A Sale, A Purchase, A Debt Erased

And we're back for the second time this month!  This time with feeling!

While we've been making good progress on our debt snowball we felt that we could be doing more.  We also felt that driving two cars that get average to below average gas mileage wasn't the best thing, and considering used car values are higher than normal now, we decided to sell Kristi's car.

A bit of history on her 2004 Subaru Impressa TS.  It is Turbo Sport (hence the TS) with a 2.5L engine and, of course, All Wheel Drive.  In 2010 she purchased it for $8,500 from a guy who drove it over from Boston (coincidentally she now sings in the same choir with him!).  He listed it below blue book because of some cosmetic blemishes and because he just wanted to sell it quickly.  The car had just 35K miles on it.  She happily purchased it and has loved it every minute since then.  Except for the gas mileage.  She gets about 23 MPG combined city/highway, and about 28 just highway.  Not bad, but not great.  Still, in 2 years she put 46K miles on it.  Riley did some cosmetic damage on the interior (he chewed up the stereo and the turn signal lever), and we carted the dog/cat/gear around in it.  Needless to say, we used it and drove it hard.  It went to Utah, to California, to Idaho, to Washington, and all over Oregon.  It has been a great car, but it was time to downsize and help push us toward our Debt Free goal.

She listed the car at a ridiculous price on Craigslist, $9,995.  Blue book had the car $7,500 for private party in Good condition.  The Dealer Price in the same condition was around $12,000, so she picked a spot somewhere south of the middle.  The interest was very high, which surprised us considering the price.  However, most people flaked or wanted to pay closer to blue book, which wasn't surprising.  We figured we'd hold out for a little while and then drop the price to about $8,500 and see if we could sell it for that.  If not we probably would have just kept the car.  But, luckily for us, the interest was still there and we found someone to buy the Subaru for $8,700.  We probably could have held out for $9,000, but it wasn't really worth the hassle.

While Kristi had the car up for sale we were also looking for a suitable replacement.  We wanted to stay in the $2,500 or less price range.  It didn't make sense to sell the car and then buy a car that didn't leave us enough money to pay off a student loan, which was the whole point of this whole thing.  We were aiming for a Geo Metro or something similar.  However, the prices for Geo Metros are all much higher than they should be because the gas prices have gone way up ($4.19/gallon at the moment and rising).  Honda Civics, Hyundai Accents, and other similar small cars are all selling much higher than their KBB value because of their gas saving value.  We checked a few cars out, but they were not in great shape or they were just overpriced.  For example, this Geo has a KBB around $2,300 from a dealer, and it's going for $4,900.  Crazy, right?

So Kristi contacted Scott, Ben's roommate, who was selling his 2000 Ford Focus.  The original idea for selling the car came from seeing his Focus was for sale anyway, so she decided to see if he still had it.  As our luck would have it, he did!  So we set up a time to see the car and take it for a spin.

Kristi fell in love.  We talked it over and bought the car.  We bought it for $1800.  Buying from someone we know has been nice as there have been a few questions after the purchase we've been able to get answers to.  The car came with snow tires installed, but we had to purchase regular tires (about $380), so we're still in under our budget for the car.

Using the rest of the proceeds from the car we were able to pay off my last remaining Gate Loan of $4,830!  We have one of Kristi's student loans left before we tackle the Last Loan.  There's a chance we can pay off Kristi's loan next month because of her two paychecks, but we might hold off to make sure the summer isn't a disaster.  What's the point in paying off a student loan if we're just going to charge up a credit card because we have no cash?

We also decided to get a new mattress, which we have been putting off for a few years.  We found a King Size Malm frame in the IKEA As-Is section and snagged it and everything needed for the setup (slats, midbeam) for $155.  The whole setup new would have been over $350.  So, with frame in hand we set out to get a new mattress.  We tried a few mattresses out at Sleep Country and then went with a memory foam mattress from Costco that has great reviews and was only $900 (compared to a similar model at Sleep Country being $2,500).  We'll be getting the mattress in a few days and we'll see how it goes.  We're not worried because Costco has an awesome return policy, so if we don't like the mattress it won't be an issue to return it at all.

