Tag Archives: debt

How I Saved $70 a Month on My Cell Phone Bill (And You Can Too)!

rwOne day this past Fall I woke and realized at age 26 I needed to get my life together financially if I wanted to pursue both my passion of travel and also return back to graduate school for my PhD studies. I’ve never been bad with budgeting and finance, but I’ve never been extremely good either. Back in October I sat down and created my Mint account to establish my first real budget that I was going to stick to while I worked to reduce my debt and increase my assets.

One of the first things I did was to scrutinize all my expenses and examine where I could cut costs. One stood out from the rest – my cell phone bill (okay, maybe Starbuck trips were up top there too). My plan with Verizon, which included about 500 minutes of talk, unlimited text, and 2GB of data on my iPhone 4 cost me a whopping $96.98 (including taxes). I was paying close to $1200 a year for something that wasn’t used much. That $1200 could easily go to paying off my student loans!

My Verizon contract expired in September of last year so I was free to change plans to whom ever I decided would meet my needs. I looked into AT&T, US Cellular, T-Mobile, and Sprint. The cheapest plan I could find at the time was Sprint at about $70-$80 a month. That would give me about $10 a month or $120 a year in savings, but I knew I could do better.

So I did what every normal person would do and “googled” cheap/budget phone plans. At first I was convinced that I would do a Straight Talk Wireless plan. Straight Talk offers no contract and unlimited talk, text, and data for $30 a month plus taxes. Not a bad deal I thought! And then I found out that you had to pay full-price for a new phone! My Verizon iPhone would not work on their system so I would definitely have to purchase a new phone. For a new (or used) iPhone I was looking at a price tag of $400-$650 for a new phone depending if I purchased a used iPhone 4s or a brand new iPhone 5.

I kept Straight Talk as a strong contender, but I really hated the idea of dropping over $500 for a new phone. At first during my new cell phone plan search, I was set on getting an iPhone. I wasn’t until I found Republic Wireless that I was open to switching to an Android phone. I found Republic Wireless through Mr. Money Mustache’s website. He is one of my favorite personal finance/frugal living bloggers. He spent a lot of time researching and trying new cell phones that fit his frugal lifestyle. Republic Wireless was his winner and continues to be so today. If it was good for him (and many other frugal bloggers) then it would be good for me.

Republic Wireless is a special wireless company. You can now choose from two phones: the Moto G ($149) or the Moto X ($299). When I made the switch in January I only had the option of the Moto X. You only have these two options because these phones are made especially for Republic Wireless. Republic Wireless had extremely low cell phone plan pricess because the company builds in a wireless transceiver into each phone. If you’re in an area with wifi your call will be made over the wifi connection. However, if you’re in an area with no wifi, the call will be made over the Sprint and/or Verizon cellular networks. The phone will automately switch from wifi to cellular if you walk outside the wifi zone (it’s worked great for me).

I’ve been using Republic Wireless since January and I love it! I purchased the Moto X for $299 plus taxes. I love the phone! It does everything I need it to do and the camera is about 1000 times better than the camera on my iPhone 4! You can google reviews of the Moto X for more details and comparison to other phones. I’m not a techie and I’m even going to pretend to be one either! 🙂

Republic Wireless has 4 plan options:

For the first four months I used Republic Wireless I used the $10 a month plan because about 90% of the time I was surrounded by wifi spots. It worked great for me and allowed me to recoup some of the costs I spent when I purchased the phone. In May I switched to the $25 a month plan because I would be riding my bicycle outside and wanted the ability to use Google Maps to find out where I am if I got lost. Thus far, my reception has been great. Of course, if you are considering changing to Republic Wireless, make sure you check their coverage maps HERE.

One of the best things about Republic Wireless is the ability to switch between the plans twice a month. When I travel out of the country (like my trip to Belize and Guatemala in May), I switched to the $5 a month plan for that week and as soon as I hit tarmac in Atlanta, I switched back to my normal monthly plan.

Another major benefit, which I haven’t used yet because I wasn’t aware of it until after my trip, is the ability to make calls out of the country back to the US if you’re on a wifi network. For example, when I was using the wifi on my phone at the hostel in Belize, I could have called my father in Maine. As noted above, I have not used this feature yet so I’m not 100% sure of the quality.

Let’s look at a comparison of the three cell phone plan options I narrowed down on:

Wireless Company

Monthly Payment

Cost of Phone

Yearly Cost of Plan (including cost of phone)

Verizon

$97 (w/ tax)

$200 (upgrade to iPhone 5)

$1364 (+ 2-yr contract)

Straight Talk Wireless

$33 (w/ estimated tax)

$550 (for iPhone 5)

$946 (no contract)

Republic Wireless $29 (w/ tax) $300 (for Moto X)

$648 (no contract)

It seemed like a no brainer when looking at the above table. Because I chose the $10 a month plan for 4 months, I should only pay about $605 for my total 2014 cell bill. If I had stayed on Verizon without upgrading my phone, I would have paid roughly $1164. I just found an extra $500 a year just by changing cell phone plans!

