So many updates! Where to begin?
Well, let’s start with the debt, since that’s the reason I started this blog in the first place:
Debt payoff numbers update: Money put towards loans in March: $1000. This amount is my self-imposed minimum monthly payment (my official minimum monthly payment is more like $350 since some of my loans are in the grace period). Let me stress that the $1000 per month is just my current self-imposed minimum and may increase in the next few months after I’ve built my emergency fund back up.
A few people have asked me what my goal date is for paying my loans off, and the answer is that I don’t currently have one. If I continue to pay $1000 per month, it is going to take me about six years, and I sure as heck am not going to let this go on for six years. However, it feels meaningless to just pick a random closer date that has no mathematical basis (end of 2017? End of 2018? End of 2019?). I’m expecting/hoping that I can increase my income substantially within the next year or two, which will enable a faster payoff, at which point I’ll recalculate and set a goal date. But for the time being, the goal date is: A.S.A.P.
Debt payoff emotions update: I’m finding that watching the interest accrue on my loans is more disheartening than I had anticipated. Sending in loan payments feels like trying to bail water out of a boat as quickly as I can, while knowing that the boat has a leak in the bottom and more water is rushing in all the time. I guess all I can really do is pay off as much as possible, especially now when the balance is the highest. I’m also looking into refinancing options, but I want to build up my emergency fund a little before I commit to higher payments each month. If you have any refinancing experience or specific recommendations, please let me know in the comments.
Extra income update: I didn’t make a ton of extra income this month because I’ve been exhausted from my new job. I did participate in one research study, however, which paid me $40, and did one online website review for $3, for a total of $43 in extra income. This means that thus far in 2016 my extra income has been:
January: $455.88—multiple research studies; sold several books/articles of clothing
February: $36.00—one research study; two website review
March: $43.00—one research study; one website review
Stay tuned for my extra income total in April, which will definitely be higher because I’ll be receiving paychecks for freelance work. Oh, and the website reviews are through UserTesting, which I (sort of?) recommend with (many) reservations. I have made a small amount of money through UserTesting, but I also find that I spend a lot of time filling out screening questionnaires for surveys that I ultimately do not qualify for.
Emergency fund update: If you read my post from last week, you know that this was technically a slightly negative number for a few days (oops, my bad!). Since then, however, I’ve gotten paid, paid my rent, paid my credit card, and now have $516.24 in my emergency fund. I would like to get this up to $4000, so that will be an ongoing goal.
Retirement update: In addition to my student loan payments, I’ve decided that I’m committed to putting a minimum of $500 each month towards retirement (split between my 403(b) and Roth IRA). Obviously this slows down my debt payoff. However, I have a lot of anxiety around my retirement accounts, which are extremely tiny because I didn’t really save for retirement in my 20s, and I know I will hugely regret it if I ignore them while paying off debt.
Betterment update: Guess what, I changed my mind about using Betterment, based on multiple reader comments from last week! I do really, really like Betterment—it has a lovely user interface and helped get me interested in the stock market/investing for the first time ever—but it’s probably true that in the long run I will come out slightly ahead by putting that money somewhere else, like towards my student debt or into my Roth IRA. So last week I decided to withdraw the full balance. For the record, I had put a total of $800 into the account and withdrew $823, so I’m going to just go ahead and consider that a win. 🙂
Acorns update: I may have gotten rid of Betterment, but I am still using Acorns. For me personally, Acorns functions less as an investment account and more as a sneaky extra savings account. I plan to use it as a stash for paying random annoying fees that don’t otherwise fit well into my budget. For example, I know I am going to owe $288 in professional membership dues this summer, and my Acorns account, which is currently at $152 and counting, should easily be able to cover that amount.
[I’ve considered using Digit for this purpose instead of Acorns, because it’s not tied to the stock market, but I’m a little nervous about Digit because my checking account balance can fluctuate wildly. If you have experience with Digit and recommend it, feel free to weigh in with a comment below!]
Shoe update: I was able to return my ugly shoes!! I can’t believe it! This update was also motivated largely by reader comments—several people suggested that I might as well try returning them even though I’d worn them outside. So last Thursday I wiped off the soles with a wet paper towel and took them to DSW after work, even though I had no receipt and very little hope…and the cashier was super nice, looked up the purchase in her database using my credit card info, and gave me a refund! Lessons learned here include “Be more thoughtful when making purchases” and “Even if their return policy says they won’t take it back, they might still take it back.”
Car-free job update: I’m doing pretty well navigating my work appointments with no car. And good thing, because I definitely cannot afford to buy a car, lol. In case you’re interested, here are the numbers of steps I’ve taken during recent weekdays (not counting steps taken inside my apartment or office when I wasn’t carrying my phone with the step-counting app):
Monday 3/28: 17,388
Tuesday 3/29: 8,964
Wednesday 3/30: 11,165
Thursday 3/31: 11,863
Friday 4/1: 12,847
Monday 4/4: 17,236 (Most of this day’s steps were taken in an icy, messy snowstorm. Do I get extra points?)
On a related note, I’m no longer considering joining a gym.
I forgot to mention last time that while it’s highly unusual to do this type of traveling work without a car, I do know one person who has successfully done it in the past and one other person who’s doing it currently. So it’s definitely possible—it just takes some planning and organization and willingness to walk through snowstorms and carry stuff around on your back all day. I also rely HEAVILY on the Maps app and MBTA Bus app, especially when I’m in an unfamiliar neighborhood.
Extraneous purchase of the month: I almost didn’t include this part, but I decided that it’s worth noting for the sake of transparency that in March I paid $160 for two months’ worth of in-person Spanish classes and $25 for the corresponding textbook. I realize you may be asking, why not skip the classes, go to a free Spanish Meetup group, and put that $185 towards your loans? It’s a fair question.
The answer is twofold. First, I know myself well enough to know that I’m too busy/tired these days to consistently attend a Meetup, whereas I for sure am going to consistently attend classes that I’ve paid for. I think I’ll get more out of structured classes anyway. Second, while paying off debt is a huge priority for me, I don’t want to allow myself to become exclusively focused on this goal, to the point that I’m barring myself from pursuing other goals, like learning Spanish. I highly recommend Our Next Life’s awesome post What’s Our Money Really For? // There’s More to Life than Future Goals, for more thoughts on balancing financial goals with other priorities and values.
In addition to the classes, I’m also plugging away at Duolingo, my favorite free language learning app. Duolingo’s exercises, by the way, crack me up on a daily basis. Here are screenshots of two of my favorites so far. I’m so glad I now know how to politely ask how someone’s marriage is going. (And FYI, that guy’s cousin is WRONG.)
What’s your philosophy on making extraneous purchases while paying off debt? Can anyone else relate to the feeling of bailing water out of a leaky boat?
Many thanks to all who have commented with thoughts about the shoes or the Betterment issue (and all other topics!). It turns out that being able to crowdsource suggestions is yet another benefit of blogging! 🙂