Wow... this has turned into a long post, so I'll draw it to a close.  We've mowed down another loan, taken care of a pressing need, and have lowered our total student loan debt to just a hair over $28,000.  After next month we'll be below $25,000.  If we can stay focused we'll be Debt Free in time to celebrate our 2 year wedding anniversary, which would be quite the celebration indeed.

Another one bites the dust!

We paid off another loan yesterday!  It was one of Kristi's loans for her MAT program and it had a very high interest rate (6.8%) so we're glad it's done.

We now have only 3 loans left to pay off, and we fully expect to pay off one of them next month.  The List below has been updated to reflect out progress.

1. The Truck
• PAID! (Nov 11)
2. Gate Loans
• PAID!! (Dec 11)
• PAID!!! (Jan 12)
• PAID!!!! (Feb 12)
• $4,823 - EPD:  June 2012
3. ECSI
• PAID!!!!! (Feb 12)
4. Stafford Loans
• PAID!!!!!! (April 2012)
• $5460 - EPD:  October 2012
5. Federal Direct Loan
• $22,622 - EPD:  June 2013

The List looks a bit funky, right?  Why/how are we paying off a loan in June but then not again until October?  Well, The List is just that, a list.  What it's not telling you is our income situation or how we will still money at the end of this month to contribute to the Gate Loan  The reason we're going to be able to pay off the loan next month, but not again until October is because of how Kristi gets paid.  Typically she gets paid at the end of the month, but in June school ends on the 14th, so she'll get paid then for the month of June.  

In years past we have saved money each month to cover the two months Kristi doesn't get paid, August and September.  That means that normally her June paycheck would sit in a savings account and be used to cover July.  This summer she is working summer school and will be getting the equivalent of about 70% of a normal paycheck for her, which we will use to cover August and September, along with my paycheck.  A byproduct of this is that we will only be making minimum payments on our loans in August and September.  

Now, since she's effectively receiving two paychecks in June, we'll go ahead and payoff the Gate Loan then, rather than just having the money sit in an account until July.  It'll be nice to have an extra thing to celebrate on the cruise, too.  

March Madness, April's Slow Progress

March was a very full month, to say the least.

There was the final installment of the cruise, Kristi's trip to LA/Las Vegas, my trip to Orlando, plane tickets to San Francisco, a tattoo, and Gamestorm.  There were numerous ways to spend extra money throughout the month, and I believe we found all of them.

While were able to pay about 2200 towards loans in March, we spent more than we should have and our Debt Snowball will suffer now in April.  I think we'll be able to contribute about 1000 towards loans this month (which is about one-third of what we should be able to do, on a normal, thrifty month).

Kristi and I discussed our spending and I found we had slipped into our old habits for the month.  We weren't discussing much about the budget, we weren't keeping great track of our spending, and we were using our cards a lot, instead of getting cash and spending from envelopes.  3 ingredients to an over-budget month, to be sure.

And it probably won't slow down.  I'm going to Germany, and while I'll be covered for most expenses while I'm there, I still plan on seeing some sights on my own which will cost some money.  We're also planning to fix our lawn with sod, which will cost a couple hundred dollars.  By the end of the month I'm hoping we'll return to some normalcy, and get back on track.

However, we're still on track to be Debt Free by June of 2013, which is still 2 months ahead of our initial schedule of August 2013.  We had a great run for a few months, and we lost our way a bit here in March/April, but we'll refocus and get back on track.

The slow March begins...

The last 4 months have been great, haven't they?  In each of the last 4 months we've paid off a loan!  It seems so crazy sitting here thinking about it.

In November we paid off the truck.

In December and January we paid off two of the Gate loans .

In February we paid off the ECSI loan and the third Gate loan.

In short, we killed it.  We really focused, even while going through the holiday season, and we met our goals.  And now comes the hard part.  

