping for a little dip with the Brexit hoopla so I could buy shares at a discount this month, but no such luck.
A small raise at work should be reflected in my next paycheck- will adjust the budget when I see the exact numbers, but last year it worked out to about $135 extra take home pay per month. I’m planning to put it toward retirement/debt repayment goals. I also nabbed a little overtime, but it usually takes a while to pay out.
Have some upcoming expenses for car maintenance, but it should be covered by the balance in the “recurring/long term expenses” category. (Contribute $150/month and roll it over.) I did call around for several estimates. Since I’m trying to make my older used car last at least a couple more years, this is expected.
Continuing to monitor my budget for any unused dollars and apply them to my goals. The student loan is at $6579.56 with an $83 extra payment pending. Don't know why, but five-thousand-something sounds so much more manageable!
I just sent $100 to the Roth IRA for June- if the market doesn't go down before it posts, this should finally hit $20,000 in retirement savings.
Comcast just raised my monthly internet bill from $50 to $80/month without saying anything to me- I'm going to call when their customer service office opens at 8 this morning. They're advertising a deal for new customers to get 12 months at $39.99/mo, so this feels like a rip off.
March was a mixed month financially, with some unusual one-time expenses (replacing broken items, etc) and a healthy tax refund.
After totaling things up, I have about $150 from surplus March income and $500 in a tax refund to allocate to my goals. The tax refund will go toward the student loan and the $150 will go toward retirement contributions.
Slow and steady wins the race, I guess. Except for buying some birthday gifts, I'll be trying to keep spending down in April to hopefully break the $7000 mark on the loan next month.
The student loan payment went through, bringing the new balance on the high interest loan to $7767.98. Looking back, when I started this blog in May the total was $13,671.78. I would have liked to see this closer to the $5000s, but the rational part of my brain knows that continuing Roth contributions instead of throwing every extra penny at debt repayment makes more sense in the long-term.
Filed federal and state taxes today. The amount of loan interest paid this year bumped up my refund, so hey, silver lining!
Other frugal things: Used a 10% off coupon code for the online tax prep website (which is only $13 to start with, including filing state and federal), drank free coffee this morning at work and ate breakfast and lunch at home (half-day). Yesterday I hit snooze too many times and didn't bring a lunch, but had a delicious spicy noodle bowl from the convenience store for $1.69 and tea from my teabag stash. The weather is beautiful today, so I have the windows open airing out the apartment and expect great improvement in the electricity bill! I'm also drying some laundry on the drying rack. Finally, I ordered a year's supply of contacts, which is more upfront but carries the lowest cost per lens. This was out-of-pocket because my vision plan only pays toward contacts OR glasses each year, and my current glasses need to be replaced. I tried to remember the last time and realized it was before freshman year of college! I almost never wear them, but feel like I should have an emergency pair that I'd feel safe driving with if necessary. Now that I have a current prescription, I'll need to shop around for the best deal on frames.
I'm still lurking around, trying to be frugal and sending little extra payments to the student loans and Roth IRA when there is a surplus in a budget category. So far I've contributed about $1000 to retirement and paid about $4500 extra on the highest interest loan this year. Currently floating a lot of money from the checking account buffer for some work expenses and a big joint wedding gift that a few of us went in on for a close friend. I know this will be reimbursed in the future (very reliable friends, and have done this for work before), but it sure makes my current balance lower than usual!
One area with potential for a lot of improvement is buying food and coffee at work, or on the way to work. I don't go "out" to eat at lunch often, but if I don’t plan and cook ahead I’ll pick up a frozen burrito or a microwave noodle bowl for lunch on the way in, which adds up to a lot of little purchases. Today I managed to eat breakfast at home, brought teabags to make tea at work for free, got a free sandwich at a catered lunch meeting, and resisted buying coffee there. For dinner I rescued the last 1/3 of a wilting green cabbage and some leftover noodles to make haluski.
I also picked up a small one-time side job with the potential to earn maybe $100 or so. Little extra boosts to the budget help me feel like I'm getting somewhere!
The budget totals for August are in and they're ugly. I blew way past my $350/month general spending cap at $588.83. This wiped out the "cushion" category and cut into the parking category as well. Unusual expenses this month included
About $45 in medical costs (visit and prescription copays, dressing supplies)
A friend came from out of state and stayed with me for a few days. I treated her to a couple meals out because she had to buy a train ticket down, which has worked pretty well for us in sharing the cost of visiting. Also got some snacky groceries to keep around the apartment while she was here that I don't usually buy. It's rare that we have any matching days off to visit, so this was totally worth it.
