My husband and I had an extensive conversation yesterday regarding the status of our debts, income, and what our plans are in the future, as it applies to finances. I told him that we're basically treading water; for every $1000 I pay off in a month, we charge $1000 more. I told him that I want to go to a cash based budget until we're able to pay off our credit card debt so we can better manage how much we're spending.
This will be a marked change in our spending habits, as he and I have pretty much used credit cards exclusively since we moved in together. We've used cards that offered cash back awards for all of our spending, collecting the cash back incentive, but slowly increasing our debt load as we went along. One of my credit cards offers 1% back, deposited into a savings account that pays 10% interest, and it has a low interest rate too. It is through my credit union and I love my credit union. If we were using these cards responsibly, it would be a great set up. The problem is that we're not using the cards responsibly. We're carrying a balance from month to month, therefore paying interest on this card every month. You would think this is why I'm abandoning cards. It's not.
Instead, I am abandoning credit cards because of my recent dealings with Discover Card.
A little back story; last year I decided that we were going to pay off our credit cards. In order to do this, I completed a couple of balance transfers to get the bulk of our debt onto a couple of 0% interest offers. One of these balance transfers was to Discover Card, which offered 0% interest for 15 months on balance transfers. I calculated out the necessary payments to pay off the balance in 15 months and on we went. In November, I decided to purchase my husbands Christmas gift online. Because Discover Card offered 5% cash back for online purchases, I decided to use my Discover Card for this item and then immediately pay it off the following month. In the paperwork I received with my card, there was a statement regarding payments above the minimum amount that basically said payments would be applied to balances with the highest interest rate first.
And then there was one little line that I overlooked. It said, "In a way that is most advantageous to us."
In January, I paid my entire minimum payment plus extra, enough to cover my minimum payment and the amount of the gift I'd purchased my husband. When I received my statement at the end of the month, it showed that I had been charged interest on $300+ worth of purchases. I emailed the company asking why and they said that the purchases began accruing interest the day I made them, not at the end of the billing cycle, since I already had a balance on the account.
Fine.
I paid additional in February to pay not only my minimum payment, but also whatever outstanding balance I had on my account from January .... basically covering the interest so I was not charged anymore interest on my interest.
On Friday, I received my Discover Card statement for February with an interest charge of $0.50 and the description "Minimum Interest Charge".
I flew into a rage. I have more than paid off the charge from December and they continued to charge me interest. I e-mail Discover through the link on my account page and was basically told that once you make a charge when you have an outstanding balance transfer, you will pay the minimum interest charge of $0.50 for the entire duration of your balance transfer. It doesn't matter that I have more than paid it off, that I've paid more than the minimum every month since the balance transfer occurred, or that my purchase balance is the highest interest rate on my account. Discover Card maintained a purchase balance of $1.56 so they could continue to charge me interest on a purchase that has long since been paid off, and since they charge a minimum of $0.50 per statement, that will be added to my account every month until I pay off the balance transfer.
Needless to say, my relationship with Discover Card will be ending once the balance transfer is paid off. Although I was assured that I won't see an interest charge for the duration of the balance transfer if I don't use the card for additional purchases, the shadiness of the business practice has soured my opinion of Discover Card as a company.
Monday, March 3, 2014
Thursday, January 2, 2014
New Year, Same Journey
I am pretty terrible at keeping up with this blogging thing. I happened to come across a link to it while posting elsewhere and thought I'd come write an update as to where we are as we enter 2014. The sad fact is that while I feel like we're making progress, our total debt has stayed pretty stagnant over the years. Actually, we have more debt now than we did when we started this journey in 2010. On a positive note though, we have a game plan to get us through this year and it's pretty solid.
We are starting 2014 with $199,678.70 in debt. We entered 2013 with $202,017.31, so we have seen a slight decrease. Based on our payoff schedule, we'll be at $160,717.99 at the end of 2014. This will pay off all of our credit cards except for one, which is the one we use for day to day purchases. It gives us 1% cashback into a high interest savings account, and once the rest of our debt is paid off, it will be easy to pay that card off in a month or two. or May 2015 at the latest.
I'd like to take stock of what I did in 2013, since the numbers do not reflect success at all.
As always, the biggest obstical I face in paying off our debt is my husband's belief that we can't do it. He feels like we've been talking about paying off debt for so long that it's all talk, that nothing will ever change, that it's a pipe dream. Even when I show him the payoff scheduled with cold, hard dates, he still thinks that I'm living in a dream world and that it will never happen. We are averaging more than $1500 a month in credit card payments this year, in an effort to pay them off quickly. That's on top of paying $620 a month for our cars, $800 a month for our mortgage, $118 a month on my student loan, and even more for our utilities and insurance. Getting that money back into our bank account in 2015.... I can't wait. I just can't wait.
We are starting 2014 with $199,678.70 in debt. We entered 2013 with $202,017.31, so we have seen a slight decrease. Based on our payoff schedule, we'll be at $160,717.99 at the end of 2014. This will pay off all of our credit cards except for one, which is the one we use for day to day purchases. It gives us 1% cashback into a high interest savings account, and once the rest of our debt is paid off, it will be easy to pay that card off in a month or two. or May 2015 at the latest.
