Tag Archives: personal finance

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! 🙂

 

Frugal Fridays: I’m a Hustler Baby!

frugalfridays

I’m a hustler baby,

I just want you to know,

It ain’t where I been,

But where I’m bout to go, (top of the world!)

-Jay-Z, “I Just Wanna Love U (Give It to Me)

Okay, I’m not a hustler in the way you may be thinking. I’m definitely not a pimp or drug-dealer, so please don’t start those rumors!

The Dictionary defines a hustler as an aggressively enterprising person; a go getter. Or a prostitute. I’m definitely NOT a prostitute.

In the personal finance blogging world, we call ourselves side hustlers. I’m a proud side hustler. A side hustler is someone who makes money on the side by doing a variety of things, such as blogging, virtual assisting, mystery shopping, freelance writing, or anything else.

There are a slew of awesome personal finance bloggers out there in the interwebs that describe their side hustles. The beauty of side hustling is that you can do anything that you set your mind to, although I would hope that you would avoid illegal activities!

I first got serious about side hustling in January. This past fall I sat down and took a hard look at my financial landscape. I added up all my debt and all my assets and created my first real monthly budget. I spent some time figuring out a 5 and 10-year plan on where I wanted to be in life both personally, professionally, and financially. I just started a new job with a much higher salary than my previous job. But, my monthly student loan payments more than doubled since my graduate loans came out of there grace period.

Having a storm cloud of over $35,000 of student loan debt hanging over my head scared the crap out of me. I couldn’t find an umbrella big enough to keep me dry. I couldn’t ask for a raise. I already cut back on the extras in my budget to make extra loan payments. I had just started reading a lot of personal finance blogs and discovered side hustling. I was sold.

My Side Hustles

  1. Teach Spin Classes – Since January I have been teaching spin classes at both Zone 3 Fitness and The Bay Club. Since I’m both a personal trainer and certified triathlon and cycling coach, this was a perfect hustle for me. I love it because I get to kick people’s butt in class and also kick my own during class. The money I make teaching classes goes directly to making extra payments on my SallieMae student loans.
  2. Personal Training & Triathlon Coach – I wouldn’t necessarily call this a side hustle because in actuality it is my business. I train several clients in their homes and also coach several athletes in endurance sports. I’m putting this in here because side hustles can be created from things you are passionate about and are good at. I love fitness and triathlons and thus I became a coach and trainer to share my love of the sport and living a healthy life and hopefully changing lives while doing it. And, of course, if you’re looking for a trainer or coach checkout my website – Big Sky Multisport Coaching & Personal Training.
  3. Freelance Writing – I love writing. I’ve always loved writing from an early age and would write stories all day long if I could – especially if it was about horses. I have two blogs myself (I don’t currently make money on either of my blogs, but some people make money with their blogs) and I dabble in freelance writing. I am a staff writer at OneSmartDollar.com and hopefully will be publishing some travel posts on a couple of sites in the very near future. I don’t make a ton of money doing freelance writing at the moment, but I love it and will continue doing it to help develop my writing skills, share my story, and make a few extra bucks.
  4. Selling Stuff on Craigslist/eBay/Amazon/Etc. – This past fall I had to buy a new wardrobe for my new professional-attire job. When I buy new clothes I always try to make an enough to go through my closet and get rid of the clothing that I haven’t worn in a long time. I brought clothes to the consignment shop, sold some online, and then donated the rest. I went through my room and house and also sold things on Craigslist and eBay that I no longer used. I sold an old cycling trainer and old GPS running watch online. I am also planning on selling my triathlon bike at the end of the season in prep for returning to grad school in the near future. So heads up if anyone is looking for a sweet triathlon bike with a power-meter!
  5. Surveys – I fill out online surveys to earn airline miles. I’m not actually making real money doing these, but I count it as a side hustle because those miles count towards my mileage award balances that I can then use to earn free plane tickets. Thus, saving money!

Those are things I do to make an extra $200-$500 a month on top of my monthly salary from my full-time job. All the extra money I make I put towards paying off my student loan debt faster and also stuff into my travel savings account for upcoming trips I have planned.

My advice for people is to look for opportunities to make a few extra bucks doing something you love. You can always sell your junk too. Remember, one man’s trash is another man’s treasure. Making extra money has allowed me to reach my financial goals quicker than I would if I just stuck to my budget based on my monthly salary income. I’m working to reaching the top of the world, because I’m a hustler baby! 😉

April Challenge: Living on Food Stamps Week 3

AprilChallenge

I just finished week 3 of my April Challenge. It’s getting harder! I’m hungry… like all the freaking time! I can tell you now, this week (April 20th – April 26th) is my last week. It will mark 4 weeks. I was originally thinking of extending it to 5 weeks since April 30th ends on a Wednesday. However, with my first triathlon on May 3rd, I would like to be properly fueled.

Week 3 groceries from Trader Joe's
Week 3 groceries from Trader Joe’s

This week’s grocery haul from Trader Joe’s:

  • TJ Double Crème French Brie – $3.91
  • 2 cartons of Organic Plain Yogurt – $5.98
  • TJ Gluten-Free Granola – $3.49
  • Demi Baguette – $1.19
  • Frozen Berry Medley – $2.99
  • Canned Chicken – $2.99
  • TJ’s Spring Mixed Greens – $1.99
  • Baby Spinach – $1.99
  • Avocado – $1.39
  • 3 Organic Granny Smith Apples – $2.67
  • Brown Rice Tortillas – $3.49
The evidence (minus my missing Hannaford receipt)
The evidence (minus my missing Hannaford receipt)

The total rang up as $32.08. I also spent an additional $8.37 at Hannafords. I can’t find the receipt and honestly, I have no clue what I bought. Wednesday I had to buy lunch due to a work meeting in Augusta. I had an Asian chicken salad from the cafeteria and chips for a total of $5.18. Tuesday we had a work lunch meeting. My boss bought us Portland House of Pizza. I do not like PHOPs pizza, but I was so hungry that I ate several pieces! I’m surprised that I didn’t bite someone’s hand off either. I spent a grand total of $45.63 (including my work lunch) on food during week three of my living on SNAP challenge.

I’m quickly losing steam during this challenge. I’m hungry. Living on an extreme food budget and being a very active athlete does not mix well. You’re hungry all the time! Certainly I could eat pasta and bread none stop, but I’m not a huge fan of a lot of carbs (with the exception of vegetables, fruits, and legumes) in my diet. Adequate protein is tough to consume on a regular basis living on SNAP. For my active lifestyle and my current body weight, I should be consuming about 105g of protein a day (based on 0.8 grams per pound of body weight). I’m lucky if I’m currently eating half that! My main protein staples have been beans, yogurt, canned chicken, and peanut butter.

A sample of week 3 lunches
A sample of week 3 lunches

Fruits and vegetables have been limited as well. This week I did spend more on greens to get into my diet. I miss big salads at lunch, but fresh vegetables are expensive. When you can only spend $37.90 on a food a week, you have to be creative and pick the biggest bang for your buck, especially if you want to feel full after a meal.

Next week I’ll summarize my last week of my April Challenge and expand more on my findings and feelings about eating on the cheap.

 

In case you missed the previous weekly recaps:

April Challenge: Living on Food Stamps Week One

April Challenge: Living on Food Stamps Week Two

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! 🙂

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: 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: 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?