Tag Archives: salliemae

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

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

Here are my professional and personal goals for 2014:

Professional:

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

Personal:

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

Financial Update:

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

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

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!