If you’re looking to change cell phones and save a boat load of money, I highly suggest checking out Republic Wireless! As a loyal Republic Wireless customer, if you use my referral link you can get a $20 credit (and I will also get a $20 credit). Win, win for everyone! Here is my referral link: Try Republic Wireless. Republic Wireless also offers a 30-day money back guarantee so if you don’t like it, you’ll get your money back! 🙂

** The above link is a referral link. As I mentioned above, I will earn a $20 credit if you decide to switch to Republic Wireless using my link. Republic Wireless did not pay me for this post and all my opinions are my own. Obviously, I really love this plan and phone or else I would not be using it and promoting it! 🙂

 

Personal, Professional, and Financial Goals: 6 Month Check-in

Where has the time gone?! 2014 is now officially half over and it’s time to do a 6-month check-in. I never posted my 2014 goals on this site, but you can click over to my coaching and training site and see them there.

Here are my professional and personal goals for 2014:

Professional:

  • Grow in my job – I have been in my current job for just over 3 months now and I really love it thus far. Throughout my public health graduate studies, I would have never thought that I would find a job in healthcare technology. It was a topic that never really interested me; however, now that I work in the field, I love it. Not only is healthcare technology important in the United States, but globally, where my heart lies in global health and international development. My job is challenging and rewarding. Each week I am learning new skills that will only improve my work quality and also aid in my future career development. In 2014 I look forward to working hard, learning new skills, and furthering my future career path. I’m still loving my job and I have expanded my skill and knowledge set that is not only valuable in my current job, but in my future career. I’ve been given some more responsible recently, which makes me happy and hopefully that will continue. I hope that I’ll be given some writing assignments by the end of the year that I can dive into since writing is one of my passions.
  • Grow my business – If you have read my blog for a while you have probably noticed the changes over the past couple of months. I plan to officially launch my new business in a couple of weeks. I started my own coaching and personal training business because it is my passion and I find great satisfaction in helping people achieve their goals. I don’t plan to make a million dollars in my business, but a few extra dollars to help pay my student loans would be nice. I have some interesting plans and opportunities in the future so stay tuned for future developments! My business is doing well. It’s still very small, which I prefer. I only take on about 4-6 clients total between both my personal training and coaching clients. I’m not out there to make a ton of money and I prefer to give each client individualized attention. I am currently in the process of becoming a certified RRCA run coach (I just need to complete a first aid course). I’ve also taught a lot of spin classes over the past few months at Zone 3 Fitness and the Bay Club and really love teaching.
  • Learn French – This has been one of my goals from early fall 2013. I want a future career in global public health and international development, thus I need to become bilingual, or at least competent at a second language. I’ve been slowly practicing my language skills via software programs, but I will continue in 2014 with french lessons at The Language Exchange in Portland. I don’t naturally pick up language quickly, so this is going to be a tough goal, but it is necessary and important for my future career goals. After traveling in Central America in May, I’ve discovered that I love the Latin American culture and have decided to switch from French to Spanish. I took a year of Spanish in college, but I don’t remember a whole lot. I begin my first class on Monday! 🙂

Personal:

  • Become more financially stable – The last couple of years have been a bit tough financially. Last year I took a risk with my career and it did not pan out as well as I hoped. The last couple of years were also riddled with unexpected purchases, i.e. lots of car repairs and health bills. My graduate student loans also kicked in and I quickly realized that about a third of my monthly income goes directly to SallieMae and Nelnet. Awesome. With my new job I received an increase in pay from my old one. I need to buy a new car some point this coming year and thus I have begun to put some cash away for that big-ticket item. I’m still driving my little car until it dies for good (or is going to cost me a zillion dollars to fix). I also plan to stash some money away again into my emergency fund since it became low due to said expensive car repairs. For the past few months I have created budgets and reviewed my spending habits to determine where I can cut back. Going into 2014 I feel pretty comfortable with my monthly budget and I have been researching ways to live more frugally. Stay tuned for that journey. Well, my little black car died in March. It was a sad day, but I am very happy with my new car! My father was very generous and gave me a down payment for my car, but I still have a $13,000 car loan plus about $32,000 in student loans. See below for more of my financial goals.
  • Travel – It’s ironic that one of my main goals is to save more money and live frugally, but I also seek adventure outside the US. I haven’t been to a new country in a couple of years and thus, 2014 is the year I discover a new part of the world. My mind has gone crazy with ideas, but I yet to commit to anything yet. I may travel to South America with a friend, go on a medical mission to a developing country, or take a solo trip to Southeast Asia or Europe. I love daydreaming about traveling the world and I know this year will be the year of an adventure. Anyone looking for a travel buddy? I traveled to Belize and Guatemala with one of my best friends in May for a week and will be going to the Azores Islands in November. All were new countries for me and definitely reignited the travel bug in me. I’ve been resisting the urge to impulse buy a plane ticket to Columbia! I traveled to New Orleans for work in June and absolutely fell in love with the city that I hope to pursue my PhD studies in. Montreal and Newport, RI are also in the planning stages as well as a couple big trips in 2015.
  • Volunteer more – This past fall I joined the Junior League of Portland, Maine and have met some pretty fabulous and inspiring women. The organization is built on giving back to the community, which is one of the main reasons I joined. I look forward to volunteering around the community with the JLP, but I also hope to give back to my community in other ways. I have been researching various organizations related to my career interests and will be making contact soon so hopefully I can help in any way needed. Junior League is awesome and I think all women should join! 🙂 I’m still seeking out more opportunities to volunteer as well. Since I have more time on my hands due to my hip injury, I am reaching out to a couple of organizations after the holiday.
  • Read a book once a month (or more) – I love to read and you periodically will have book reviews on my blog. For a collection of old book reviews click HERE. I’m an avid reader and I usually read daily, whether job related papers or pleasure reading. My goal in 2014 is to finish a book at least once a month; however, I would like to read more than just 12 books a month. Heck, in the past 5 days I have almost finished all three Hunger Games books. I have a stack of half-finished books so I will start my reading list there. I fell off the bandwagon on this one, but began back up again in May. I’m doing a summer book challenge which has inspired me to read about a book a week over the past two months. You can find out more information about the book challenge here.