The remainder of our loans are all multi-month projects.  We knew this was coming, but it does derail the momentum a bit.  Paying off a loan was a nice way to end each of the last few months.  It allowed us to build a lot of momentum and fine-tune our spending habits that will propel us through the slow March that's upon us.  (See what I did there?)  Our next estimated payoff date (EPD) is April, and that will be one of Kristi's Stafford Loans ($4600 @ 6.8% Interest).  

Let's recap The List, shall we?

The List

1. The Truck
• $2,256 - PAID! (Nov 11)
2. Gate Loans
• $2,604 - PAID!! (Dec 11)
• $2,628 - PAID!!! (Jan 12)
• $2,799 - PAID!!!! (Feb 12)
• $4,978 - EPD:  June 2012
3. ECSI
• $5,486 - PAID!!!! (Feb 12)
4. Stafford Loans
• $4600 - EPD:  April 2012
• $5848 - EPD:  October 2012
5. Federal Direct Loan
• $22,495 - EPD:  July 2013

The more observant of you will notice a large gap between EPD of the Gate and second Stafford loan.  In previous years we stored money over the school year to cover the two months Kristi doesn't get a paycheck.  We realized that this money we were saving would almost all go to loans anyway, so we decided to stop saving and start using it towards loans now.  However, the drawback is that in August and September we won't have a snowball.  We'll make the minimum payments, but that's it.  Kristi is doing summer school this year, so that may change, but right now we're not planning having large snowball funds in August and September.

I'm incredibly happy with our current progress.  In the last 4 months we've paid off roughly $15,780 in loans.  I am amazed at that total.  I knew we were capable of this, but seeing it in print is still jaw-dropping.  It's also amazing that we're in month 5 of a 22 month plan, almost 1/4 done.  I say 22 months because with our progress so far we've cut a few months off the total time (even including the Aug/Sep no extra payment months).  


I want to thank everyone for the support.  It's really great to know we're on the right track and that everyone understands and supports us.  It's been hard saying no to a lot of the fun stuff we've had to cut back on, but in the end we'll be able to do so much more that it'll all be worth it.  Besides, we still have Alaska 2012 to let our hair down a bit on, so we can recharge and refocus when that trip is over.  It's very exciting to see where we were, and where we are headed.  Let's do this!

February Progress! "It's not you, it's me"

Loan Update:

Hooray for Tax Season!  Like I said earlier we got $3265 of our money back from our loan to the government.  Combining that with our refund from the refinance ($789) and the house payment we're skipping because of the refiance ($765), and our normal monthly contribution of about $2500 we had about $7319.

SO!  We paid off the ECSI loan which was $5140.82.  Yay!

We also paid the AMEX ($863) which had the Cruise Deposit, the Home Inspection, and Kristi's flight to LA.  We use the AMEX for these purchases for the protection the credit card offers, and we never carry a balance since we pay it off at the end of the month.

Additionally, we had about $370 left over in January that we carried over into February to pay loans with.  Also, Kristi found out that she will be teaching summer school this year, so she'll have another paycheck in July that we will use to cover expenses in August and September (the two months she doesn't get paid for the year).  This means the money we've been saving for those months we can use to pay off a loan this month.  So, with some luck and thrifty spending we'll be able to pay off the Gate 3 Loan.  I'll post when/if we do it this month or decide to play it safe and do it in March.

"It's not you, it's me!"

This week we went to Bank of America and to Umpqua and closed a bunch of accounts and consolidated others.  We opened an Umpqua account because it gave us a discount on the closing costs and we thought it would be easier to pay the mortgage with an Umpqua account.  While we were thrilled with the service we received, Umpqua is severely lacking in their online services and it's a pain in the ass to use your phone to access your account (only 1 phone can be linked to an account).  For the way we do our banking it simply wasn't going to work for us.  We cancelled our Umpqua accounts and got rid of a bunch of extraneous BoA accounts.  We know only have 1 joint checking account and 2 savings accounts. 

