I’ve had some major setbacks on the budget.
To start with, I had to get my car inspected. I had budgeted the money to do so, but what I didn’t know was that there was metal sticking out of my tires. Fortunately, I hadn’t made my extra payments yet from my debt snowball, so i was able to get four tires for the car without having to get into the EF.
But then I developed an infection in my tooth. The whole side of my face swelled up, and I was in misery.
My mother in law works at a dentist office and had the dentist call in a prescription for some antibiotics. But the scrip still ended up costing over $100.00
So now I’m broke. I ended up almost $100.00 overdrawn, which i covered from the EF. I have left some change in my car and a couple of dollars in cash. But tomorrow is pay day, so it’s all good.
Someone remind me that this will be worth it one day. I’m tired of being broke.
We’ve all seen it before countless times. A person decides to rid themself of their debt, gets a budget all set up, makes a good start, blogs about it, and within a month or two, disappears from the blogosphere. The presumption, of course, is that the person found out what kind of sacrifice that it would take to get rid of the debt and decided not to follow through. That the sacrifice now was judged not worth the rewards later in life. Or of course, that the person just “didn’t have what it takes” to get out of debt.
I’m pleased to say that this is NOT what happened to me. While I did set up a debt blog and made a pretty good start at getting rid of the debt for a month and a half and then disappeared from the blogosphere entirely, I did not stop paying off the debt. In fact, in the three months since I’ve blogged, I’ve paid off just over six thousand dollars in debt, all the while incurring zero new debt. I paid off my Fry’s card, and canceled the account. BofA, too, is paid off. I haven’t canceled it yet, because even after these months, I am still weighing the pro’s and con’s of balance transfers to save interest. But when in doubt, leave well enough alone. So the BofA account sits with a zero balance. The student loans are down to just over four thousand dollars remaining, which is on track to be paid off at or about Halloween. The only setback is the usurious interest rate that the Air Conditioner finance is charging, which accrued during the deferral and the balance is now higher than when it started. This, however is the highest that it should ever be, and it will eventually be gone, too.
Since January of this year, I’ve paid off over seven and a half thousand dollars in debt, and I’m still as excited about it as I ever was.
I just had gotten a bit burned out with blogging is all.
I’ve kept a blog for quite a few years in one place or another, and face it, it can be hard work. Sometimes the rewards for keeping a blog are less than the effort involved. And sometimes we just don’t have that much free time. Or sometimes blogging is just hard work.
But I’m back for a while. I hope you enjoy my blog, if there is anyone who still checks it after three months of inactivity.
I added a link on my right sidebar if anyone ever wants to email me.
Thanks, FranticWoman for pointing out that I had neglected to do so.
Right now I have two things in the works.
The first is that I intend to take a 1.99% cash advance on the BofA Visa card to pay off my student loans. This will save me money in interest over the course of the payoff, and it will ensure that Sallie Mae stays off my back. In addition, it will move the $850/mo that I am currently paying Sallie Mae over to may debt snowball, less the new BofA payment.
The second thing that I intend is to use my income tax refund to drastically pay down the Air Conditioner finance. The income tax check is due on the 19th, and payday is on the 21st. Between the two of them, I can knock $5k off the AC.
But then I started thinking….
If I transfer the Sallie Mae onto the Visa, the outstanding Visa Balance of somewhere around $2000 will still be there, and because of the overall low interest rate (1.99%) on the transfer, I would want to hold that debt until toward the end of my debt payoff. But that would mean that I would be paying the 18% interest on the $2000 the whole time.
Wouldn’t it be better to use the income tax check to pay off the BofA account and then when I transfer the money from BofA to Sallie Mae, use a “convenience” check to simply take it in cash, and add $2000 back onto the amount to pay on the AC? This would have the net effect of transferring $2k from the AC to the Visa without any additional transfer fees. In effect, this would be the same as if I were to have called BofA and they agreed to lower the interest rate on the outstanding balance down to 1.99%.
The only difference is that the student loans will be getting another payment on the 21st, so the balance would have dropped somewhat and I wouldn’t be able to use that payment on my debt snowball for that payday (in a sense). The AC people would still be getting $5k and the student loans will be transferred. The balance on the Visa would not have gone up any higher than if I were to simply pay it off today. The only real longterm difference is the interest rate on the outstanding balance.
Damn, I’m good.
I’ll be going to work for about four hours today. There’s a supplemental training class available for anyone who wants to take it. It is supposed to teach you how you should react if a psychotic patient in the hospital attacks you. As I was signing up for it, my friend asked me what it was about. “It’s about four hours of extra work,” I said.