Financial Update:

  • My Emergency fund is now up to also $1200! My goal is to have about $2000 in it by the end of the year. Right now, I’m a head of my schedule. Currently I put in $100 each month automatically from my checking account, but will increase the monthly payments to $150 in October. I keep my E-fund in an online bank. You can read more about why I use an online bank and how you can earn a free $76 by opening a savings account with Capital One 360. I just learned today that if you open a checking account and make the 5 purchases within 45 days, you’ll also earn an additional $100! Their checking account is fee-free and no foreign transaction fees!
  • Since March I’ve paid $1512.04 towards my student loans! Since April I’ve been paying an extra $150 towards my SallieMae loans. One of my $778 loans will be paid off this month (YAY!) and the second one will be paid off by hopefully October. I’m planning on selling my tri bike this fall and will use that money to pay off another bigger SallieMae loan. My goal is to pay off my SallieMae loans by the end of December 2015.
  • My net worth is getting closer to zero! My total net worth was about -$31,223 at the end of December 2013 and over the past six months is now sitting about -$17,896. The main reason that it shifted towards positive by nearly $15,000 is the purchase of my new car. Yes, my car loan currently sits at about $12,500, but my car is worth, according to Kelly Blue Book, $17,000. My investments are doing well. I currently put in 7% of my yearly income into my company’s 403(b) with a company match of almost 7%. I rolled my old 401(k) into a Roth IRA in March and have finally reached over the $6000 mark in April. I am planning to start contributing to my IRA this fall.
  • I haven’t been very good about sticking to my budget over the past few months. May was expensive because of my vacation. I had planned a head so I knew they were coming. June had some unpredicted extra expenses, such as $300 dentist bill, a few business-related expenses, and a $330 plane ticket to Portugal in November. My goal for the remaining summer months is to reign in my spending and stick to my budget better. I know I will have some extra expenses coming up such as another $90 dentist bill and an eye exam. I just need to stay out of the J. Crew outlet store!

Not to wish away the remaining six months of 2014, but I’m really excited about the prospective of nailing all my goals this year. I feel that I’m in a solid place both personally, financially, and professionally. I know 2016 is going to be a big transition year for me with my future goals of going back to school so I’m happy that I’m well on my way to be able to pursue my dream of attaining my PhD. And hopefully reach a net worth of $0 within the next year! 🙂

March Budget Check

My March budget is full of red! So much for sticking to the budget I worked so hard to create in January…

I was way over budget due to this kind of large purchase….

The new whip!
The new whip!

It was a sad day when my old car died last week. I knew the day from coming, but was hoping that it would occur closer to December. My father was generous and gave me money for the down-payment, but I now have a $13,104.20 car loan with a monthly payment of $232 starting in April. However, before I even took the car off the lot and to finalize the car loan through my credit union I had to buy car insurance. My 6-month payment was $588. And, of course, it will probably cost me another $500 in April to register it and pay the excise tax. Woof! I’ll be using the save I have saved thus far as a car down-payment to pay for the registration and taxes.

I also went way over my normal food budget as well because of my birthday. I went out for lunch and drinks with some friends, which I normally don’t do very often. I also spent $44 on the night I test drove my car to bribe my father to come to the dealership with me to negotiate the price of the car. Although he really do anything. I spent way more at coffee shops too. Bad, bad!

Eeek Lots of red!
Eeek Lots of red!

I went over my student loan payments, which I consider to be a good thing because I’ve paid off more debt. During the month of March I paid off a $368 grad school loan that was just annoying me plus my normal monthly payments.

Let’s see. I had a lot of extra predicted spending in March, like my dog’s $200 vet bill for her annual exam. I picked up a couple of new shirts at Old Navy on my birthday. They were on sale! Yay! Plus, I had some small business fees as well.

