Tag Archives: money

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! 🙂

 

April Challenge: Living on Food Stamps Week 2

AprilChallenge

My second week living on $37.90 a week for food was a  bit harder due to the fact our refrigerator died mid-week. I keep a lot of my lunch food at work so I don’t have to pack a lunch each morning. It’s convenient for me, but I’m sure I annoy some of my coworkers by taking up prime real estate in the fridge at work. However, I have a lot of frozen food and then all my eggs, yogurt, greens, etc. in my fridge at home.

The broken fridge...
The broken fridge…

My father rushed all the frozen stuff and the eggs and dairy products to his girlfriend’s house for two days. The remaining fridge items spent two days in a cooler in ice outside on our deck. I was content with breakfast and lunch items at work, but dinner was a little harder to plan and cook due to the fact a lot of my food was not in the house. I tried to get creative though.

I spent a total of $41.32 for the week in food. I was $3.42 over budget. Womp, womp, womp…

I ate dinner Wednesday at my Junior League meeting. I had Italian sandwiches for the first time in years and I actually don’t really like them. I think I was just super hungry from my strength training workout prior to my meeting. On Friday we had a team meeting at work and I ate an entire small Mashed Potato pizza from Otto’s. #sorrynotsorry My excuse – I just ran 3+ miles before lunch….

The evidence
The evidence

Here’s the breakdown:

Trader Joe’s

  • 3 Kiwis – $1.47
  • Organic plain whole milk yogurt – $2.99
  • Green Kale – $2.29
  • 2 Green apples – $1.38
  • Frozen mixed berries – $2.99
  • 1 Red onion – $0.89
  • Coconut milk unsweetened – $1.99
  • Sweet relish – $1.99
  • 1 Avocado – $1.39
  • Bag of organic whole carrots – $0.89
  • 1 Dozen cage-free eggs – $2.99
  • Brown rice tortillas – $3.49

Hannaford

  • 2 Muffins – $1.78
  • Hot cocoa mix – $1.79
  • Sandwich baggies – $1.99** non-grocery item
  • Romaine hearts – $2.79
  • Frozen red raspberries – $2.99
  • Potato chowder soup – $3.49
  • marshmallow peeps – $1.39

Damn you marshmallow peeps! Peeps are my guilty pleasure and I only eat them around Easter. I tried to be strong, but their little chocolate eyes just stared me down and begged me to buy them (and then eat them)! If you remove the sandwich baggies, I spent a total of $39.33 on food for the week. I purchased the soup Thursday night for dinner since our fridge was dead and almost all my food was either at work or at my father’s girlfriend’s house.

A collection of lunches for the week
A collection of lunches for the week

My lunches and dinners consisted mostly of my poor man’s “Chipotle” bowl and soup. Breakfasts consisted of yogurt and fruit or eggs (when I had them in my fridge). Very similar meals as last week. I did find a recipe to make cauliflower soup, which is why I purchased coconut milk, but haven’t made it yet. That’s on this week’s agenda. One of my favorite lunches (not pictured) was chicken salad (made with canned white chicken, plain yogurt, and sweet relish) on salad greens on a brown rice wrap. Yum!

Let’s hope I can under-spend the next couple of weeks so I average only spending $37.90 a week. It’s getting tougher though. I so badly want to buy more fresh fruit and veggies, but I’m trying to work with what I have. I’m heading to Belize in less than 4 weeks for vacation, so I’m hoping to focus on using the food I have in my pantry and freezer instead of buying a ton of new foods. I definitely need to get creative and find some new recipes!

Do you have any healthy-ish recipes to share? preferably ones that work well for someone on a tight budget?

April Challenge: Living on Food Stamps Week 1

AprilChallenge

Week one of my April Challenge is in the books as of yesterday! It actually overlapped a little bit with week two because I decided to go back to my regular grocery shopping schedule of shopping on the weekend, thus I’m going to push this out to a 5 week challenge and go into the first few days of May.

Last Tuesday night after my spin class (I teach spinning at Zone 3 Fitness on Tuesday nights at 5:45pm. You should totally check it out!) I headed back into Portland to shop at Trader Joe’s. Let me tell you. The best times to shop at TJs is either late at night, during the work day, or early Sunday mornings! I armed myself with a cart, my calculator, and a notebook to make sure I stayed under my weekly allotment of $37.90.