I'd like to take stock of what I did in 2013, since the numbers do not reflect success at all.
- I paid off my husband's Best Buy credit card. We did use it for Christmas, but it will be paid off in a few months. We only used it for Christmas because of the 0% interest for 18 months. It will be paid off before 18 months. Payments have already been scheduled to accomplish this.
- We paid off the Target credit card, which charges over 18% interest. We used this for purchases over Christmas, because it gave us free shipping and 5% off the purchases. It will be paid off this month.
- We paid off my husband's Credit Union card in December 2012, entering 2013 with a $0 balance.
- I transferred higher interest balances to 0% interest cards; one 0% for 12 months, the other for 15 months. The 12 month card will be paid off in October and the 15 month card will be paid off next December.
- I paid off my Perkins Loan! This was done in December and was a little bit of a Christmas gift to myself. It was a small payment, but the interest rate was 5% and the loan was smallish after paying on it for the last eight years. I only paid it off two years early, but baby steps. It was very freeing to not have to pay that loan this month.
- January I will pay off our Target card from Christmas.
- February I will pay off our Home Depot card before it begins accruing interest.
- October I will pay off our Chase card.
- November I will pay off the Best Buy card from Christmas.
- December I will pay off the Discover Card.
- December I will pay off the 401k Loan I took out last year, three years early.
As always, the biggest obstical I face in paying off our debt is my husband's belief that we can't do it. He feels like we've been talking about paying off debt for so long that it's all talk, that nothing will ever change, that it's a pipe dream. Even when I show him the payoff scheduled with cold, hard dates, he still thinks that I'm living in a dream world and that it will never happen. We are averaging more than $1500 a month in credit card payments this year, in an effort to pay them off quickly. That's on top of paying $620 a month for our cars, $800 a month for our mortgage, $118 a month on my student loan, and even more for our utilities and insurance. Getting that money back into our bank account in 2015.... I can't wait. I just can't wait.
Wednesday, July 17, 2013
Juggling
I haven't written in a while. I have started writing several entries, but then gotten distracted and closed them out without saving.
I think the last time I wrote, I had just gotten a great promotion, and was excited for what that meant for our finances.Well, what it ended up meaning is that we had more money to spend on random things that popped up and not so much on our debt. We had to pay for a plumber to come out when we had water in our basement, then twice we had to have a heating and cooling company come out for our A/C. We also went on vacation in June, so that set us back too. Right now, we're pretty much where we were when I got this job because we just can't seem to stop spending.
I'm mostly writing tonight because I've been juggling our debt, trying to make it easier to pay it off. I told my husband that I want to really focus on paying debt down from now through the end of the year.
Everybody I work with was told last week that they're out of a job at the end of the year. I still have a job, but they're centralizing work in our company and next year could be a different story. I'd rather get us in a place that if I lost my job next year, we wouldn't be struggling to stay afloat. My husband has also told me that he's not sure how much longer he's going to be able to continue to do his current job. It is physically demanding and 20+ years of the same type of work has left him feeling physically broken down. I dread the day that he calls and tells me that he can no longer work. He's already hurt his back this year.
So back to me juggling, we have a lot of credit card debt. We can't seem to stop spending, and really, the only way we were able to pay off a huge chunk of debt earlier this year was by having the debt on it's own credit card with a 0% balance transfer rate, so now that we've paid that off, I'm transferring more balances. I actually applied for another credit card, the Chase Slate card, for their 0% balance transfer offer and transferred part of my balances there. I'm also planning to transfer my balance on my 7.99% credit card to a 0% balance transfer card, although it has a 3% balance transfer fee, it still saves me over $900 in the 18 months that it's 0% interest. I'm hoping that by isolating this debt, and moving towards a more cash based budget, we'll be able to pay off all of our existing credit card debt by time the 0% offers expire.
I'm starting to feel a lot of anxiety because I'm having to do so much juggling. I talk to my husband constantly about what we need to do to get out of debt, but he feels like since we've been talking about it constantly for years and not actually gotten anywhere, that it's never going to work. I feel like as long as he and I are not on the same page, it's not going to work. It's very frustrating to be on different pages when it come to finances with my husband because I feel like we're in a canoe and rowing in opposite directions. I know it's going to be hard to change our spending habits; I love to go out to eat and he loves to buy comic books and we both like to randomly go shopping on the weekends to fight boredom. It's hard to change those habits when we've done them for so long, but I can't imagine what it would be like to lose my job and just be on a sinking ship. We'd lose everything if we don't get stuff paid off.
Anyway, I just wanted to give a brief recap. I'm going to wait until all of my balance transfers go through, and then take a look at what it's going to take to pay all of this debt off.
I think the last time I wrote, I had just gotten a great promotion, and was excited for what that meant for our finances.Well, what it ended up meaning is that we had more money to spend on random things that popped up and not so much on our debt. We had to pay for a plumber to come out when we had water in our basement, then twice we had to have a heating and cooling company come out for our A/C. We also went on vacation in June, so that set us back too. Right now, we're pretty much where we were when I got this job because we just can't seem to stop spending.