March expenses by categories
March expenses by categories

I think the highlight of my March personal finances was rolling over my old 401k account to a new Roth IRA account with Vanguard and making some $$! I’ve finally been making money with my 403b account with Nationwide as well. I love watching my retirement accounts make money! Let’s hope that pattern continues for the next 40+ years. 🙂

Total Debt as of 4/3/14: $50,121.13 (thank you car loan!) <- includes this month’s credit card bill as well (I pay everything using my CC to earn airline miles)

Total Student Loan Debt as of 4/1/14: $32,842.63 (Goal: Bring total loan debt under $30,000 by end of 2014)

Emergency Fund as of 4/3/14: $850.68 (Goal: $1500 by end of 2014)

Total Savings + Investments as of 4/3/14: $12,866.13

Net Worth as of 4/3/14: $21,255.00 (does not include the value of my new car)

The Time My Car Died and I Had to Buy a New One…

I’ve mentioned several times in my previous blog posts that my big purchase this year was going to be a new car. I purchased a 2000 Hyundai Elantra during the summer of 2006. I worked two jobs the entire summer (without a semblance of a life) to pay for the car. I think I paid about $5000 for the car.

As you can imagine, the older a car gets, the more repairs and money you have to put into them. The past three years have yielded expensive repairs, i.e. a new timing belt, a new clutch, a new alternator, etc. In January I put $400 into my car to get her to past inspection and to hopefully last till December, which was my target purchase date.

Saying goodbye... and taking my plates off
Saying goodbye… and taking my plates off

Well, my poor little car couldn’t make it till December. Last Monday night she died on my way home from work. I was within 3 miles from my house when I stopped at a stop sign before making a righthand turn towards home. My poor little car decided that the stop sign would be her final resting stop. She actually wouldn’t start the friday night before in our driveway, but succeed to start the next morning. I knew something was up, but I was hoping that it was just a fluke.

I called AAA for a tow truck and a nice man pushed my car around the corner so I wasn’t blocking the intersection. Talk about embarrassing! Our trusted family mechanic looked at my car and thought it was the fuel pump. It could have been fixed for about $250, but at this point in my car’s life, I feel like I’m throwing dollar bills down the drain. I decided my money is best spent on purchasing a new car.

I did a lot of research online. I was between the Hyundai Elantra, Ford Focus, Toyota Corolla, and VW Jetta. My budget was about $15,000 (and I was secretly hoping that I could purchase a car plus pay all the tax and fees with the $15,000). I was leaning towards a new car because I couldn’t find too many low mileage used cars. Most used cards I found were priced about the same as a new car.

I checked one of the local car dealer’s website on Thursday morning and found a web special for a left-over 2013 Hyundai Elantra. It was a standard hatchback model. I was hoping to purchase another standard because they tend to be a bit cheaper and not many people want a standard and thus I could probably get a better deal than an automatic. I test drove the car Thursday night. I drove home picked up my Father and had him test drive it as well. We drove back to the dealer and talked pricing with the sales lady. I wasn’t pleased with the presented price and left giving them my bottom line. She said she had to talk to her manager and would call me in the morning.

I got a call at 9am on Friday when the dealership was open. She was willing to bring the price down to my budget. I told her I wanted the offer in writing and would call her back later once she faxed the offer to me. I called my Father to discuss the offer and he suggested that I fill out the car loan application at the credit union and get an insurance quote. I did both and then accepted the offer.

This morning I went back to the dealer with my loan check and my down payment check. The whole process of buying a car is stressful. I’ve been sick with a cold all week and adding on the job of buying a new car has left me feeling still like crap. But, I learned a few lessons about buying a car and hopefully I won’t be using them anytime soon! The dealership tried to quote the price of the car to me in monthly payments. Sure, I could afford their offer, but I wanted to know the true cost of the car! Watch out for this. If you extend a car loan to 72 months then of course your monthly payments will be smaller!

Also, make sure you get everything in writing. I would also suggest getting insurance quotes before purchase as well. You don’t want any expensive surprises later on when you realize that the fancy car you just purchased is going to cost a lot more than the more reliable and plain car.

I lucked out and got a good price on my new car. I probably could have negotiated another $500 off the price, but I just wanted the process to be over. I had a few things working in my favor as well. The car was a 2013 leftover. It was standard. It was the end of March, which means the end of a month, the end of a quarter, and then end of the fiscal year for most car manufacturers and dealers! I couldn’t quite get them to agree to everything including tax and fees under $15,000, but I’m happy with my total price.

The final goodbye (and time to buy a new Ironman sticker)
The final goodbye (and time to buy a new Ironman sticker)

My mechanic has offered to fix and sell my old for me with a cut of the sale. Totally fine by me! I’ll be lucky to get a couple hundred bucks, but it’s better than nothing! I was a bit sad to say my final goodbye to my old friend. We had a good almost 8 years and 100,000+ miles. I think I got my moneys worth from that car. Now, onto better and more adult-like things, like a monthly car payment….