At fifty bucks an hour, it’s about two hundred dollars. Or One-fifty after taxes. All that for sitting in a chair and listening to the person say, “Try not to get hit.”
Next week there is another four hour thing at work, too. It is where you have to go in every year and demonstrate that you know how to use all of the machines that you have been using for the past year. It’s about two hundred dollars, too.
Geez, I can’t wait until this debt is paid off.
I’ve been working quite a bit lately. But now I’m off. Or at least mostly off. I have to go in for a few hours on Tuesday, but after that, I’m off until Friday night. And although it helps the money, it is pretty boring to write about on a blog.
I’ve been playing around with the numbers a bit lately though. I’m wondering if I should pay off the BofA account entirely when my income tax refund comes in next week and then pull the money back out on a balance transfer when I am paying down the AC unit. That way, for the same transfer fee as I will use to transfer the student loans around, I can eliminate the interest that I would have to pay on the current BofA balance, without increasing the amount owed.
Other than that, the new student loan balance posted to my account and I updated the sidebar.
Besides that, the wife has a dentist appointment in the morning. I think she lost a filling.
And now I’m going back to bed. I’ve been working too much lately and I’m just plain tired.
It seems that I’m not the only one that BofA increased the rate on. I saw an article here that says that BofA is raising people’s rates all over the country. It seems that they may have changed their standards internally, but they are remaining quiet about the whole thing. A common theme seems to be that people who have a balance higher than a certain percentage of their limit are getting enormous rate increases, even when their credit score remains unchanged and they pay all of their bills on time.
I don’t see how this is going to help their bottom line in the long run. They certainly prompted me to pay them off faster, and all of their income from me comes from the interest that I pay. By raising the interest rate to usurious levels, they end up with nothing.
Unless of course they know something that nobody else knows. Are they trying to ditch what they perceive as their worst customers in order to make some sort of play in the near future as the Fed keeps dropping the rate?
Somehow I doubt it.
OK. I’ve finished all of my debt payments for this paycheck and I have the final results.
The first thing that I did was to replenish the EF from the $100 that I moved to checking to cover the front door repairs. Actually, I later moved another hundred over, just to be safe in case something auto-posted to my account. I didn’t want anything to bounce, so I parked an extra hundred dollars there as a buffer. I plan to put an extra hundred in the account sometime in the near future to keep a permanent buffer there.
But anyway, I brought my EF back up to a thousand dollars.
After that I made all of my minimum payments, and something bad happened. Something deferred posted to a CC and it raised my balance to higher than I started. So I actually am moving backward in my debt payoff. I now owe almost two hundred dollars higher than when I began. And that’s a bad feeling. The other thing that added to it is the transfer fees from moving the BofA account money around.
I’m good with it though. In the long run it will work out better this way, but in the short term I haven’t made any progress as far as the numbers are concerned. In effect, I bought the interest rate down on that account, but I will make out better as time passes.
Then I paid my car note. My balance has now broke through the nine thousand dollar mark. It may go back up through the nine thousand dollar mark over the course of the month though, as the monthly interest is calculated and added to the account, but as of right now, the payoff for my car is less than nine thousand.
After that I sat for a very long time and debated. I can pay off the student loans with the BofA account if I want to. But I also have a very nasty Air Conditioner payment coming out of six month deferment this month. If I don’t pay it off this month it will post the accrued interest and that’s about an extra five hundred dollars. So if I wanted, I could pay off the AC instead, and continue to pay the student loans with the Tax Refund Check and pay Sallie Mae off in the next couple of months. It was a very hard decision to make.
In the end, I decided to take the hit from the AC people and pay off Sallie Mae. It’s a five hundred dollar decision, and I didn’t take it lightly. But in the end it came down to cash flow. If I pay off the AC with the BofA, I will be adding a BofA payment to my already excessive student loan payment. If I pay off the student loans, I will be adding a payment for the AC, plus accrued interest, in addition to the BofA payment, but I will be losing a monthly payment of $888.00
I will still come out with a greater monthly payment in order to pay off the AC and the BofA in just a few months. Well, actually, I wouldn’t pay off the BofA that fast, because it will be at a low interest rate, so I will pay something else off instead. But I will pay off the AC with the accrued interest, by the end of March or so. It may be the first payday of April though. I haven’t done the math yet. But if something were to happen in the meantime, I would like to have the available cashflow to handle it. So even though from a strictly mathematical perspective it doesn’t make sense to pay off the student loans first, from a security standpoint, it makes a lot more sense. And that doesn’t even take into account that I really hate Sallie Mae. So in the end, I will take the accrued interest hit and get rid of Sallie Mae. Other people may have done it another way, but I’m satisfied with my decision at this point.
