Monthly update

We were just paid, and we divided the spoils between our student loans and our Roth IRAs.  We now owe $71,812 on our student loans.  We have paid a total of $4221 so far this year.  Good, but not on track to put us towards our $40,000 payoff goal for 2012.  We did just finish maxing our Roth IRAs for 2011, so with that goal down, we can focus exclusively on debt for the rest of the year (fingers crossed).

In related news, we just learned that our daycare costs will be increasing by $800 a month starting this spring.  Ouch.  I’ve asked hubby if we can try to cut the budget in other places to make up for it, and he’s amenable.  Let’s see if we can actually make it work in practice.

How did your February go?

Back

It’s been a rough few weeks at work, but now I finally have some downtime to write.  Things are chugging along, financially.  We’re $2000 away from our goal of maxing our Roth IRAs for 2011, and so far we’ve paid a little under $3500 down on our student loans.  Our debt stands at $72,919.  I know we are blessed and that things are moving along well, but I spend much more time strategizing and thinking about paying down debt than actually doing it, as paydays are just twice a month.  I guess I”m just feeling a little impatient today. 

I hit the gym today for the first time in months.  Hopefully, if I revisit my fitness obsession, I can be more patient with our financial picture.  I’d love to hear strategies for staying focused, without becoming obsessed…

Roth update

We were just able to move another $2,000 to our Roth IRAs.  We’ve now contributed $4,000 of our $10,000 goal.  We should have our tax refund by mid-February, so there will be a big update then. 

I’m impatient.  I know in the long run this is the right goal to attack first, but I really, really want to hit my debt hard.  Just another month or two…

Student loans … and student loan interest

In June of 2009 I graduated from graduate school, with a freshly-minted diploma and $135,000 of student loan debt.  One of my loans went into repayment immediately.  The remainder was deferred until November.  I made $300 payments on the one loan in repayment, paid an additional $2,500 in student loan interest (to take the maximum tax deduction) and by November … I still had $135,000 in debt.  Interest was accruing at a rate of more than $700 a month.  Fast-forward 2.5 years, and I have been blessed to be able to pay off about $60,000 of that debt (about $30,000 of which I have paid off since September).  I can see what this has done for my minimum monthly payment, which has dropped from about $1040 a month (my loans are on a 25-year repayment plan) to less than $750.

I can also measure the impact of our payoff by the amount of interest we pay each year, thanks to our tax records.

In 2010, we paid $9,648 in interest.

In 2011, we paid $9,182. 

I was actually surprised that it didn’t drop more, but I guess this reflects that it was only recently that I started paying it off in big chunks. Next year, I hope not to pay more than $5,000 in interest.  I think it’s doable.

 

Tax Refund! Yippeeeee!

I just calculated our tax refund last night and it will be a little under $4,000.  It was about what I had expected, but it was still good to know for sure.  I took a new job this year, so I had two W2s to contend with.  After I had entered the first W2 it said we were getting $8,000 back.  I knew that was too good to be true, and it was, but $4,000 is still a good chunk of change.

I think we will contribute the money to our Roth IRAs, bringing our total for 2011 to $6,000 and leaving us with $4,000 more to contribute by April 15.  Next week when we get paid, we should be able to contribute $2,000 more, then hopefully top it off with the last paycheck in February.  And THEN… I’ve got my sight on some loans I want to melt away.

2012 Goals

It’s January, and I just started this blog.  It’s probably as good a time as any to post my financial goals for the year.  So, without further ado, here they are:

1. Max both hubby’s and my 401(k)’s.  We have this money deducted automatically from our paychecks, so this goal is on auto-pilot.  I’m a big believer in dollar cost averaging, so I won’t be able to check this goal off my list until late December when the last deposits are made.

2.Max out both hubby and my Roth IRAs for 2011.  I generally do this bit by bit over the tax year, but I did not contribute to our Roth IRAs at all during 2011 because I wasn’t sure we would be eligible to contribute in full.  (There were a lot of unknowns involving our income last year.)  I am now close to wrapping up our taxes and happily, we should be eligible, for perhaps the last time in the foreseeable future, to make a full contribution.  I’m going to wait to max them until our tax returns are done (we’re still waiting on one W2), but, as it seems pretty clear that we won’t be anywhere close to the income limit, there’s no sense putting this goal off any longer.  We deposited $2,000 in our accounts this week ($1,000 for each of us) and, including our tax return, should have this goal out of the way by early March, at the latest. 

3. Pay at least $40,000 of the $75,000 remaining on my student loans.  I think we should be able to pay $4,000 each month on average, but hopefully $5,000 if we run a really tight budget.  If it were up to me, we would live on ramen and cut out “fun” expenses to zero until these loans are gone.  But it is not entirely up to me.  Marriage is about compromise.  And although my husband is a great saver, he also likes to splurge on travel during the little time we have free.  So the student loans might take a few more months to pay off than I would hope.  I’d still like to pay them off in full by the end of 2013, so $40,000 is a realistic 2012 target to achieve that goal.

And that’s it.  Anything additional (that will not go towards “fun”) will be put towards the loans.

Onward and upward!

Payday

When I was in my 20s, I lived paycheck to paycheck.  I never really ran up a credit card bill (I think I carried a balance once, and then only for a month or two), but I did spend nearly every penny I made.  While I wouldn’t want to return to those days by any means, there was one aspect of the lifestyle that I miss: the giddy exhileration I felt when payday rolled around.  Suddenly, I’d have hundreds of dollars in my bank accounts, and the possibilities were endless.  I could get a drink after work with friends, or buy a new dress, or go out to dinner.

Now, our checks are planned down to the penny weeks before we receive them. And there is always money in our accounts that we could blow on dinners out or new clothes, even if now we are too grown-up to do it.  I still love payday — it helps me move ahead with my goals — but it’s just not the same.