The True Costs of College: Repayment Plans and My Story

thetruecostsofcollege

Oh, student loans… where do we start? The average college graduate is over $20,000+ in debt when they graduate. Not only do college grads graduate with a load of debt, but they also graduate into a terrible job market. I graduated from undergrad early in December 2008, right when the US economy began to tank. Luckily I had a part-time job at the mall, but it took me over 3 months to find a “real” job. My first “real” job was a temp position at a large biotech company. I worked there for 9 months. When I realized that the company was not going to hire me permanently, I began my job search again. Finally, I secured a full-time job in January 2010, where I worked for close to 4 years at a small biotech company. In May 2010, I began my Masters in Public Health program, which I finished in December 2012. I once again I began my job search in 2012 to find my first “career” job in public health. I had several interviews where I was the second choice candidate, which was nothing short of frustrating. In September I landed my current job that I absolutely love.

Now, what does my job search have to do with my student loans? A lot of reasons! The day you sign your name on the loan paperwork, you’re stuck with them until you pay them off or die. Even if you go through bankruptcy you are still stuck with your student loans! The government has designed multiple repayment plans based on your current income to help (or ensure) you pay your loans back.

When you graduate college you get a grace period of 6 months before your loan payments kick in. The intent for the grace period is that you will find a job, settle in and make some money so you can actually pay your loans back. With the current economic status in the US, many students haven’t found a job during that time period and/or are unemployment. Not a fun position to be in as you can imagine.

My undergraduate loans kicked into repayment around May 2009. I was taking several classes at the local community college at the time so my SallieMae loans went into deferment. However, I continued to pay my private loan and Perkins loan throughout my time in school. Once my classes were done, I began paying the minimums on my SallieMae loans, which at the time were about $144 a month. When I began grad school, my federal loans once again went into deferment. I was lucky that my loans were all Stafford Subsidized loans, meaning that the government picked up the tab on the interest while I was in school. Throughout my grad school years I only paid my Perkins Loans (which I paid off about a year ago!) and my private loan (which I just paid off in January with a little help from my father).

During the summer of 2012 I didn’t take any classes because I had taken all the courses offered during the summer term. The school made me take a “leave of absence” for the summer because I was not taking any classes (this was a major pain in my butt and I had to sign a bunch of pointless paperwork) and to my surprise SallieMae immediately sent me a bill for my undergrad loans! I was not ready for those payments during that summer, but I managed. Once I began my final semester in September, my loans went back into deferment until January. I finished my MPH degree in December 2012. SallieMae wanted money again on January 2nd. This time it was about $150 a month, which I have been paying every month since then. My grad loans through Nelnet (plus one undergrad loan) began repayment in August.

I have always utilized the standard repayment plan on my SallieMae loans. However, after calculations of my various student loans, I was going to pay over $650 a month on student loan payments each month… more than a third of my monthly income! I knew I could not afford those payments at the monthly income that I was making. I looked into consolidating my student loans, but was weary about the idea knowing that I wanted to go back for my PhD in a few years. If you consolidate your student loans, most of the time if you return to school, you are not granted deferment on your loans and must make monthly payments. A friend of mine suggested looking into the graduated loan repayment plan instead of consolidating my loans.

I decided to change my Nelnet loans from the standard repayment plan to the graduated repayment plan, converting my monthly payment of $300+ to $182 a month. With this change my total monthly student loan payments came about $350 a month. Making it much more affordable for someone who generally lives paycheck-to-paycheck.

In January, I began my annual review of my student loans. My private loan was paid off in January with the help of my father, resulting in $50 freeing up from my budget. At this time I also dumped my $100 Verizon cell phone bill for a monthly $12 plan (post coming soon about that!) freeing up addition money. When I began examining my Nelnet loans closely, I realized that a few of my loan balances were more than the original amount I had taken out due to interest. This did not make me happy. I succeeded to go back and edit my monthly budget to accommodate a higher student loan payment. The next day I called Nelnet to change my repayment plan from graduated back to standard. My monthly payments almost doubled from $182 to $291 a month.

This past month I had a small $368 loan from one of my summer courses that was really annoying me and so I paid that off. In an effort to pay my student loans off faster, I decided to change my monthly Nelnet payments to an even $300 a month. I will be paying an additional $13.75 a month. That amount is just cents compared to the total loan balance of over $23,000, but every little penny counts over the repayment period.  As of March, I will be paying about $450 a month in student loan payments and I aim to pay at least an extra $100 a month to pay them off faster as well. I will talk more about my plan of attack to pay my loans off in less than 10 years in my next post.