I'm mostly writing tonight because I've been juggling our debt, trying to make it easier to pay it off. I told my husband that I want to really focus on paying debt down from now through the end of the year.
Everybody I work with was told last week that they're out of a job at the end of the year. I still have a job, but they're centralizing work in our company and next year could be a different story. I'd rather get us in a place that if I lost my job next year, we wouldn't be struggling to stay afloat. My husband has also told me that he's not sure how much longer he's going to be able to continue to do his current job. It is physically demanding and 20+ years of the same type of work has left him feeling physically broken down. I dread the day that he calls and tells me that he can no longer work. He's already hurt his back this year.
So back to me juggling, we have a lot of credit card debt. We can't seem to stop spending, and really, the only way we were able to pay off a huge chunk of debt earlier this year was by having the debt on it's own credit card with a 0% balance transfer rate, so now that we've paid that off, I'm transferring more balances. I actually applied for another credit card, the Chase Slate card, for their 0% balance transfer offer and transferred part of my balances there. I'm also planning to transfer my balance on my 7.99% credit card to a 0% balance transfer card, although it has a 3% balance transfer fee, it still saves me over $900 in the 18 months that it's 0% interest. I'm hoping that by isolating this debt, and moving towards a more cash based budget, we'll be able to pay off all of our existing credit card debt by time the 0% offers expire.
I'm starting to feel a lot of anxiety because I'm having to do so much juggling. I talk to my husband constantly about what we need to do to get out of debt, but he feels like since we've been talking about it constantly for years and not actually gotten anywhere, that it's never going to work. I feel like as long as he and I are not on the same page, it's not going to work. It's very frustrating to be on different pages when it come to finances with my husband because I feel like we're in a canoe and rowing in opposite directions. I know it's going to be hard to change our spending habits; I love to go out to eat and he loves to buy comic books and we both like to randomly go shopping on the weekends to fight boredom. It's hard to change those habits when we've done them for so long, but I can't imagine what it would be like to lose my job and just be on a sinking ship. We'd lose everything if we don't get stuff paid off.
Anyway, I just wanted to give a brief recap. I'm going to wait until all of my balance transfers go through, and then take a look at what it's going to take to pay all of this debt off.
Wednesday, December 19, 2012
A Step In an Amazing Direction
I have been horrible at keeping up with this blog lately, mostly because I do no good and nothing has really changed for the better. Maybe if I had kept up with it, I would show a little more restraint, but I haven't so here we are.
First, a little level setting. At a point earlier this year, our overall debt had decreased to $200,713.01. We had four credit cards with a combined balance of a little more than $27,000. We also had two car loans with a combined outstanding debt of $29,064, and my student loans with an outstanding balance of $39,766. We also had a mortgage loan of $104,678.
As of the end of November we had $202,346.77 in debt. It is more now, but I don't have actual totals at the moment. Of that debt, $29,227 was on credit cards, $26,934 was for cars, $39,645 was for student loans, and $106,539 was for our mortgage. So, our credit card debt went up more than $2000, our cars went down a little more than $2000, student loans stayed stagnant, and the mortgage debt actually went up as a result of our refinancing.
Clearly, this does not reflect well on my money management skills.
In addition to increased debt, we now carry balances on all of our credit cards. Not just balances, actually, high balances. Nearly maxed out and juggling the cards to avoid going over the limit or being declined for a purchase. It is mostly because of our Disney trip last month, and because of Christmas shopping this month (which we did spend significantly less this year than we have in years past), but also because we want what we want when we want it.
I had planned to pay my Discover Card off in March, when I received my performance bonus, by not using the card in the interim and paying more than the minimum payment every month. Instead, we use the Discover Card regularly and carry a high balance. I was juggling all of our finances, trying to figure out how we could pay the entire balance off before it starts accruing interest and not completely destroy ourselves financially. As more and more minimum payments started rolling in, the picture was actually pretty bleak, with me feeling like my only option would be to drain the kids savings accounts and my savings account to pay it. Even then, it was going to be tight.
In addition to the Discover Card, I had it all budgeted out how I was going to pay my Best Buy card off two months later, then my credit union credit card, and then my student loans. I was going to systematically pay off all of my debt by next summer by snowballing payments and going smallest balances first (with the exception of the Discover Card and Best Buy card because they both had promotional interest rates that were expiring). We would have paid off all of our credit cards by next July and one of our cars by the end of next year. We'd be saving for a house and probably able to handle two mortgages.
Except for that pesky problem of spending money. How are we ever going to get ahead when we're spending so much on credit card payments that we don't ever have any extra? But it never stopped us from spending the money anyway. I was starting to feel the walls closing in and feeling the panic that we weren't going to be able to pay our bills when we started paying interest on an $11,000 credit card.
And then today happened.