Armed with my calculator, little notebook, and cart!
Armed with my calculator, little notebook, and cart!

I used to shop with a grocery list, but I haven’t in quite some time. It is something that I need to get back in the habit of doing and meal planning. I find that if I meal plan in advance I only buy what I need for the week and don’t waste as much food. Mentally I went in with an idea of what I wanted to buy and eat for the week.

My focus was getting healthy food that I could compliment with ideas that I had in my pantry. About a month ago I inventoried both my freezer stock and pantry. I highly recommend doing this every so often so you know what you have and can plan meals around items you already have.

pantryfood
Food from my freezer and pantry when I did an inventory a month ago

I made my way around the store checking prices and writing down every price of every item I placed in my cart. I periodically checked the total of my cart to make sure I stayed under the limit. And I did! I left TJs only spending $33.90 leaving me with an extra $4.

The food haul from TJs
The food haul from TJs

Here are the items I purchased:

  • Creamy Tomato Soup – $2.49
  • Organic Plain Whole Milk Yogurt – $2.99
  • Organic Black Beans – $0.89
  • Romaine Lettuce – $1.99
  • Dark Chocolate Covered Almonds Snack Size – $0.99 (I was hungry after spin)
  • Frozen Mixed Berries – $2.99
  • Pretzel Stick Bread – $0.99 (once again I was hungry)
  • TJs Bacon Ends & Pieces – $2.99 (side note: not really a fan, too much effort to take a part and cook)
  • Pico de Gallo Salsa – $2.99
  • Bag of Minneola Oranges – $2.99
  • Granola – $3.49
  • Broccoli – $1.99
  • Avocado –  $1.39
  • Cheddar Snack Sticks – $3.99
  • Cucumber – $0.69

As you can see, I was able to purchase semi-healthy items. Of course, fresh fruit and veggies are bit more expense and would have limited the number of items I could have purchased. Same with meat. Meat is definitely expensive, whether its frozen or fresh. Luckily I have a bunch of chicken and fish in my freezer at the moment. Although, I didn’t eat much meat at all this week.

So what did I eat all week? I lucked out Wednesday. I attended an all day conference in Augusta for work and ate breakfast and lunch there. Actually, I ate my first breakfast at home – yogurt, berries, and a handful of granola. It’s my normal breakfast if I don’t have a ton of time to cook eggs.

My "Chipotle" bowl
My “Chipotle” bowl

 

Most of the week I mixed a bunch of food together and ate it. My favorite is my own version of the Chipotle salad bowl with lettuce, rice, avocado, cheese, and salsa. I also ate some hardboiled eggs, apples with peanut butter, oranges, and nuts. On Thursday night I cooked up some coconut flour pancakes so I could use some of the fresh maple syrup my father got at the Merrifield Farm on Maple Sugar Sunday. Yum!

On Saturday I taught spin and then did a killer strength circuit workout that left me sore for days. I then ran some errands and didn’t plan well for food after my workout. Bad Katelyn! I ended up treating myself to a frozen yogurt at Red Mango in the mall. It cost $3.76 and definitely hit the spot! On Sunday I ate some eggs and bacon for breakfast and hit up the beach with my dog and a couple of friends and their dog. Afterwards we went to Red’s Ice Cream and my friend brought me an ice cream. Thanks! After the beach I did my grocery shopping for week two at Trader Joe’s. I will recap that next week. Week two will run from Sunday to Saturday.

The evidence!
The evidence! Week one total: $37.66

Overall, I do feel hungry. I’m an athlete training for triathlons right now and of course after workouts I get hungry! Hence the frozen yogurt on Saturday. That was bad planning on my behalf. I do think with better meal planning then I would be more satisfied throughout the day. I’m currently working on that in week two. But, the latest kicker is our refrigerator just died tonight. Awesome! Luckily I keep a lot of my food at work for the week. Sorry to my co-workers who deal with me taking up half the fridge. But that means the possibility of losing some food if we don’t either get it fixed or repaired ASAP! Stay tuned for week two recap next week!