I mentioned a couple of loan repayment plans above, but let’s take a closer look at the various options for federal student loans:

  • Standard Repayment Plan – A fixed monthly payment of at least $50 a month for 10 years. You will pay the least amount of interest on this plan compared to other plans.
  • Graduated Repayment Plan – Monthly payments are lower at first and generally increase every 2 years for the term of the loan – usually 10 years. You’ll pay a bit more interest on this repayment plan than the standard plan.
  • Extended Repayment Plan – Monthly payments are either fixed or graduated for a loan term of 25 years. You must have at least a certain amount of student loan debt to qualify for this repayment plans and will pay significantly more in interest than any 10-year repayment plan.
  • Income-Based Repayment Plans (IBR) – The maximum monthly payment will only be about 15% of your discretionary income and your monthly payments will increase as your income increases over 25 years. You must qualify for this repayment plan.
  • Pay As You Earn Repayment Plan – The maximum monthly payment will only be about 10% of your discretionary income and your monthly payments will increase as your income increases over 20 years. You must qualify for this repayment plan.
  • Income-Contingent Repayment Plan – The maximum monthly payment is based on your income. Each year payments are determined based on your adjusted gross income, your family size, and your total loan debt. Your payments change as your income changes for up to 25 years.
  • Income-Sensitive Repayment Plan – Your monthly payments are based on your annual income and will change as your income changes. The loan term is 10 years and you will pay more interest than the standard plan.

As you can see, if you can afford it, utilize the standard repayment plan because you will pay the least amount of interest. However, if you just graduated and got a low paying job and really can’t afford to pay your student loans, contact your lender about options. Always, pay your student loans each month, even if it is just a little bit of money. In the long run, you will be thankful that you did.

In my next post I will discuss my plan to pay off half my student loan debt by 2017!

For more information on student loan repayment plans check out: http://studentaid.ed.gov/repay-loans/understand/plans.

In case you missed my first post of the series… check out The True Costs of College: My Student Loan Debt Story – the beginning of my journey to pay off nearly $45,000!

The True Costs of College: My Student Loan Debt Story

 

thetruecostsofcollege

Welcome to my first post of my new series, The True Costs of College, where I will share my story of student loan debt, ways to tackle debt, and ways to minimize or avoid debt to pay for one of the most important investments you’ll ever make – your college education.

For a large majority of American college graduates, student loans are the storm clouds above our heads. For many of us, those storm clouds will be circling around our heads for many years, possibly decades. Personally, I think student loan debt in the United States has always been a taboo topic until recently. Everyone knew that recent college graduates were thousands of dollars in debt, but no one really wanted to admit there was something wrong with that.

Personally, I believe that:

  1. A college education is becoming way more expensive than it should be making it unattainable for most people without taking on an insurmountable debt,
  2. Incoming college freshmen are extremely uneducated about student loans, and
  3. We need to start talking about it.

I graduated from a state university in December 2008. According to a study conducted by The Project of Student Debt, in 2008 67% of students graduating from a four-year college/university had student loan debt. The average debt level for graduating seniors with student loans was $23,200 in 2008. In 2004 the average was $18,650, an increase of 20% from 2004 to 2008.

The average 2012 student loan debt for someone who graduated from a Maine college/university is $29,352. Maine is ranked 7th in the country for highest student loan debt according to the most recent data at The Project of Student Debt. I attended a small state university where the average student loan debt in 2012 was $26,319. About 87% of students graduated with some debt.

According to the Institute of Higher Education Policy, about 14% of the 37 million borrowers with outstanding loan balances have at least one past due loan account. Two out of every 5 borrowers are delinquent at some point in the first five years of repayment. Now, these figures don’t even include the average student credit card debt of about $3000.

Of course, if you go on to graduate school you are most likely going to fund your entire education through loans adding on tens of thousands of dollars if not more. Education in America is becoming ever more expensive by the year. I think that the cost is becoming ridiculous, but I do believe that we should pay for some of our higher education. Yes, I hate my student loans and I believe that the cost of my education was probably higher than it should cost, but I believe that I should pay for it. A college education is a choice not a right. I made the choice to attend college and graduate school because I believe in the power of education and furthering my knowledge.

I think one of the problems we have in America with the ever-increasing student loan debt is that we are not freely talking about it and not educating our high school students who will enroll in college soon. There are so many things I know now that I wish I knew as an 18-year-old college freshmen.

I have decided to be candid and open about my student loan debt and share my learnings in hopes of educating our future college students.

Source - Huff Post (AP Photo/Jacquelyn Martin)
Source – Huff Post (AP Photo/Jacquelyn Martin)

Source: Huff Post <— Article includes a great infographic about student loan debt

My Student Loan Debt Story

I began college in the Fall of 2005. I first went to a small private liberal arts college in NH for my first semester. I was lucky that I had a lot of grants and scholarships that paid for about 90% of my costs. I didn’t like the college and transferred to a small liberal arts state university where I finished out my degree. Again, my first two years at the school were low in student loans because I had grants and scholarships. I quickly discovered that as you move up in years in college you begin to lose those grants and scholarships and gain more loans. I finished college a semester early, although I could have finished an entire year early has I known (that’s another story for another time). I graduated undergrad just as the economy tanked in 2008 and struggled finding a job for several months.

I worked as a temp at a large biotech company until I found my first “real” job in January 2010. I worked at that company for almost 4 years. In 2010 I decided I wanted to go back to graduate school to earn my Masters in Public Health degree. I attended another Maine university (a private school) as an online student and I was able to work full-time as well. I finished my MPH in December 2012 after 2.5 years of full-time school and work.