Today, I was offered a new job. I had applied for it at the beginning of November and hadn't heard anything before we went to Disney. I got back from our trip and had a voicemail inviting me to interview for the position. I interviewed last week and, because it was in my current office, got a feel for where they were headed in the hiring process. Even though the majority of this job was stuff I'd already been doing, I was one of two top candidates for the position. The other possessed a technical skillset that I lack, but I have my own technical skills and experience with the responsibilities of the role. I was on pins and needles waiting for a decision, and the longer it dragged out, the more convinced I became that they had decided to go with the other candidate. Instead, I was called into the hiring managers office this morning and offered the job, and a more substantial raise than I ever could have imagined.
I came home this evening and put the numbers into the paycheck calculator. The number that was spit back at me made me do a double take and I ran the numbers again. Nope, that was right. More than $400 extra. Per paycheck. Every two weeks. Over $800 more a month than I currently take home. I plugged the numbers into my budgeting spreadsheet (as savings, not spending money) and there it was... the answer to our downward spiral. With this influx of income, even if - if - we maintain the maximum balance on the Discover Card, we will have enough in savings by March to pay the entire balance, in full. After that, the other credit cards start falling off quickly The small balances disappear in a couple of months and the big balances will be gone by year end.
If we continue to budget based on my current salary, our credit card debt will be nonexistant by this time next year. If we don't spend the extra money on anything except debt payment. If we've survived this long, surely we can do it for another year. And then a year from now, we can just start socking money away in savings and maybe even investments. Maybe buy a house we don't hate. This promotion, doing something that I actually enjoy, and the raise that came with it just dramatically changed the path our lives were on. I can't wait for everything to start turning around. This might just be the boost we need to get ourselves under control.
First, a little level setting. At a point earlier this year, our overall debt had decreased to $200,713.01. We had four credit cards with a combined balance of a little more than $27,000. We also had two car loans with a combined outstanding debt of $29,064, and my student loans with an outstanding balance of $39,766. We also had a mortgage loan of $104,678.
As of the end of November we had $202,346.77 in debt. It is more now, but I don't have actual totals at the moment. Of that debt, $29,227 was on credit cards, $26,934 was for cars, $39,645 was for student loans, and $106,539 was for our mortgage. So, our credit card debt went up more than $2000, our cars went down a little more than $2000, student loans stayed stagnant, and the mortgage debt actually went up as a result of our refinancing.
Clearly, this does not reflect well on my money management skills.
In addition to increased debt, we now carry balances on all of our credit cards. Not just balances, actually, high balances. Nearly maxed out and juggling the cards to avoid going over the limit or being declined for a purchase. It is mostly because of our Disney trip last month, and because of Christmas shopping this month (which we did spend significantly less this year than we have in years past), but also because we want what we want when we want it.
I had planned to pay my Discover Card off in March, when I received my performance bonus, by not using the card in the interim and paying more than the minimum payment every month. Instead, we use the Discover Card regularly and carry a high balance. I was juggling all of our finances, trying to figure out how we could pay the entire balance off before it starts accruing interest and not completely destroy ourselves financially. As more and more minimum payments started rolling in, the picture was actually pretty bleak, with me feeling like my only option would be to drain the kids savings accounts and my savings account to pay it. Even then, it was going to be tight.
In addition to the Discover Card, I had it all budgeted out how I was going to pay my Best Buy card off two months later, then my credit union credit card, and then my student loans. I was going to systematically pay off all of my debt by next summer by snowballing payments and going smallest balances first (with the exception of the Discover Card and Best Buy card because they both had promotional interest rates that were expiring). We would have paid off all of our credit cards by next July and one of our cars by the end of next year. We'd be saving for a house and probably able to handle two mortgages.
Except for that pesky problem of spending money. How are we ever going to get ahead when we're spending so much on credit card payments that we don't ever have any extra? But it never stopped us from spending the money anyway. I was starting to feel the walls closing in and feeling the panic that we weren't going to be able to pay our bills when we started paying interest on an $11,000 credit card.
And then today happened.
Today, I was offered a new job. I had applied for it at the beginning of November and hadn't heard anything before we went to Disney. I got back from our trip and had a voicemail inviting me to interview for the position. I interviewed last week and, because it was in my current office, got a feel for where they were headed in the hiring process. Even though the majority of this job was stuff I'd already been doing, I was one of two top candidates for the position. The other possessed a technical skillset that I lack, but I have my own technical skills and experience with the responsibilities of the role. I was on pins and needles waiting for a decision, and the longer it dragged out, the more convinced I became that they had decided to go with the other candidate. Instead, I was called into the hiring managers office this morning and offered the job, and a more substantial raise than I ever could have imagined.
I came home this evening and put the numbers into the paycheck calculator. The number that was spit back at me made me do a double take and I ran the numbers again. Nope, that was right. More than $400 extra. Per paycheck. Every two weeks. Over $800 more a month than I currently take home. I plugged the numbers into my budgeting spreadsheet (as savings, not spending money) and there it was... the answer to our downward spiral. With this influx of income, even if - if - we maintain the maximum balance on the Discover Card, we will have enough in savings by March to pay the entire balance, in full. After that, the other credit cards start falling off quickly The small balances disappear in a couple of months and the big balances will be gone by year end.