And that leaves me about $750 after taking out for living expenses to pay on my debt snowball. Valentines Day is coming up in a week, so I want to keep out a couple of hundred dollars to keep my wife for another year. So I want to send off about $550 to pay off debt. And this is where the decision making got very easy.
I really like Home Depot. I shop there for most of my home improvement supplies. When I needed a doorknob last week, that’s where I went. They have such a wonderful selection, great prices, and helpful sales people. It’s a great store.
But it’s a bad debt.
Home Depot:
Beginning Balance: $502.23
Today’s Payment: $502.23
New Balance: ZERO
Goodbye home depot. I appreciate you being there when I needed some emergency repairs. But from now on I will be paying cash.
(I also sent in my very last payment to Fry’s Electronics to cover the interest that had accrued prior to my final payment last time.)
So then I updated my sidebar, and as I expected, my CC balance has gone UP. That’s not the direction that it is supposed to be going. But that’s what happens if you are stupid enough to choose a deferred payment. But nevertheless, I have one less CC and I can pick myself up and dust myself off easy enough. The good news is that my overall debt balance is still lower than when I started, and it will go down even further next week when the payment that is auto-posted to the student loans credits to my account. But it sure will look funny when I transfer the student loans to the credit card and the CC balance is $7,600 more than when I started.
Next on the agenda is “Little Shopping” where I will get the small food items that need to be replenished in between the “Big Shopping” days. We need some bread, cereal, and little items like that. I don’t expect it to be too bad.
It’s payday today. I’ve been working on the bills for about three hours so far this morning.
It really is a roller coaster, all of this bill paying. I see myself making progress in one area and being set back in others.
I spent a lot of time today going over balances and interest rates. Making plans for which bill will be paid off when. Making tough choices.
I’m figuring out that there isn’t always a right answer. Sometimes it is simply a matter of making a decision and sticking with it. But overall, I am pretty satisfied with how it is going. This blog will be a month old this week (on the 10th) and I am glad to just be better organized than I was before. But I can see that I have a long way to go. A lot of my problem is that I like to pay my bills manually, online every month. This forces me to look at them. Sometimes I’ll spend ten or fifteen minutes on each one, looking it over and seeing where did each charge come from, what I may be able to do to decrease future charges, and wondering how I could have been so stupid in the first place. Nevertheless, I’ve done my budget for the next two weeks and I will be posting my progress (or lack thereof) shortly.
BofA has changed its mind. Now they love me after all.
It’s amazing how when you drop your balance down a month away from zero they suddenly take interest. Was it really only a week or two ago that they decided that I was only good for 18% interest? Ahhh, but now my balance has dropped by over $6k they love me again. I got a letter in the mail from them today with the cash advance checks included. If I use the checks, the amount I use them on is 1.99% interest until Jan, 09. Even if I make them out to Cash.
That means that I could pay off my Student Loans with them, effectively freeing up about $600 per month in extra Snowball Ammunition. That means that I could throw a SmackDown at the Air Conditioner with my Income Tax Refund, followed by a thirty day payoff (or thereabout).
I can only see two problems with this idea though:
1) The proportion of debt to balance would be about 90% on that card, and it would hurt my credit rating until I brought it down.
2) The balance that is already on this card would be paid off after the 1.99% portion, so I would be stuck with the interest on it every month, although it only works out to about 20-30 dollars per month for it.
and potentially, 3) If I were to be late on a payment the entire balance would go up to the current 18% rate.
The benefits include: 1) Adding an immediate $850 per month to my debt snowball, minus the new payment to BofA (rough estimate $250 per month) for a net increase of about $600 per month added to my debt snowball.
and 2)Getting rid of Sallie Mae once and for all. To me, Sallie Mae is one step under the IRS, because if you should ever default, they can put a hold on your state license, which I need to work. To be honest, I would rather pay a higher interest rate to be rid of dealing with her. But in this case it is much lower than what I was paying her, so I still come out ahead.
Neutral is: 1) The balance transfer fee is $90 maximum, but the monthly debt interest payment to her is over $100. This not only neutralizes the balance transfer fee, but also the interest that I would have to continue paying on the current BofA balance.
I believe that this is really a winning situation for me, and I intend to initiate the cash into my bank account tomorrow, and send in a giant payoff on Monday or Tuesday, whenever my current Sallie Mae balance posts to my account.
That is, unless someone on here can explain why this would be a bad idea to do. I don’t really see a downside to it though.
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