 

Do you think you could survive on $37.90 a week? Do you think you could eat healthy with that budget? What are your go-to healthy budget-friendly meals? I would love to share some! 🙂

Frugal Fridays: My 3 Year Financial Goals

frugalfridays

I’m now officially in my late 20s. Oh the horror! I will turn the ripe old age of 30 on March 8, 2017. My goal is also to return to graduate school for my PhD by Fall 2017. For the next 3-4 years I have some big goals that I hope to achieve with a lot of hard work and hopefully a bit of luck.

A large majority of my goals are related to financial stability and freedom. Hence why I created this blog; I want to convey my journey in personal finance, as well as travel and life. Through this blog I am very candid about my personal finances. Personal finances have always been a taboo topic in modern American culture, and I believe that money needs to be discussed more openly.

According to the NerdWallet, as of March 2014, the average American household debt is:

  • Average credit card debt: $15,252
  • Average mortgage debt: $152,209
  • Average student loan debt: $32,986

Those statistics are scary figures and I personally believe that a part of it has to do with poor personal finance education and discipline. I believe that the more open people are about their money and personal finance, the more others are aware of it and the more educated they become about money.

I grew up with a pretty good understanding of money. My father really enjoys lecturing me about personal finance, investing, and really anything else. Personally, I think he just likes to hear himself talk half the time. I have a BA in biochemistry from a small state university and a MPH in public health from a private university. I graduated with a total of $44,103 of student loans (not including interest over time).

I’m pretty good with money and tend to save more than I spend. The past few years I have been competing in the sport of triathlon, which I absolutely adore and it is a major part of my lifestyle. The sport of triathlon is not cheap. The further I got into the sport, the more I wanted a better and more expensive bike and to compete in bigger and more expensive races. I ended up spending way more than I probably should have on equipment and expenses related to triathlon (I never went in debt because of these purchases). I don’t regret my purchases, but I had wished that I focused a bit more on paying off student loans etc.

Now that I achieved one of my main goals – to become an Ironman (you can read more about my triathlon life on www.bigskymultisportcoaching.com), I have decided to refocus more on my career and financial goals.

I keep my goals in my personal finance spreadsheet that I created to keep track of everything from my monthly budget, bills, student loans, vacation budgets, etc. I’ve decided to make my goals public to allow others to hold me accountable for my goals and also to show other 20-somethings that educating yourself and making personal finance a priority at a young age will only pay off in the future (I mean that both literally and figuratively).

2014:
  • Purchase new car
  • Save $1500 in my emergency fund
  • Pay off my private student loan (Balance ~ $1500) – PAID
  • Pay off one of my SallieMae loans (current balance ~ $745; target date: 9/14)
  • Rollover my 401k from my old job to a Roth IRA and save cash for the tax payment in 2015
  • Contribute the maximum percent of my salary to receive a company match in my 403b
  • Save my Belize vacation in May and also for my Africa volunteer vacation in November 2015
  • Continue to pay the minimum on all my student loans (estimated 2014 payments: $5100)
2015:
  • Save an additional $2000 in my emergency fund (Target end of 2015 total: $3500)
  • Pay off a second SallieMae loan (current balance ~$745; target date: 1/15)
  • Use the snowball method and pay extra on another SallieMae loan
  • Continue to pay the minimum on all my student loans (estimated 2015 payments: $5100)
  • Continue to save for my Africa volunteer vacation in November 2015 (estimated costs: $4000)
  • Pay off half of my car loan (4/1/14 loan amount: $13.104.20; End 2015 Goal: $6000)
  • Contribute the maximum percent of my salary to receive a company match in my 403b
  • Contribute monthly to my Roth IRA account
2016:
  • Save an additional $3100 in my emergency fund (Target end of 2016 total: $6600)
  • Pay off SallieMae loans using the snowball method (estimated remaining balance: $4300)
  • Continue to pay the minimum on all my student loans (estimated 2016 payments: $5100)
  • Contribute the maximum percent of my salary to receive a company match in my 403b
  • Contribute monthly to my Roth IRA account (ideally max out yearly contribution)
  • Pay for Lasik eye surgery
  • Start saving for future purchase needs (i.e. PhD studies, house, etc.)