If we continue to budget based on my current salary, our credit card debt will be nonexistant by this time next year. If we don't spend the extra money on anything except debt payment. If we've survived this long, surely we can do it for another year. And then a year from now, we can just start socking money away in savings and maybe even investments. Maybe buy a house we don't hate. This promotion, doing something that I actually enjoy, and the raise that came with it just dramatically changed the path our lives were on. I can't wait for everything to start turning around. This might just be the boost we need to get ourselves under control.
Wednesday, October 10, 2012
I Get Knocked Down.... Do I Get Up Again?
My husband and I lack self control. We can't stop spending money. We get ahead, we spend the money, we get back down.
We're going to Disney next month and I'm ridiculously excited about it, but we went overboard booking the hotel I wanted with the view that I wanted during the week that I wanted. But it came with a price tag that is a lot more than we've ever spent on a vacation. Yesterday was our last day to get a full refund on the price, so of course today, my employer decided to burst my bubble.
I budget. A lot. I have our bills mapped out through the next year. I always estimate a $20 biweekly increase in health insurance premiums during annual enrollment because, on average, that's what it's been. Last year, I think it went up $19. Today, I found out that our insurance is going up $37 per pay next year. In addition to that, because my husband is eligible for coverage through his employer, they are going to charge me $50 per pay as a surcharge because he is using my insurance coverage and not his own.
I have some massive, massive issues with this. First and foremost, my company blamed this surcharge on the Affordable Care Act (ACA), or "Obamacare" as it's been dubbed by the media and politicians. I whole-heartedly disagree. If the surcharge had anything to do with ACA, then it would have been implemented across the entire company. Which leads me to point number two...
This surcharge is only being assessed on employees whose spouses 1) work and 2) don't work for our company. So essentially my company is targeting those employees who have two incomes, one of which doesn't come from our company. No other segment of the company is facing this increase.
If the increase legitimately had anything to do with healthcare reform, it would have impacted everybody. Instead, I am left feeling like my company could care less about people and especially about families.
The increase, between increased premiums and the surcharge, will be taking 5% of my salary. 5% is a pretty substantial amount, especially when we have two incomes because we have to, not because it's a luxury. I will actually make less next year than I am this year because of this increase; the average raise in the spring is about 2%.
Our budget is stretched thin, literally down to pennies left after paying bills, through most of next year. I don't know how we're going to find an extra $87 every two weeks to pay for health care.
We're left with a couple of options, none of which are very desirable.
1) I keep my husband on my insurance. I pay an extra $87 every two weeks for his insurance coverage, which he has never used. Not once.
2) I drop my husband from my insurance and make him get his own. We pay two premiums, and are responsible for two deductibles if my husband ever has to seek out medical care. We have to juggle two different insurance companies, make sure that any doctor we choose accepts both companies. The list of reasons that this is an undesirable option goes on and on.
3) I drop my husband from my insurance and he stays uninsured, paying the tax for not maintaining coverage. In the event of catastrophic illness, we're screwed.
Clearly, none of these are attractive options. My company has put me and my family in a really bad position.
Today, I just feel like giving up. I'd be better off to quit my job and get Medicaid. I don't know why I try to get ahead when everything in the world is just trying to drag me down.
We're going to Disney next month and I'm ridiculously excited about it, but we went overboard booking the hotel I wanted with the view that I wanted during the week that I wanted. But it came with a price tag that is a lot more than we've ever spent on a vacation. Yesterday was our last day to get a full refund on the price, so of course today, my employer decided to burst my bubble.
I budget. A lot. I have our bills mapped out through the next year. I always estimate a $20 biweekly increase in health insurance premiums during annual enrollment because, on average, that's what it's been. Last year, I think it went up $19. Today, I found out that our insurance is going up $37 per pay next year. In addition to that, because my husband is eligible for coverage through his employer, they are going to charge me $50 per pay as a surcharge because he is using my insurance coverage and not his own.
I have some massive, massive issues with this. First and foremost, my company blamed this surcharge on the Affordable Care Act (ACA), or "Obamacare" as it's been dubbed by the media and politicians. I whole-heartedly disagree. If the surcharge had anything to do with ACA, then it would have been implemented across the entire company. Which leads me to point number two...
This surcharge is only being assessed on employees whose spouses 1) work and 2) don't work for our company. So essentially my company is targeting those employees who have two incomes, one of which doesn't come from our company. No other segment of the company is facing this increase.
If the increase legitimately had anything to do with healthcare reform, it would have impacted everybody. Instead, I am left feeling like my company could care less about people and especially about families.
The increase, between increased premiums and the surcharge, will be taking 5% of my salary. 5% is a pretty substantial amount, especially when we have two incomes because we have to, not because it's a luxury. I will actually make less next year than I am this year because of this increase; the average raise in the spring is about 2%.
Our budget is stretched thin, literally down to pennies left after paying bills, through most of next year. I don't know how we're going to find an extra $87 every two weeks to pay for health care.
We're left with a couple of options, none of which are very desirable.
1) I keep my husband on my insurance. I pay an extra $87 every two weeks for his insurance coverage, which he has never used. Not once.
