I’ve Paid For This Twice Already…

Archive for the ‘numbers’ Category

A few weeks ago, I made the decision to, for a short time, change our financial focus from primarily debt reduction to a mix of debt reduction and saving. Until our emergency fund is at $2000, all my snowflakes will be split evenly between our emergency fund account and our student loan payoff fund.  This was the first month I have put that into action (since everything last month went towards the purchase and installation of the new furnace), so yesterday I snowflaked $446.33 to my spouse’s student loan, and put the same amount in our emergency fund.  The emergency fund now stands at $1446.41.  Gotta love the $0.08 in interest I earned last month.  :)  Added to the debt snowball minimum of $437.59 I pay to that student loan every month, my total payment was $883.92.

When I went to redo my numbers, and recalculate the percentage of debt we have paid off, I saw that we are now at 39.95% of the original debt (as of June 2007) paid off.  It made me wish a little that we were more flexible in our payment ability for these loans, because I wanted to go pay another $19 and throw us over the 40% mark.  But I found when I did the payment from my Revolution Money Exchange bonuses last month, that for the Sallie Mae loan online, my payment has to be assigned to a “payment group” which is a minimum monthly payment - so if I make more than one payment in a month, I advance my payment due date by a month each time I make at least a full monthly payment.  I don’t want to do that, so I will only be making payments to the student loan once a month.

With that, here are the numbers:

Debt at start of blog (6/19/07) : $36,451.71

Current total as of 05/12/08: $21,888.57

Principal paid to date $14,563.14

Broken down into:

• Credit Card: PAID OFF 2/7/08

• Student loan (at 7%): $11,467.76

• Spouse student loan (at 9%): $7940.54 (made payment of $883.92)

• Car loan (at 4%): $2480.27

NCN Network Chart %:  39.95% (last week 37.65%)

When I think about the fact that we have paid over $14,000 to the principal amount of our debt in the past 11 months…  well, that is great but it is also depressing.  That is a LOT of money we could have done a lot with.  Yikes.  But hey, the spouse’s student loan is now under $8000!  And only about $22,000 let to pay before we are free of non-mortgage debt…

Someone asked me earlier if I thought we’d get to the debt halfway point by the blog’s first anniversary.  Then I was slightly hopeful, but now after the furnace, I think it will be a bit later than that.  We’d have to pay about $3700 to debt in the next month… hey - just about exactly what the furnace cost… heh.  But soon!  I have some survey income I just received that will go towards debt for the next month, and I’ll have some blog-related income and another check from taekwondo before next week.  We will definitely be over 40% paid off next week - just by paying the minimum payments on the car and my student loan!

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With the furnace purchase looming on the horizon, it is time to get all of our ducks in order and look at how last month went. Overall, it was a pretty okay month, but that was due to my increasing several sources of income more than spending less money. In fact, I spent more money on both gasoline and food than I had in any previous month over the past year, and with my inlaws visiting for a week, we had a few miscellaneous expenses creep up. However, my inlaws bought my spouse both a new drill and a spreader for the yard, so I think we came ahead on that deal.

So in summary for last month:

• We brought in $922.69 more than we spent.
• Of that, $316.45 needs to be carried forward for irregular budgeted expenses
• Which means we have $606.24 as a surplus

However, by my calculation of the extra income I brought in, we should have $880.26 as “surplus” left to apply to our student loan (or in this case, the furnace), so in fact, we overspent by ~$280. This can be traced back in our budget to increased medical expenses (I had two doctors visits and a CT scan, all of which had copays that totaled $90), gasoline (with the new taekwondo position we drive more, and our gas increased by almost $100) and groceries and utilities were also a bit over budget. I’ve adjusted the gasoline budget upwards by taking some money from my taekwondo pay and classifying it for gasoline, and hopefully the other expenses I can get a little more under control this month. We were successful though in spending less than we earned.

