Category Archives: Debt Management

Last Check for The Mitsubishi Car loan

On Friday, I wrote the last check to officially pay off our Mitsubishi car loan!!! We will be debt free, other than the credit cards we pay off every month, five months earlier than I had planned. Instead of waiting to August to pay off our car loan, I decided to rip off the bandage and pay it off with money in our savings. Especially since March is a three paycheck month for me.

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I feel like Emma Stone saying “Oh yeah” to the man. In this case, “the man” is the bank.

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My bank account on the other hand felt like Tina Fey or “Lemon” in 30 Rock as she discovered a terrible truth/revelation about her team. $2,300 horrible truths!!! That’s how much I wrote the check for by the way! :)

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Interest sucks. I checked the balance, and from last August to this month, March, $238 of interest had accumulated on a balance of less than $5,000. We had the money all along sitting in the bank, but I didn’t want to write the full amount due to the psychological feeling of seeing our savings account decrease by so much. In the meantime, we paid an additional $238 when the money in our savings account was earning 16 cents. Bahhhh!!! But it was the peace of mind I needed for a couple of months, as we built up our savings. I probably should have written the check for the remaining balance as soon as our savings hit $20,000 back in January. Maybe I would have saved $50?

Fifty bucks is fifty bucks!

Right now, we are completely debt free. Now we hustle and bustle in order to save the house down payment.

Since, we now don’t have a loan check going off every month, I am going to up our monthly savings goal from $2,500 to $3,000. If my projections are correct, we should hit the $50,000 in 6 months not counting any additional money we may come across outside of our regular salaries. April, May, June, July, August, September. 

How is your debt payoff? Did you notice I switched to self host? How do you like it?

$17620 in Student Loans

I was offered $17620 in unsubsidized Stafford student loans. I did not have to accept the loans because 1) my tuition will only be $9000 this school year  2)I’m working, so I don’t need loans for living expenses. However, if I did not have scholarships or help from Mr. Paycheck, I would be forced to take a part of these student loans.

Then, I started thinking of what $17620 would get me:

  • Down payment on a $100K house or condo. Hmm…not sure I can get that type of house in nice Dallas. More like $200K-$250K.
  • A nice brand new car! :) Mini cooper anyone? LOL
  • A nice vacation to Europe and Latin America. Yup, both!
  • Lots of shoes and clothes….my closet wouldn’t be big enough!!!!
  • An Iphone? A new watch? Or maybe an IPAD???

And that’s how people quickly spend loans. We get caught up in the money that’s in our checking account once it’s disbursed, that we forget the bank owns our lives until then, and we will be paying for them to take their clients to expensive dinners and golf outings.

If you are planning to borrow money for education, car, or a house; make sure you pay the minimum amount of interest to the bank. A lot of people get excited over the 200K house they bought with 4 bedrooms, 2 baths, 2 living room areas; they forget that house will probably end up costing 400K after interest payments. Or that nice brand new car that was only $17000, will end up being $22000 after interest payments. Who kept the extra money? The bank.

I’m not saying banks are evil. I believe they are needed financial institutions. But they gotta make money. Just make sure it’s not off you! Cause you’re not getting any filet mignon!

You are probably thinking, oh I would never do that with my student loans, but you would be surprised at what you spend the money once you get it. I had classmates who I knew were broke because we talked about, and as soon as they got their student loans would buy a fancy new smartphone or go on vacation.

If you are a student, my advice is to calculate how much you need to scrape by. And take out just that amount. Find a job, or eat ramen noodles, but don’t take out the max. amount of loans. If you can start paying them off just a little before you graduate, start paying them off. Don’t wait until the grace period is over to start making payments, by then you will be too used to having money in your pocket and you will only want to pay the minimum.

Just trying to change some mindsets over debt :) I know a lot of people don’t mind debt, but I’m just not one of those people.

Saving, Debt, and Personal Goals for July-December 2012

It’s time to write down my saving and debt goals for the second half of the year. As you read on my post, Financial Choices, my finances have been driving me crazy lately. I have to admit I am a control freak when it comes to certain things. For example, if you didn’t suspect it already, I like knowing what goes in and out of the bank account, even if it makes me feel bad. I know we have been spending a lot lately, hence the bank account hemorrhage. A lot of it had to do with car purchase, moving to a new apartment, merging accounts (debt). But I think since I started working, we should start climbing up the hill, and building some financial muscle.