2) I drop my husband from my insurance and make him get his own. We pay two premiums, and are responsible for two deductibles if my husband ever has to seek out medical care. We have to juggle two different insurance companies, make sure that any doctor we choose accepts both companies. The list of reasons that this is an undesirable option goes on and on.
3) I drop my husband from my insurance and he stays uninsured, paying the tax for not maintaining coverage. In the event of catastrophic illness, we're screwed.
Clearly, none of these are attractive options. My company has put me and my family in a really bad position.
Today, I just feel like giving up. I'd be better off to quit my job and get Medicaid. I don't know why I try to get ahead when everything in the world is just trying to drag me down.
Monday, July 23, 2012
July Update
I haven't gotten back to write like I keep telling myself that I'm going to. This month has been kind of crazy with everything that has been going on.
I did consolidate my student loans, and when I got the new loan amount, it looks like they did not apply my June payment. I contacted Mohela about it several weeks ago and did not get a response, so I have asked for a copy of my payment history in hopes that I can see actual amounts of my loans at the time of consolidation. I did not expect that Mohela would delete my loan history from their website as soon as the loan was consolidated, so I foolishly did not print off my summary sheet before the consolidation occurred. Direct Loan Servicing is no help because they weren't servicing the loan at that time and Mohela has been no help because they are unresponsive.
I ended up changing the repayment plan to the graduated repayment plan because it reduced my payments $60 a month and only added about $500 extra interest to the total cost of my loan. I plan to put the difference towards higher interest credit cards, which we are still on target to pay off next year. My husband also got a bonus in this paycheck, so that will help.
We are still waiting on our refund from the county auditor, from where they lowered the value of our house for 2010 and 2011. Based on approximate taxes for our value, we should be receiving about $500 or $600 back. The county said it would be approximately 60 days, but did not clarify whether it would be 60 days from the decision, or 60 days from the date they responded. Either way, I still have not seen the updated value reflected on their website and it's been about 90 days since the decision was made. I guess it's time to harrass them again. You know they would not be as understanding if I were late on my tax payments.
We're also still wrapped up in the nightmare that is refinancing our home with US Bank.
We applied for the refinance in April and were told that we would be under a 90 day ratelock, but that generally the refinances were processed within about 60 days. I received the application paperwork and returned it, along with all supplemental documents requested. A week or so later, I was told that, although I had submitted the signed paperwork to request a transcript of my previous two years tax returns and my previous two years W-2's, they now needed a copy of my actual tax return. I was angry. ANGRY. Because they hadn't requested these documents at the time we were applying, so I felt they were just delaying the refinance process, and because they already received the information from our tax transcripts, so I felt like they were... I don't know, trying to catch us in a lie? I'm not sure. I returned the tax returns anyway and they responded back that they needed all of the supporting pages. Um, why?? Like most normal individuals in the 21st century, I filed electronically, with documents that were provided to me electronically. I had already printed off the electronic copies of my tax returns and signed them, backdating them more than a year, and now I was trying to gather other supporting documents. US Bank seriously, SERIOUSLY needs to update their processes for modern technology.
Anyway, all of the documents were finally received by US Bank, it went through underwriting and was in scheduling when our area was hit by strong storms, bringing strong winds, hail, power outages, etc. A few days later, we got a call from US Bank that our refinance had been pulled back from scheduling because we were now being subjected to a driveby inspection to ensure that our home was still standing and had not been damaged. I was annoyed, but understood.
Last week, we got a phone call from an appraisal company wanting to schedule an appraisal. I was taken by surprise because we had been told two months ago that we would not need an appraisal because they were using automated values. I went ballistic. I called US Bank and our loan processor was out of the office for the week, I complained on their facebook page, I got ahold of a supervisor who told me it was their direction that everybody within the affected area had to have a full appraisal. The more I thought about it, the more angry I got, so I complained further about how we'd been jerked around with all of the additional paperwork after we started the application process and now, because of their incompetence we were going to be subjected to an appraisal that was going to cost us an additional $400 because they dragged the process out so long. I got another phone call from the supervisor indicating that the appraisal was required by Fannie Mae, who backs our mortgage. The thing is, I have a coworker who is refinancing with her loan held by Fannie Mae and she is not being subjected to an appraisal, so I think US Bank is full of it.
Anyway, the appraiser came out on Wednesday and was there for less than 10 minutes. The US Bank supervisor told me we needed to be at $88,000 for the value of our home. It came back at $85,000. She indicated that the difference in value did not impact our refinance, so we will be moving forward and closing next week. I will be glad to see the drop in payment, even though I know the majority of the drop is because we're going back to a 30 year loan. My hope is, with the way property values have been increasing in our neighborhood, we will get close to breaking even by next year. I don't mind taking a small loss, as long as it doesn't break us. We're hoping with the opening of a casino a few miles down the road, that our property will see a dramatic increase in value late this year and early next.
We're going to use the reduction in mortgage payment to pay down credit card debt, and then probably put half towards paying down principle on this loan and half towards saving for a down payment on a new home. We're getting closer to being on level footing and getting ourselves out from under the mountain of debt we have accumulated.