The $606.24 is earmarked for the furnace, which added to the extra paycheck and the stimulus payment, brings us to $3406.24. Another $300 will come from funds earmarked in May for student loan payoff, and that will cover the entire $3700 cost. And we’ll have an energy star rated furnace. Hurrah!

As for going forward, since I have a number of medical expenses that will come in soon, we will be taking any extra income and evenly splitting it between the student loan payoff fund and our emergency fund until the emergency fund is $2000. My yearly deductible for my health insurance is $1000, so saving an additional $1000 in our emergency fund at this point, until we know exactly what the different procedures will cost us, seems like the prudent thing to do.

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With the controls for our current furnace still acting up, and this being a very good time to buy a furnace (the installers are not busy so you can get better labor prices) we’ve decided to go ahead with the new furnace installation in the next few weeks.  Because of that, I don’t have any debt updates to report from the past week, but I have plenty of numbers to discuss anyway.  Furnace numbers!

We had three companies come and do estimates, all local dealers for major manufacturers.  I used a combination of personal experience, experiences of friends, and website research to choose the ones to come and do the estimates.  Basically, breaking down by manufacturer, our Trane estimate was the least expensive, at just under $3000, and then Rheem at $3180 and finally, Bryant which was around $3300.  However, the Trane estimate was not replacing our thermostat (the other two were), and the Rheem dealer actually gave us a number of additional options which were very attractively priced to us, and things we were interested in as well.  Adding duct cleaning and an additional air filter (this Aprilaire one) brought the Rheem price up to $3930.  But, I felt there was an even better price out there.  So, I went to work.

Last night, the Rheem dealer emailed us to thank us for our interest.  I responded thanking them for their visit, and explaining that we were interested in these particular add-ons and why (my allergies and my spouse’s asthma) but that the price was a bit over what I was budgeting.  So I asked if I could get a discount for packaging these services.  The president of the company (who also came to our house) called me back today and offered us a $150 discount on the air filter plus a $120 discount on the air duct cleaning, bringing the total cost to $3700.  There is also a $270 rebate on top of that from our gas company for installing a 90%+ AFUE furnace, but we would get that regardless of who we chose.   And, they are also giving us a UV air filter for bacteria that connects directly to the ductwork for free.  I thanked him for his time and told him we would call back by Friday with our decision.  I am waiting for some information from the Bryant dealer about possible discounts, but basically, we think our decision is made.  The air duct cleaning alone will only be $230 which is half of the most inexpensive quotes I have ever gotten for our house.  That saves us money right there on something that has been on my to-do list for a year and needs to be done.

Why did we end up choosing the one we did?  They were professional, their price was competitive, and they offered options but didn’t push them on us (there was other optional equipment such as a humidifier that I said I wasn’t interested in and they dropped discussing them right away).  They had excellent reviews, and honestly, we found them originally through a link from the Energy Star website.  It pays to make sure you’re listed where people are looking for you, I think.   They didn’t try to push a more expensive furnace than I was interested in on me (they explained the different between the one we chose and both the upgraded model and the less expensive model, but unlike the Bryant dealer they didn’t keep pushing the “better” one) but they also gave options and explained choices (the Trane dealer was basically “this is what people get, you’d get this”) and let me decide what was important to me for myself.  And hey, I got a 5% discount just for asking “what can you do for me here” so that’s a bonus. 

So now on to the big question - where is $3700 coming from?  By very fortuitious timing, we actually are leaving the emergency fund completely alone.  The money comes from:

• $1000 from the extra paycheck in May
• $1800 stimulus check
• $900 from student loan payoff fund

This pretty much empties the student loan payoff fund for May, but I should be able to scrape together at least an extra $70 to get the student loan payment this month up to that double payment level so I can put the extra amount paid towards principal.  We are scheduled to get our stimulus check by next Friday, and we get the extra May paycheck this Friday, so then we will be all set to pay for it and can schedule accordingly.  Not all that exciting to spend so much money - but we’ll save lots of money over the next 20+ years with this furnace compared to what we have now, so… yippee!  Actually, according to my rough calculations, the furnace will completely pay for itself in 6-7 years in natural gas savings.  Not a bad little investment at all.