I personally funded about 95% of my entire education. My parents paid very little of my education. My mom paid the 1.5 years I lived in an apartment during my undergrad years, and that’s about it. During my junior year of college I took out a $5000 private loan to paid for living expenses and also the costs of applying to medical school (although I chose not to apply later that summer). Here is the breakdown of my entire student loan debt as of March 3, 2014:

Undergrad Loans

Year Original Amount Current Amount – 3/3/14 Interest Type
Year 1 – 1st Semester  $          1,312.00  $                        745.88 Variable/Subsidized
Year 1 – 2nd Semester  $          1,312.00  $                        745.37 Variable/Subsidized
Year 2 – Full Year  $          3,500.00  $                     2,854.02 Fixed/Subsidized
Year 3 – Full Year  $          5,500.00  $                     4,825.22 Fixed/Subsidized
Year 4 – 1st Semester  $          2,750.00  $                     2,480.00 Fixed/Subsidized
Year 1 – Gate Loan  $          1,300.00  $                               –   Variable
Year 3 – Private Loan  $          5,000.00  $                               –   Variable
Year 1 – Perkins  $          2,000.00  $                               –   Fixed
Total  $        22,674.00  $                    11,650.49

Grad Loans

Semester Original Amount Current Amount – 3/3/14 Interest Type
Summer 2010  $          1,714.00  $                     1,716.06 Fixed/Subsidized
Fall 2010  $          3,351.00  $                     3,354.83 Fixed/Subsidized
Spring 2011  $          3,435.00  $                     3,438.93 Fixed/Subsidized
Summer 2011  $             368.00  $                               –   Fixed/Subsidized
Fall 2011  $          4,004.00  $                     4,008.63 Fixed/Subsidized
Spring 2012  $          4,128.00  $                     4,132.98 Fixed/Subsidized
Fall 2012  $          4,429.00  $                     4,669.01 Fixed/Unsubsidized
Total  $        21,429.00  $                    21,320.44

Total Debt

$      44,103.00

Remaining Balance

$      32,970.93

Of course, the above figures do not take into account interest over the life of the loan, which will most likely add an additional $6000-$7000 to the total.

Next time I plan to discuss different repayment options for student loans and my plan of attack to pay off my debt.

Do you have student loan debt? How much? Do you think as Americans we should be responsible for paying for our college education?

Frugal Fridays: My Obsession with Budgeting

 

Originally posted on February 14, 2014 on Big Sky Multisport Coaching & Personal Training.

frugalfridays

The first step that I took to gain financial stability was to make a budget. Well, I actually made about 500 different budgets. I’m a wee bit obsessed with making budgets now. I’m beginning to think that I should have been an accountant.

My main budgeting method is Mint.com. If you don’t use Mint then I highly recommend that you hop on that train. It’s completely free and you can upload all your banking data plus investments, car and house loans, and student loans. It’s a great way to keep track of your money and debt and also your overall net worth. I find that Mint is a helpful tool in determining where your money is going and ways to cut your budget.

Along with my Mint account, I also created about 100 different types of budgets through Excel. I tried out a bunch of different budgeting temples offered through Microsoft Excel, but none of them really met my needs. Thus, I created my own from scratch. From there, it involved into about a 10-sheet spreadsheet containing my yearly budget, monthly bills, student loan details, and three-year finance goals.

A glimpse at my budgeting spreadsheet

A glimpse at my budgeting spreadsheet

A few of my three-year financial goals include: purchasing and paying off a new car by 12/31/15, paying off my SallieMae student loans (currently about $9200) by 12/31/16, and a volunteer trip to Africa in November 2015. I’ve calculated the amount I need to transfer to each of my corresponding savings accounts each pay check in order to meet my goals by my deadline.

By creating my own budgeting spreadsheet I was able to add everything I needed into one spreadsheet that was easy for me to edit, read, and keep track of my income and expenses. I also color-code everything because, well, I’m a bit obsessed at the moment.

A lot of people get overwhelmed with budgeting. Hence, why so many people are in debt and/or spend money on useless or unneeded things. Here is how I went about creating my budgets:

  1. Determine your monthly take-home pay
  2. Determine your monthly “hard expenses,” i.e. rent, student loans, health insurance, etc. (basically anything that you must pay each month and the amount doesn’t usually change)
  3. Determine your monthly “soft expenses,” i.e. groceries, gas, gym memberships, coffee shops, etc. (soft expenses include items that have more fluid costs each month and ones that you could probably cut back on if needed)
  4. At this point, decided if you prefer software/website programs such as Mint, or if you would rather create your own budgets through Excel
  5. Subtract all your expenses from your monthly income
  6. Hopefully you have money left over! If you don’t, then you need to readjust your expenses. Start with your soft expenses first. Trust me, there are ways to cut back on things.
  7. Stash your extra money into a savings account. You should always pay yourself first! If you have goals, such as a vacation, open a second savings account to put money away for this expense.
  8. If you have a lot of debt, especially credit card debt, put extra money towards paying those debts off! You can probably cut back on going out to eat or going to the movies to put extra money towards those extra payments.
  9. Stay on budget throughout the month! And check back throughout the month to see how you’re doing.