My 2016 goals get a bit fuzzy because it’s hard to predict where I’ll be in 3 years. My primary career goal is to work abroad a year through a public health fellowship or possibly teach English abroad before heading back for my PhD in 2017. Ultimately I would like a position that pays a decent living wage while overseas so I can stock pile money and continue to pay off my student loans, but I’m not sure what might happen in the job front.

As you can see, my major themes involve paying off student loan debt (you can read more about my plan to payoff $20,000 of student loans in 3 years HERE) and to contribute to my retirement accounts.

Note: I have also created a unique page above in the menu for this post so I continuously check in and make sure I’m on my path to financial freedom! 🙂

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)

April Challenge: Living on Food Stamps

AprilChallenge

No, I’m not actually living on food stamps or now called Supplemental Nutrition Assistance Program (SNAP). I do not qualify for food stamps or assistance nor would I utilize them unless I was in a bad situation and I had no other options. I believe that food stamps and any welfare assistance should be available to those that truly need the help to survive.

When I first began budgeting, I wasn’t sure what my monthly food budget should be. It’s just me (and well, my dog, but she has her own separate budget category although she likes to think I share my food with her). I estimated $300 for grocery, $80 combined for restaurants, coffee shops and bars. That seems like a lot of money for a single person. Now that I have a monthly car payment (you can read about my new car purchase experience HERE), I’m looking to cut back on my food expenses.

I did some research to determine how much the average American spends on food monthly. A 2012 Gallup Poll survey determined that the average American family spends about $151 a week for food. The survey also revealed that the average young adult (cough, cough… Me) spends about $173 a week in food. That means the average young adult spends about $692 in food a month! Yikes! I definitely know people who probably spend this amount or more in food for just themselves in a month.

I rarely eat out for food. I generally spend less than $350 a month in food. I rarely go out to dinner so my restaurant budget is normally $0. However, March was a busy and expensive month this year. My birthday was in March so I went out with a few friends, which obviously killed both my restaurant and bar budget. I also bribed my father with pizza and beer to come to the dealership with me to buy my car. It was $44 well spent I think. I almost always bring my lunch and snacks to work, but usually once a week I get tired of what I bring and grab lunch somewhere. I also stop at Starbucks a few times a month.

All those small purchases add up over a period of time! During my food budget research I discovered the United States Department of Agriculture (USDA)’s Official Food Plans: Cost of Food at Home at Four Levels reports. The USDA’s Center for Nutrition Policy and Promotion tracks each month what the average person spends on food and reports out the figures to the public. SNAP benefits for individuals and families are calculated using the “thrifty plan.” Although this site indicates how much you might qualify (for a single person you can get up to $189 a month). In January 2014, the average female aged 19-50 spent $37.90 a week on food using the “thrifty plan.”

For the month of April I am challenging myself to live on $37.90 a week on food. This would be the same allotted to me if I were to be on SNAP. I’m not allowed to go out to eat or stop at any coffee shops. The only exception is if I have to travel for work and cannot take food with me, which at this point I don’t think will be much of an issue. I am doing this challenge for two reasons: 1) I am trying to save money and to see if I can truly reduce my monthly food bill, and 2) I want to see what it is like to be on SNAP and if it’s possible to eat healthy. As a public health professional, I’m well aware of the major issue of having healthy food options at a low price. Most of the healthier options are too expensive for a family on SNAP and thus they buy cheap, processed food leading to obesity in the low-socioeconomic population.

I’m giving myself two rules:

  1. I can only spend $37.90 a week on food
  2. I’m allowed to use food that I have in my cupboards and freezer (this could be viewed as cheating but I’m going with it)

Each week I will check in with purchases, what I ate and how things went. I encourage you to try my April Challenge as well!

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: How I Plan to Pay Off $20,000 in 3 Years

thetruecostsofcollege

Last post I mentioned at the end that my plan is to pay off at least HALF of my student loan debt by 2017. Why 2017? Well, that is my target date for returning to graduate school to earn my PhD. Of course, opportunities may arise and my plans may change, but by end of 2017 I want half my student loan debt gone.

My student loan debt weighs on me heavily. Student loan debt isn’t bad debt to have. Creditors look at it as good debt and the investment in my education was well worth it. But, it makes me nervous. There are so many other things that I want to pursue in life and I feel like my student loan debt holds me back like a ball and chain.