Another close friend got married in August, so that meant traveling out of state, extra gas costs, etc. I wore a dress I already had, so no extra spending there. Again, totally worth it.
Some long stressful days at work that ended with me buying dinner there after only bringing a lunch. This is an area for improvement.
I worked a few hours on a side job this month, but since payments are very slow from these projects, I just count them as snowflakes when they actually show up in my bank account.
Won't post the whole boring spreadsheet, but I have $140.88 to send to debt repayment after balancing the budget, in addition to the $50.50 already sent in from the utility and internet category earlier this month.
It's time to get back on track for September. Today I need to clean out my kitchen/fridge and make a menu plan to limit waste and eat from the pantry. Otherwise it was a low key day off- chores, lots of paperwork for my job (can do online), studying, writing a letter, taking a walk with a friend and catching up.
Meal options from a preliminary look at the pantry:
Halushki (a cabbage and noodle dish, delicious. I make it without onions from personal preference) Have a large head of cabbage that will make several meals
Stirfry with noodles
Vegetable fried rice (have some seasoning mix packets to use up)
Cereal with milk
Potato-lentil Indian curry
Frozen bean burritos
Samosas (use crescent roll dough and fill it with a mixture of spicy garlic mashed potato, peas, garlic, ginger, and Indian spices)
I also moved an extra $100 from the emergency fund to my Roth when I saw how low the market had dipped- love when the stock market goes on sale! As I've mentioned before, my EF is actually higher than it rationally should be, so it's a good thing when I bring myself to put some of that cash to work on investing or debt : )
Personal discretionary spending (food, toiletries, entertainment, household supplies, etc) was $266.61 before table, $ 396.60 with the furniture purchase. Above the budget of 350/month, but could have been worse considering my splurge.
Budget numbers for July
Budgeted- actual = difference
Rent 1175-1175 = 0
Parking 150-7.75 = 142.25
Utilities 100-35.23 = 64.77 (already paid to loan)
Insurance 64-54 = 10
Phone 112.88-66.34 = 46.54
Recurring expenses 150-0 = 150 (rolls forward)
Retirement 100-100= 0
Student loan 386-386= 0
Internet 80-22.73 = 57.27 (already paid to loan)
Food and misc 350-396.60 = -46.60 (from cushion)
Cushion 206- 46.60 = 159.40
That leaves extras in parking (142.25) + insurance (10) + phone 46.54 + cushion (159.40) = 358 surplus. 50 will go to the Roth IRA, 308 to the high interest loan. I'll post the new loan balance after the payments hit.
Today after getting my first quarterly water bill I confirmed with the landlord that yes, water here runs nearly thirty dollars a month! I pulled out my last two years of utility statements before I moved and I was paying around $8/month in an individually metered apartment. My new building just divides total water bill for the building by number of units, regardless of use or how many people live there, it seems. Oh well- to account for this, I'll be adding $32 per month anticipated water cost to each utility bill going forward, which will build up in the account until each payment comes due.
On a happier note, I finally received a reimbursement check for some work-related expenses totaling $370.99. Since I paid for this upfront a few months ago and haven't missed the money while reimbursement was taking a long time, I decided to use $65 of it to cover the first water bill (prorated from the move) and send $100 to retirement savings and $100 to debt. The remaining money will go back in the general savings/emergency fund.
Stopped at Trader Joe's on the way home from work today to pick up a few odds and ends- I've been craving pesto and ran out of milk for cereal in the morning, etc. I'm grateful that even with an unexpected utility expense, getting near the end of the month doesn't mean not being able to buy any more food until August comes around. Not everybody gets to spend $13 on groceries just because it's a convenient time to go, without thinking twice.
With a little bit of internet research, I was able to call my cell phone carrier and get them to drop my bill from $113 to $65/month plus tax. $40+/month savings for 20 minutes of my time. May end up dropping to an even lower plan when I have more time to do research, but it's a good start. After that, I googled advertised Comcast internet rates and called to ask why I was being charged so much more. They reduced my monthly bill from $80 to $50 and also credited back a $10 charge for a "home installation kit" I never received when I moved- I just used the old stuff from my last apartment and it worked fine. As part of moving I had to "pay ahead" several weeks, so the balance total for this month's billing cycle is $27.38. The new rate will show up next month.