Budgeting shouldn’t be hard. Yes, it may not be fun because for most people, it acts as a wake-up call for where your money is going. You work hard for your money so why put it down the drain on stupid purchases or wasteful spending!

Frugal Fridays: The Savings Game

Originally posted on January 24, 2014 on Big Sky Multisport Coaching & Personal Training.

frugalfridays

Two weeks ago I wrote my first Frugal Friday post on my overall 2014 financial goals. In my 2014 goals post I outlined that I have some big financial goals for the year with the main one to become more financially stable.

The past couple of years have been a bit of a struggle at times. I mainly lived paycheck-to-paycheck. I’m not horrible with money, but I know that I could make improvements in my life so that I’m not totally stressed out over the issue. I’m lucky that I’m not like the average American.

The average American household debt is:

  • $15,270 in credit card debt
  • $149,925 in mortgage debt
  • $32, 258 in student loan debt

Source: (http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/)

I have no credit card debt. I only use my card if I can pay in full each month or for big purchases, like my computer for grad school a few years ago, where I used a 12-month no interest card to break the cost into monthly payments. I currently have about $35,000 in student loans (both undergrad and grad) and, of course, no mortgage at this point in my life. One of my long-term goals is to get out of debt as fast as possible!

Updates since the last post two weeks ago:

  • My car passed its inspection with only $400 of repairs and should (cross fingers and pray) last through December, which is my targeted new car purchase date
  • One of my goals was to pay off a $1500 student loan (originally $5000 loan) in 2014. I paid for about 95% of my own education (both undergrad and grad) through scholarships, grants, and loans. My parents couldn’t afford to pitch in much, but every once in a while my father will put some money towards my student loans. He decided to give me a late Christmas present and paid my $1500 loan! One goal accomplished and that now frees up an extra $50 a month! 🙂
  • For the most part I stayed on my budget for the month of January, except for the car repairs since I didn’t realize my inspection ran out in December. Opps!

This past week at my Junior League meeting we had a financial advisor come speak to us about financial wellness. The woman was hysterical and I think she missed her calling as a stand-up comedian. I’d been waiting all year for this meeting because of the topic, but honestly wasn’t expecting to learn anything new. My father enjoys drilling financial stuff into my head and I read a lot of the topic through books and personal finance blogs (my new favorite topic to read about! Let me know if you know any good blogs out there!).

Not only did I love this woman because she made such a dry and scary topic funny, but I also really liked her message. Money is a very sensitive topic for just about everyone. It makes me nervous and at first I was very reluctant to talk about it here on my blog. However, I think as humans, especially women, we need to be more open about the topic so we can educate ourselves and learn ways to take control of it and manage it in our daily lives. The advisor’s message was that money should be viewed as a tool. Money doesn’t define us, but we should use it as a tool and invest in what makes us happy. Obvious, we need to be smart with it. However, we shouldn’t judge people who spend more money on food vs. travel. We all have our own priorities in life.

Her biggest message to us is to pay yourself first. I absolutely agree with her. Investing in your future is important. When I first started my first “big girl” job in 2010, my company didn’t have any retirement plan options because it was so small. During my second year the company began a 401(k) plan. They offered no company match, but I put in 8% of my paycheck each pay period. With my new job I have a 403(b) with company match. With company match and my own contributions I put 12% of my income into my plan each month. I’m young and I have time, but I want to ensure that I have a good solid retirement plan for the future because I can’t predict what the future will unravel. What will my retirement age be? Will I get Social Security? And, if I do, when? Will I have expensive health problems? Financial planning experts suggest that one should put between 10-15% of their yearly gross pay into a retirement plan.

As I mentioned in my last post, I use Mint.com for my budgeting, which I absolutely love. It’s 100% free and you can even download the app on your smart phone to keep track on-the-go. I also recently discovered ReadyForZero, which focuses on keeping track of your debt. There is a free version and a paid version. I use the free version. You can link all your loans and banking accounts to the site and keep track of your debt. You can also use various calculators to figure out when you can pay off your debt if you paid x amount each month.

I currently have a checking account and two savings accounts at my local credit union. I have several big purchase goals this year: a new car, emergency fund, and travel. I use my checking account for bills and everyday expenses. One savings account is for travel and the second as my general savings account. Last week I began researching high interest rate savings accounts. Interest rates still suck in the United States, but I found a good one with Barclays. Yesterday I opened a “Dream Account” with them at an interest rate of 0.95% APY. There are other perks as well, such as additional bonus interest rate percentage if you don’t make any withdrawals in a specific time frame. Originally my plan was to use this as my E-fund, but then I decided to use it as my new car fund.

During the month of February I hope to come under budget so I can put more into my savings accounts. What ways do you saving? What tools do you use to manage your budgets and accounts?

~ Happy Training (and Saving)!

Disclaimer: I have no affiliation with any of the websites and/or banks mentioned above. I only discuss them because I personally use them and find them helpful. I was not compensated in any way. All my opinions are my own.