If I continue to pay my loans monthly on the standard 10-year plan, I will pay all my loans off by the end of 2023. That’s about 9 years from today. I’ll be 36 by then. Yikes! My ultimate goal is to pay them off by 2020… three years earlier. Most people will probably debate me on this choice, but I do not want to have children until my student loans are paid off in full. Now, children are definitely not in my 5 year plan, and the outlook in the 10 year plan is so-so. Children are expensive and if I choose to have one then I want to make sure that I can afford the lifestyle that my future child deserves and I will be able to afford a portion of their future education.

Anyway, back to my plan of attack. Here is my student loan debt summary from my first post, The True Costs of College: My Student Loan Debt Story:

Undergrad Loans

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

Grad Loans

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

Total Debt

$      44,103.00

Remaining Balance

$      32,970.93

As you can see, I am nearly half way to paying off my undergrad student loans. My main goal is pay off half my student loans by 2017. Let’s break them down into small goals:

  • I want to pay off my entire undergraduate student loans before my return to grad school (remaining balance is about $11,000).
  • I will continue to pay the minimum on my Nelnet (grad loans) each month resulting in over $3400 in payments each year. In 3 years that should reduce those loans by about $10,000.

In the next 3 years I am looking to pay off about $20,000 of my total current student loan debt. That’s a big number! Yikes! How am I going to do this? There are several ways I can go about paying off my loans.

  • Snowball Debt Reduction – This plan is recommended by Dave Ramsey. He suggests paying off the smallest debt first to gain momentum. You first start by paying the minimum on all your debts except for the lowest debt where you contribute extra to pay that debt off first. Once that debt is paid off, you use the money you used to pay off the first debt to pay off the second lowest debt. This method continues until you are debt free!
  • Avalanche Debt Reduction – This plan is the opposite of the snowball effect. You pay off the debt with the highest interest rate first because you’ll save money in the long run. Put your debts in line from highest to lowest interest rate and begin paying off the highest interest rate debt first while paying the minimums on the remaining debts. Once the first debt is paid off, use that money to pay off the next highest interest rate debt until you’re debt free!
  • Debt Tsunami – This method was proposed by Man vs. Debt. This plan recommends you to pay off your debt in order of emotional impact. Same idea as above, but you pay your debt off based on your own ranking system. You can read more about it here: http://manvsdebt.com/debt-tsunami-the-ultimate-method-for-paying-off-debt/.
My Plan of Attack

I’ve played around with multiple plans of attack to see what best fits my needs. With a Google search I found an awesome debt reduction spreadsheet that you can download from Vertex42.com. I HIGHLY recommend it. It’s simple to use and you can play around with different debt reduction methods. The only downfall I found was you can only enter up to 10 debts. I entered all my loan balances with interest rates and let the spreadsheet work its magic. I changed the options from snowball to avalanche to custom to see what the interest rates over time would be. They all came within about $200 of each other. Before this spreadsheet I was drawn more towards the Snowball method because I am not a patient person. I want to see a return on my investment now and not years down the road (although I’m learning that in personal finance you have to be patient sometimes, especially with retirement investments).

A Glimpse at my Debt Reduction Spreadsheet
A Glimpse at my Debt Reduction Spreadsheet

With the snowball method I would pay about $7151 in interest, with the avalanche method I would pay about $6961 and with a custom ranking I would pay about $7076. I have decided to go with a custom ranking similar to the debt tsunami method because my focus is on paying off my SallieMae (undergrad loans).

I identified at least $100 a month I can use to pay off my student loans in addition to my normal monthly payments. My goal is to attack my $745 SallieMae loans first, with a target payoff date of September 2014 and January 2015 respectively. Then I will hit up my other undergrad loans from lowest to highest. My father has offered to give me additional money to put towards my student loans when we sell our family camp. I have no idea when or how much that might be, but when it happens I plan on applying it to my highest SallieMae loan.

This is my plan for now. Things may change, but I’m happy with plan going forward. I’m motivated to get this weight off my shoulders!

How are you paying off your student loans? Are you paying any additional money each month to pay them off faster? What method do you utilize?

In case you missed it:

The True Costs of College: My Student Loan Debt Story

The True Costs of College: Repayment Plans and My Story

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!