I did consolidate my student loans, and when I got the new loan amount, it looks like they did not apply my June payment. I contacted Mohela about it several weeks ago and did not get a response, so I have asked for a copy of my payment history in hopes that I can see actual amounts of my loans at the time of consolidation. I did not expect that Mohela would delete my loan history from their website as soon as the loan was consolidated, so I foolishly did not print off my summary sheet before the consolidation occurred. Direct Loan Servicing is no help because they weren't servicing the loan at that time and Mohela has been no help because they are unresponsive.
I ended up changing the repayment plan to the graduated repayment plan because it reduced my payments $60 a month and only added about $500 extra interest to the total cost of my loan. I plan to put the difference towards higher interest credit cards, which we are still on target to pay off next year. My husband also got a bonus in this paycheck, so that will help.
We are still waiting on our refund from the county auditor, from where they lowered the value of our house for 2010 and 2011. Based on approximate taxes for our value, we should be receiving about $500 or $600 back. The county said it would be approximately 60 days, but did not clarify whether it would be 60 days from the decision, or 60 days from the date they responded. Either way, I still have not seen the updated value reflected on their website and it's been about 90 days since the decision was made. I guess it's time to harrass them again. You know they would not be as understanding if I were late on my tax payments.
We're also still wrapped up in the nightmare that is refinancing our home with US Bank.
We applied for the refinance in April and were told that we would be under a 90 day ratelock, but that generally the refinances were processed within about 60 days. I received the application paperwork and returned it, along with all supplemental documents requested. A week or so later, I was told that, although I had submitted the signed paperwork to request a transcript of my previous two years tax returns and my previous two years W-2's, they now needed a copy of my actual tax return. I was angry. ANGRY. Because they hadn't requested these documents at the time we were applying, so I felt they were just delaying the refinance process, and because they already received the information from our tax transcripts, so I felt like they were... I don't know, trying to catch us in a lie? I'm not sure. I returned the tax returns anyway and they responded back that they needed all of the supporting pages. Um, why?? Like most normal individuals in the 21st century, I filed electronically, with documents that were provided to me electronically. I had already printed off the electronic copies of my tax returns and signed them, backdating them more than a year, and now I was trying to gather other supporting documents. US Bank seriously, SERIOUSLY needs to update their processes for modern technology.
Anyway, all of the documents were finally received by US Bank, it went through underwriting and was in scheduling when our area was hit by strong storms, bringing strong winds, hail, power outages, etc. A few days later, we got a call from US Bank that our refinance had been pulled back from scheduling because we were now being subjected to a driveby inspection to ensure that our home was still standing and had not been damaged. I was annoyed, but understood.
Last week, we got a phone call from an appraisal company wanting to schedule an appraisal. I was taken by surprise because we had been told two months ago that we would not need an appraisal because they were using automated values. I went ballistic. I called US Bank and our loan processor was out of the office for the week, I complained on their facebook page, I got ahold of a supervisor who told me it was their direction that everybody within the affected area had to have a full appraisal. The more I thought about it, the more angry I got, so I complained further about how we'd been jerked around with all of the additional paperwork after we started the application process and now, because of their incompetence we were going to be subjected to an appraisal that was going to cost us an additional $400 because they dragged the process out so long. I got another phone call from the supervisor indicating that the appraisal was required by Fannie Mae, who backs our mortgage. The thing is, I have a coworker who is refinancing with her loan held by Fannie Mae and she is not being subjected to an appraisal, so I think US Bank is full of it.
Anyway, the appraiser came out on Wednesday and was there for less than 10 minutes. The US Bank supervisor told me we needed to be at $88,000 for the value of our home. It came back at $85,000. She indicated that the difference in value did not impact our refinance, so we will be moving forward and closing next week. I will be glad to see the drop in payment, even though I know the majority of the drop is because we're going back to a 30 year loan. My hope is, with the way property values have been increasing in our neighborhood, we will get close to breaking even by next year. I don't mind taking a small loss, as long as it doesn't break us. We're hoping with the opening of a casino a few miles down the road, that our property will see a dramatic increase in value late this year and early next.
We're going to use the reduction in mortgage payment to pay down credit card debt, and then probably put half towards paying down principle on this loan and half towards saving for a down payment on a new home. We're getting closer to being on level footing and getting ourselves out from under the mountain of debt we have accumulated.
Friday, June 15, 2012
More on Student Loans
I have been writing (and I use that term loosely) in this blog for about two years now. In that time, our debt has actually increased substantially. To be fair, we had to buy a new car when my old one died a week before Christmas 2010, and we've been hit by flooding in our basement not once, but twice, but mostly we're just irresponsible and spend money that we don't have.
We lack self control. We can't tell ourselves no. Vacations? Sure. Dinner out? Why not! Buy the kids a toy? Absolutely!
The thing is, although we have a ton of debt and make massive payments every month, we don't struggle financially for the most part, so it doesn't seem like it's that big of an issue. Until now. Well, it's still not that big of an issue, but my husband has told me that we can not have another baby (which I want badly) until we move out of this house and pay off our credit card debt. He said if our credit cards were paid off by next year, we could try to get pregnant again next year.