June internet: 80 budgeted- 27.38 actual = 52.62 extra for student loans. Woo!
I'll leave the budgeted amounts for these services the same and just send the difference to debt repayment.
Otherwise the transfer from my old checking account and the leftover utility bill money for the month both hit the student loan account, plus the usual autopay:
1484.02- old checking account
42.77- leftover utility budget
Current principal balance: 10,563.31
After much internal debate, I did go ahead and transfer 100.00 to my Roth IRA for the month. This is a new line item in the budget. As much as I enjoy the immediate gratification of paying off debt, it will take years to pay off everything, and it doesn't make sense to miss out on after-tax retirement contributions at this age. (If you didn't read my earlier posts, that $10,500 account is just the tip of the student loan iceberg. Professional school ain't cheap.)
Currently on a decluttering kick - nothing like moving to make you look around and think, "Why do I have all this stuff?" Read an article a while ago about a popular organizer from Japan who tells people to look at every item in their home and ask, "Does this bring me joy?" If not, get rid of it. That seemed like good advice. I'm also selling some furniture I don't need anymore online. Nothing expensive, but I'll throw that at the loan if I find a buyer.
Other frugal minutia: Started using a drying rack for my laundry when possible, especially for towels. Really liking it so far. Found the birthday gift for a family member on Amazon, so I was able to use a gift card balance to cover it instead of cash. I would have gotten them the same thing either way, but this was a nice cashflow bonus. Just when my current work shoes became so worn they started rubbing my heels raw and had to be thrown out, I found an old pair in the back of the closet that have a few more months of use left in them. The theme for the last couple of weeks has been, "Use it up, wear it out, make it do or do without."
Longtime reader, first time blogger. I love reading these blogs for inspiration, and I am hoping that starting one will be a way to hold myself accountable as I get serious about my debt repayment goals.
The situation: Graduated debt-free from undergrad thanks to generous help from my parents. Took out loans for professional school totaling about $240,000 (with the in-state discount!) and graduated a couple years ago. After graduation I started a training job that will last for several years at relatively modest pay, followed by a significant jump after all training is complete. I was hired at a good salary (a little under $50K/yr), but had to move for my job to an expensive city with high cost of living, where rent ate up a huge portion of my income. I totally deferred one small loan from a private group with a very low interest rate (this is allowed for up to 5 years) and put my federal loans into income-based repayment, which has kept them in good standing but isn’t touching the principle. I recently found a much cheaper (for the area) apartment and moved to free up some extra money each month.
This is the only debt I’ve ever had and it needs to go! I feel like it limits my retirement savings and my general sense of freedom. With no dependents to take care of right now, I have a great opportunity to buckle down and set myself up for a more secure future.
I currently have a paid-for car with over 100,000 miles on it that is thankfully still running well and a good emergency fund (can cover 6 months of expenses plus a small extra cushion to reflect the fact that my car is well over 10 years old with a ton of miles and you never know). I have a Roth IRA that I started with my very first summer job at age 15 but have not been funding it consistently since college, which also has to change! My employer does not offer any type of match for retirement savings and the investment vehicles they do offer for automatic withholdings for are significantly less attractive than a Roth IRA due to the management fees. They do offer health, dental, and vision benefits for a reasonable rate.
The ugly numbers:
Accrued interest: 13,266.37
Interest rate: 6.55%
Current monthly payments on IBR: 368.32
GradPlus: Total 13,671.78
Accrued interest: 1,086.20
Interest rate 7.65%
Current monthly payments on IBR: 17.14/month
Other private loan: 17,000 principle, deferred, lower interest rate (don’t recall offhand)
Roth IRA: 14,322
All payments are applied first to interest, then to principle, so my IBR payments are not making any headway on actually getting out of the hole. I also think the interest rates are a little shocking- this much educational debt is essentially a mortgage, and 7.5% seems a little harsh, Uncle Sam! Talking to older colleagues, many of them mentioned that their loan rates a couple decades ago were more like 2-3%. Feeling like you are being gouged is certainly more motivation to pay if off quickly, I guess.
My first goal is to make extra payments to the GradPlus loan, both because the rate is higher and because it is small enough I could realistically start seeing some progress in paying off the principle to keep me motivated. I also plan to start contributing to my Roth IRA again- it’s ridiculous not to when you consider the time value of money at my age (under 30).
I'm still tweaking my new budget and will probably post that at a later date.