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Last week, I put up a poll for which debt my Revolution Money Exchange referral bonus should go to, and throughout the week, readers voted. With just over 50% of the vote, my spouse’s student loan (our highest interest debt) won, and this morning, I made a $645 payment to that loan ($525 in RME bonuses and $120 in other money I had saved in the student loan payoff account). Thanks for voting! Coupled with making a car payment last week, this is how the numbers look as of today:

• Debt at start of blog (6/19/07) : $36,451.71
  Current total as of 04/22/08: $22,729.06
  Principal paid to date: $13,722.65
  Broken down into:
  • • Credit Card: PAID OFF 2/7/08
    • Student loan (at 7%): $11,467.76
    • Spouse student loan (at 9%): $8781.03
    • Car loan (at 4%): $2480.27
• % of original debt paid off from NCN Network Chart: 37.65% (last week 35.38%)

Everything is trending steadily downwards! If you missed out on getting a $25 bonus from Revolution Money Exchange and you wanted to, don’t despair - RME extended their bonus period to May 15th! My spouse has decided he wants in on the action (I think he thinks the readers would choose for his bonus to go towards a Playstation 3 instead of towards debt… hah hah). So I have my spouse’s referral banner up, and May 15th I’ll post how much he earned and a poll to decide if he gets to put more towards his PS3 or he pays off more of our debt. I’m guessing debt. We’ll see. Revolution Money Exchange is like PayPal in that it is a person to person money transfer service - it has drawbacks (like the money needs to be in your RME account, no direct debit or credit transfers) but there are no fees for transactions which is an improvement over paypal for me. They are offering a $25 bonus for opening an account (your referrer gets $10 as well), and you can sign up by clicking the banner below:

Again, no pressure from me to sign up if you’re not interested or don’t want to open another account - but if you are interested, feel free to use my spouse’s referral. I’ve used it once for a person to person transfer, as well as transferred money to my bank account three times from the RME account, and I am going to use it again this week for a person to person transfer instead of paypal. I’ll write an in depth review soon of what I see, for me, as the pros and cons of the service. For me, I think in many situations it is a very viable alternative to paypal and I hope it catches on. I don’t mind paying fees to paypal when the payer uses a credit card, but the fact that I pay fees for everything with paypal really bothers me.

With my new taekwondo position, we are using a lot more gas than we used to. Not to mention, gas is more expensive than ever! I need to figure out how much of my taekwondo salary needs to go into our budget for rising expenses, and how much can go towards debt. I hope to figure that out this week, and then put more money from my April paycheck into the student loan payoff fund. I like that every time I make a payment, it seems the balance goes down by a number in the thousands place. It is really starting to feel real that we will get this loan paid off before the end of the year. Maybe by the time the car loan ends (March 2009) we’ll have paid off the rest of our debt as well. That is more than a stretch at this point, but anything is possible.

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Well, today is the last day for the Revolution Money exchange $25 bonus for signing up. I said when I posted my referral code, that whatever I made from referrals, I would let the readers decide which debt I apply it to. The great news is I maxed out my 50 referrals so I have $525 to apply to one of our three remaining debts. Yay! And if you still need a referral for RME, I replaced my referral banner with Emily’s from Remodeling This Life (with her permission of course!) so that anyone who wants a referral still will get one. Without further ado, here is the poll:

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I will leave the poll open until next Tuesday, and then I will post what the readers decided and make a payment somewhere. Hurrah!

I didn’t make any new payments to debt this week, so my total % paid off remains 35.38%. I did receive $50 from My Survey that is now in the student loan payoff fund. I will also be making a car payment this week which will lower the debt total before next week. And then next week I will be making a $525 payment to something! I am excited to find out to what.

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