However, the real story came when we cancelled our Visas with BoA.  We never used them (only use the AMEX), so we decided to finally cancel them.  The banker called the Visa people to cancel my card.  She chatted with the rep and closed my account, no questions asked, except "Why?" and our answer. "we don't use credit cards anymore."  No problem there.

Then!  Then she had to call back to cancel Kristi's.  She got a different rep this time, a real go getter who didn't want to have to cancel the account.  Eventually the banker passed the phone to Kristi who dodged some questions, and finally after a few minutes, Kristi said, "It's not you, it's me."  The banker and I laughed so loudly that Kristi had to cover the receiver.  We laughed about it for a good few minutes afterward and then left.  Just remember, when you want to cancel your credit card, you have to use the classic breakup line, "It's not you, it's me!"

February is Rocking!

I just wanted to write a quick post about how awesome February is shaping up to be for the debt snowball.

We sent in our taxes last week and expect our refund to arrive next week.  Our refund was about $3300, which will go directly to loans.

In addition to that, we refinanced our home from a 30 year fixed @ 5.0% to a 15 year fixed at 3.25%.  Currently our house payment, included private mortgage insurance (PMI), taxes, and home-owner's insurance totals roughly $765.  It's going to go up to $925 (and we're eliminating PMI), but our loan term has been cut in half.  I don't have the exact numbers in front of me, but the amount we're saving in interest is ginormous.  However, the other benefit of refinancing our home loan is that we get to skip a full 2 months of house payments, so all the saved money goes to loans.

But wait, there's more.  Not only are we getting a great interest rate on our house, but because our loan-to-value (how much you owe compared to how much your house is worth on the market) is low we're actually getting money back from the refinance this month to further put towards loans.

So, all in all we'll have about $6000-$6500 to put towards loans this month.  We've decided to pay off my ECSI loan which rests at about $5200 and then put the rest towards the lowest Gate loan remaining.  The main reasons for skipping to this loan is 1) It has the third highest monthly payment ($80) and the second highest interest (5%) of all our remaining loans.  2) It doesn't sync with Mint.com, so it's a logistical pain.  And 3) I'm sick and tired of having to use their website that was set up in what feels like the 90s.

And also, since there's no house payment due next month either we'll have enough money to knock out the smallest remaining Gate loan AND pay the balance due for the cruise.    

I'm very excited about how this is shaping up.  Sometimes I'm too excited.  I look at the calendar and want it to move faster, I want to be done with our loans.  But I know we're headed in the right direction, and I know that we're ahead of our projections, so I will try and slow down and enjoy the experience of destroying our debt.

January Progress

So, it turns out January has been busy!  Or I keep forgetting to blog.  One or the other, you decide...

The important news of the month:  We paid off yet another DEBT!  Woohoo!  Which means, if you're playing along at home, we've paid off 3 loans in the last 3 months.  We just bowled a turkey!

I wish I could adequately describe how good it feels to be chewing through our debt.  In fact, with just a few more days to go in January we are sticking to our budget and will be on pace to pay off another loan in February.  We have like $30 bucks left for the rest of the month, but we have no needs, except possibly gas, until February, so we should be good to go.

February is going to be a tough month.  Fact: 34052 of our friends have birthdays that month, so the opportunity to spend money will be high, but our friends understand our goals and are very supportive in our quest.  So if we have to be lame and stay home or go out and have water instead of beers, I know they'll be fully supportive.  Besides, when we're done, after all the sacrifices we make, we'll have a giant party to celebrate.

In addition to paying off a loan this month, we also spoke with my friend Dave Lind about refinancing to a 15 year mortgage.  After some consideration, we decided to go for it.  Rates were, when we locked in our rate, just above the all time lows.  In fact, shortly after we locked in our rate, at 3.25%, rates went up.  We had an appraisal on Tuesday, and our loan will be going through soon.  In the end, we'll end up paying about $120 more a month, but we'll pay off our house 15 years earlier.  Sounds good to me.

Next month's loan is approximately $2800, which is going to push us to the edge of our finances.  We also have to pay for the cruise deposit, which is going to make February crazy tight.  Wish us luck!