Challenge accepted!
I previously wrote that we were working towards refinancing our mortgage. It will save us $225 a month, once all is said and done. Well, I also decided to consolidate my student loans, as interest rates on my variable loans will be increasing on July 1 and I wanted to lock in my lower interest rates.
I've noticed that MOST random readers come by my blog searching for information on grandfathered repayment plans on student loans, so I thought I'd take this opportunity to write a little more about it.
I'm not sure when the repayment plans updated, however when I attempted to change my repayment plan a few years ago, I received notice that my student loans were in the grandfathered graduated repayment plan and that changing my repayment plan meant I couldn't go back. I wasn't really sure what the difference was between the two repayment plans, so I didn't change anything. Even looking at the two repayment plans now, I do not see a significant difference, except that if I were to choose the new grandfathered repayment plans, my initial payments would be about $40 less a month than what I'm paying now and would eventually reach a dollar more than my highest payment at the end of the repayment period. The payments start at a lower amount and have a higher increase at each step. I've included an image below of what my payments look like under each scenario.
Points to Remember:
1) When I initially consolidated my loans, I was able to consolidate while still in school and maintain my grace period after graduation. I do not believe this is the case anymore.
2) Also, at the time that I took out my loans, all loans were variable rates. I believe they're now fixed rate only. Since I haven't taken out any student loans in the past seven years, I can't guarantee this is the case, but that is my understanding.
3) The only reason I am able to consolidate now is because my first consolidation loan was disbursed in June of 2005. My final quarter of college was summer 2005, and my loans for that quarter were not disbursed until July 2005, so they were not included in my original consolidation loan. If I were to take out more loans to go back to school in the future, I would be able to consolidate again, assuming they were federal loans.
Ultimately, I decided to go with the Standard repayment plan after this consolidation. The loan payment will be a whopping $15 dollars more a month and it will be a fixed payment for the duration of my loan. As you can see from my chart, payments are being stretched out to 20 years again, so my loans are currently scheduled to be paid off a year later than what is currently slated, but once I've paid off my credit cards, I will be able to pay off the student loans faster and hopefully not pay on these loans till 2032 (at which time my daughter will be 26 and my son will be 24).
We lack self control. We can't tell ourselves no. Vacations? Sure. Dinner out? Why not! Buy the kids a toy? Absolutely!
The thing is, although we have a ton of debt and make massive payments every month, we don't struggle financially for the most part, so it doesn't seem like it's that big of an issue. Until now. Well, it's still not that big of an issue, but my husband has told me that we can not have another baby (which I want badly) until we move out of this house and pay off our credit card debt. He said if our credit cards were paid off by next year, we could try to get pregnant again next year.
Challenge accepted!
I previously wrote that we were working towards refinancing our mortgage. It will save us $225 a month, once all is said and done. Well, I also decided to consolidate my student loans, as interest rates on my variable loans will be increasing on July 1 and I wanted to lock in my lower interest rates.
I've noticed that MOST random readers come by my blog searching for information on grandfathered repayment plans on student loans, so I thought I'd take this opportunity to write a little more about it.
I'm not sure when the repayment plans updated, however when I attempted to change my repayment plan a few years ago, I received notice that my student loans were in the grandfathered graduated repayment plan and that changing my repayment plan meant I couldn't go back. I wasn't really sure what the difference was between the two repayment plans, so I didn't change anything. Even looking at the two repayment plans now, I do not see a significant difference, except that if I were to choose the new grandfathered repayment plans, my initial payments would be about $40 less a month than what I'm paying now and would eventually reach a dollar more than my highest payment at the end of the repayment period. The payments start at a lower amount and have a higher increase at each step. I've included an image below of what my payments look like under each scenario.
Points to Remember:
1) When I initially consolidated my loans, I was able to consolidate while still in school and maintain my grace period after graduation. I do not believe this is the case anymore.
2) Also, at the time that I took out my loans, all loans were variable rates. I believe they're now fixed rate only. Since I haven't taken out any student loans in the past seven years, I can't guarantee this is the case, but that is my understanding.
3) The only reason I am able to consolidate now is because my first consolidation loan was disbursed in June of 2005. My final quarter of college was summer 2005, and my loans for that quarter were not disbursed until July 2005, so they were not included in my original consolidation loan. If I were to take out more loans to go back to school in the future, I would be able to consolidate again, assuming they were federal loans.
Ultimately, I decided to go with the Standard repayment plan after this consolidation. The loan payment will be a whopping $15 dollars more a month and it will be a fixed payment for the duration of my loan. As you can see from my chart, payments are being stretched out to 20 years again, so my loans are currently scheduled to be paid off a year later than what is currently slated, but once I've paid off my credit cards, I will be able to pay off the student loans faster and hopefully not pay on these loans till 2032 (at which time my daughter will be 26 and my son will be 24).
On a side note, I was reading this article about Private Student Loans. I find it disturbing that so many people are struggling with student loans, and there really isn't anything that can be done about the private loans. But that is a story for another day.
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