Money, Love, and Change

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photo credit: ArtemFinland

As the year comes to a close, it is always nice to take a look at the finances.  Although I love tracking our finances using Microsoft Money, the level of detail doesn’t always provide a clear look at the underlying picture.

For example, our net worth is approximately the same as last year, but this is due to losses in our retirement accounts, which I am not overly concerned about.  Since we are in our early 30’s, we make regular contributions and reallocate our holdings twice a year.  It’s pretty much on auto-pilot.

But what about our debt?  And our savings?  Are we doing better than last year?  Again, it is hard to tell with Microsoft Money.  I have all of my business accounts listed, as well as our credit card that we use to make our monthly purchases (and then pay off in full each month).  These accounts can give a skewed representation of our financial picture depending on the circumstances.

This is where Mint.com enters into the picture.  Basically, it allows you to track your financial accounts online.  This morning, I spent some time entering the login information for all of our accounts.  Then, I used the “hide” function to get rid of all the accounts that were causing “financial static”.  Now, when I log in, I can easily see the totals for the accounts which represent our true emergency savings, our credit card debt, and our student loan/mortgage debt.

As an added bonus, I am also able to quickly look at our credit cards that do not carry a balance to make sure that no mysterious charges have appeared.  Given our recent experience with this, this feature alone makes it worth taking a look at Mint.com.

I wouldn’t use Mint.com for making a budget or tracking our detailed spending – I have already spent too much time with Microsoft Money to tweak it to my liking, and our finances are tracked in the program from 1999.  But now I have another financial tool in my arsenal to help us keep focused on debt reduction, and I’m really excited!

Have you used Mint.com?  If so, what do you use it for?  Are you happy with your experience?

Our stimulus check arrived last week. I just transferred about $540 to our emergency fund to bring it up to $5000 again. This was our first Dave Ramsey goal that I talked about in a previous post.  So it’s not official yet (since technically the money isn’t in the account), but it’s in the process!

It feels great, but I will feel better about it once I have secured another part-time work-at-home job to bring in income over the summer (I currently tutor online, and the hours will be decreasing soon). I don’t want to have obtained our goal only to dip back into the emergency fund a couple of months later!

Next, I need to update our accounts to see what we can put towards our high-interest student loan.

What were your plans for your stimulus check? Did you follow through with your plans?

I feel like February and March kind of flew by.  I know that I have been sick, but I also feel like I have been busy.  The problem is that I am not sure exactly what I was busy with.  There’s all the daily things that have to do with life in general, but this is the first time in awhile where the fruits of my labor are not really tangible.

This is why I’ve decided that it is time to set some general goals for April.   It’s going to be more like a long list, but I need to start somewhere, so here goes!

1. Get taxes done.  I bet that I get this one done before the end of the month!
2. Figure out general game plan for the finances.
3. Get a job?!
4. Decide what do to about kid’s preschool.  This is kind of a big deal – it seems so weird to deal with this months ahead of time, but that’s life these days!
5. Blog development
   1. Get more on About Me page.
   2. Approach for Entrecard – I have some new ideas on this one.
   3. I really want to start reviewing some books and products (I’ve been really impressed with my kid’s Brio trains, for example).  I’m not really trying to sell anything, but would like to share some of my personal recommendations without being too forward.
   4. Get ahead on posts.  I really want to have some content written ahead of time so that I can post on a more regular schedule.
6.  Simplify more – we’re working hard on this one.  I really need to make more of an effort in the “getting rid of crap” department.  Our problem is that we want to recycle as much as possible (ie. sell on Ebay, get rid of on Freecycle, etc.), but these things take time and effort.  Time to buck up!
7. Spend some real quality time with family on the weekends – we’re not traveling this month (to my knowledge), and we’ve spent the past couple of weekends sick or just trying to catch up.  I want to make a little list of places we can go hiking in the local area, and maybe even go camping one weekend!

What are some of your goals for April?  Whether it is personal or professional, I think it is always good to be moving towards something.  When I finished school in January, such a large weight had been lifted from my shoulders.  I think that I deserved a little break, but now I need to regain some focus.

Have a wonderful weekend everyone!

Today, it’s time to focus on my student loans. I was very fortunate to not have to take out any loans for my graduate studies – a small but sufficient graduate stipend combined with my husband’s income helped us out.  However, I spent 5 years completing my undergraduate studies (I am a geek who did a triple major) and my last year was expensive. In total, my federal undergraduate student loans totaled roughly $15000, which included an unsubsidized loan for $1450. I also had to take out a private loan in my last year for $6000.

Even while in school, I have always paid the accrued interest on the unsubsidized loan and the private loan. There is a variable interest rate on the private loan, which is currently at 8.5%. The private loan is the first debt we want to get rid of, since it has the highest interest rate of all the debt we carry. We have considered transferring it to a credit card with a lower interest rate, but it is with the same company that we get our best balance transfer offers with, so it has not been eligible. Also, I have hesitated to transfer this loan since it would be forgiven if I died (isn’t that nice?).

In August of 2003, while consolidating my husband’s student loans, we decided to lock in the low (3.5%) interest rate with my federal student loans as well. Even though I was still a full-time graduate student on deferment, the federal student loan program (Direct Loan Servicing, if you’re interested) allowed for consolidation of my federal loans.

I have been paying down the private loan since starting graduate school in 1999, even if it has meant just paying the accrued interest. The balance on the private loan is currently $3570, and the monthly payments are around $50. I just started paying my federal loans in October (I am not sure why, but the government thinks I graduated last May. Rather than deal with the craptastic registrar’s office to resolve this issue, I decided to start paying them a couple of months early.) I owe $14668, and the monthly payments are just under $150.

Without taking into consideration the opportunity cost of spending 9 years in graduate school (instead of at a real job) as well as some intangibles (for example, you can’t put a price on the sanity I have lost over the past decade), our education has cost us roughly $45000. Certainly this is nothing to take lightly, but it is also not as expensive as some luxury vehicles. Neither of us had family who helped us out financially, so I think that overall we did pretty well.

In closing, here’s our current picture:

student loans at 3.5%: $25,156 (payment per month of $230)

student loans at 8.5%: $ 3,570 (payment per month of $50)

totals:                             $28,726 (obligations per month at $280)

I thought that student loans would be a good place to start documenting our financial journey – as I am bringing my graduate school career to a close, I thought it would be a good idea to take a look back at what our education cost us.

Today, I will start with my husband’s student loans. Starting off, he had federal undergraduate student loans totaling roughly $18400 (these days, that’s not bad for 4 years at a private college!) which he began paying in September of 2000. In September of 2002, he went to an accredited school for massage therapy, and took out another federal loan for $5800 to help cover the tuition. In August of 2003, at the advice of a friend, we consolidated his undergraduate student loans (which had gone from $18400 to $13000) with his loan from massage school. We owe this friend a big thanks, as we locked in a 3.5% interest rate.

We currently owe $10488 on this account.  Our minimum monthly payment is $176 (on the standard repayment plan), and we used to make $200 payments.  We are currently making the minimum payment so that we can use the extra money for higher interest rate debts, and have 67 payments left to make.  Other than the mortgage and a credit card that we use for monthly expenses and then pay in full each month, this is the only debt that my husband carries in his name.

I often think about whether or not to continue to pay down this debt.  I know that we may be able to defer payments (while interest accumulates) or take a different repayment plan with lower monthly payments, but we don’t want to be sending our child off to college and still be paying our own loans.  Also, there is the psychological aspect of having this debt paid off.  On the other hand, the money we are using to pay off this debt could be doing more for us, even in something as safe as a high-interest checking account.  Decisions, decisions…