So, I found out some information regarding our car loan. Please let me know if this is typical of car loans, since I have never had a car loan before!The interest rate scared me the most!

  • Current Balance: $5238.19, Interest Rate 6.64% Accrues Daily

Accrues daily??? I never heard of it. I thought most loans accrued monthly. I dislike debt very much! This realization made me jump start our debt paying off efforts even if hurts a little bit in the short term.

Here is a summary of our saving and debt goals:

  • Pay off a minimum of $300 every month, starting this month, July! Send payment during the first week of the month, so money disappears from bank account.
  • Save $1,000 more in July, $3000 in August (three paychecks), $2,000 in September, $2,000 in October, $2,000 in November, $2,000 in December.
  • Put 7% to 10% in my employer’s 401K.

I am aiming really high for our savings goals, in hope, we can increase our savings account. Even if we get 50% of the way through the monthly goal, I think we are making excellent progress. This should, also, increase our net worth significantly.

I, also, want to make some improvements in my personal life! :)

  • Make A’s in my Fall classes.
  • Work hard at my company and become an invaluable asset.
  • Identify a high level mentor in my workplace (I want to approach my VP).
  • Work out a minimum of 5X a week.
  • Visit family at home :)
  • Have fun with hubby and friends!

Last but not least, is my blog. I am still not sure what goals I should have for this blog. It is a hobby, and I enjoy writing just for the fact I like to share my experiences. I feel like if people had shared some of their experiences early on with me, I could have learned more. I love learning! So my goals are simple:

  • Continue to share my experiences with PF world.
  • Build relationships with fellow PG bloggers.

What do you think? Have you made your saving, debt, and personal goals for the second half of the year?

Graduating Debt Free

I am graduating debt free with both, my Master’s and Bachelor’s. Many might think this is impossible, but with a little hard work and persistence, you can do it too.

Here are some tips for high school students:

- Overachieve in Academics, Athletics, or Music: In high school, I dibbled in sports and music. I was in band and ran cross-country and track. But I always knew that academics was my strongest area. So, nothing got in my way of getting all A’s and graduating with Honors. Choose your strength, and work hard to make sure you stand out.
- Take AP, IB, or Dual Credit classes: I was in the International Baccaularate Program, and I also took AP classes. Dual credit classes are great because you take community college classes during your junior or senior year. When I came in to college, I had 42 credit hours available to transfer. I only ended up using about 15 hours because the rest did not fit my major.
- Take the PSAT Seriously: If it’s one thing I regret, is not taking the PSAT more seriously. A couple of my friends received full rides to school because they were National Merit Scholars. If you have kids, make your kids study for this, it will be worth it in the future.
- Apply to 3- 6 universities: It’s very important to apply to a select list of universities. I applied to 8 to 10, and lost focus. If I were to go back, I would only apply to about 6 universities. It would make it easier to focus on school scholarships, dorm applications, financial aid, etc.
- Apply to scholarships: I applied to so many scholarships. In the end, the way a paid for school was through one big scholarship, one semi big scholarship, and many small scholarships. I essentially got paid to go to school.
- Make a logical choice: Many students choose their school based on a lot of “emotional factors.” It’s their parents alma maters or the school has a great football team, etc. While this might sound awesome at first, it will not when you have to start paying off student loans. Treat your decision as a financial decision. What should matter is the school reputation in your degree and the amount you will have to pay for it in the end. I decided to go to my school because I received the largest offer from them. All the other schools only came close to matching 50% of my school’s offer. I accepted my school’s offer because it was the best. I ended up loving my school and have had a phenomenal experience!

Tips for when you are in college

- Keep Overachieving: Just because you made it to college, doesn’t mean you can start slacking off. Keep up your grades, get to know your professors, and take challenging classes. Keep working hard.
- Apply to more scholarships: I applied to more scholarships after my freshman year, and actually ended receiving more money. High grades and extra curricular activities helped me stand out from the crowd.

Result: I finished my Bachelor’s in 3 years, Magna Cum Laude, and Major Honors. I am about to finish my Master’s with Distinction. Did I mention I am working on a dual master’s? So, I finish the first one this May, and I should finish the second one next May. So, even after two degrees, I am still applying to scholarships. I am actually about to sign off to complete a scholarship application due tomorrow. Hope this helps! If you need any more advice, leave a comment or email me. Even if you are reading this 1 year from now, I will still reply :)
SavvyFinancialLatina