Month: January 2016

Savings Plan/ Debt Pay Off!

Hello Lovely Savers!

savingsjar

In previous posts I’ve talked about my savings jar, which is quite literally a giant jar that I keep next to my bed. I throw all of my loose change and bills in this jar, and after a few months take it into the bank to put into my savings account. When I was waiting tables, the cash that I didn’t set aside for my envelope system, all went into the jar. This would add up really quickly, which was really great and motivating to be able to see the jar filling up. Due to some “life happening” the savings had been pretty depleted by the end of 2015.

After graduating, I took an unpaid internship with a local theater, which I didn’t plan to stay in for long but couldn’t find a full time job to save my life. I was working part-time for my favorite theater, The Southern Theater in Minneapolis, but that wasn’t really paying the bills. Aside from “the bills” I wanted to pay a significant amount on my student loans each month, which left nothing for saving. Eventually my internship turned into a full-time temporary position, which really helped me start putting some money away again. When my car started to die, I was able to sell it to a family member for cheap, and buy a great used car for cash!

Then, of course, more “life happened” and my savings was practically gone AGAIN. I understand that this is why we save, “life happens” and the savings is there to protect us. However, I’m pretty obsessed with watching my bank account, and I like to have a full savings account. So around November, I was on Pinterest, looking up different savings plans and seeing how I could put away my very small paycheck to where I wanted it to go.

The plans I found were great! Very easy, very doable, and very small results over the course of a year… Wasn’t good enough for me. So I made up my own, a very doable, very steady way to save over the 52 weeks and in the end I would come out with over $11,000.00!

SandS money chart

This plan worked for several months, but I wasn’t making my progress toward my loans like I wanted. I reevaluated where my money was going, according to Dave Ramsey you are only supposed to keep $1,000 in your savings account and the rest goes to your debt pay-off. That sounded awful! What if I needed it? What if there was an emergency?! It was true that I couldn’t think of an emergency that would come up that would be likely over $1,000…. but still! What if someone kidnapped my adorable German Shepherd, Fern, and demanded I leave the ransom in a duffel bag in the park under this tree marked by a temporary tattoo and they were demanding $1,001?!?!?! Well then I thought about it and figured I could find an extra dollar in the couch cushions and borrow a duffel bag from my parents. (Why do parents always have a million duffel bags?)

So I continued on with my savings plan, but instead of putting the money into my savings account, I put it directly toward my smallest loan and celebrate as I watch it get smaller and smaller!

I am a very visual person, so I also made up charts like this to fill in as I pay off my debts. As it gets closer to the top, I know I am moving towards being debt-free!

Sand S debt chart

I know this plan is a HUGE commitment. I am ready to tackle my debts and I’ve been able to work out being able to put this much away each month, I am also lucky enough to be living at home while doing this and therefore have the freedom to put that much toward my goals. However, there are much smaller and slightly easier to chew plans on pinterest. These calculations were based on a combination of several of those and my own finances.

Coming up, I’ll be posting how I budget each month, on a variable income. I’ll also be keeping you all posted on how this plan is working!

Sugar and Savings,
xoxo Taylor

Cash Envelope System in a Non-Cash World

So anyone who knows me, knows that I am slightly obsessed with my personal finance (She writes on her personal finance blog). I also happen to be pretty obsessed with Dave Ramsey, he is a personal finance- get out of debt- live debt free guru! I listen to his podcast pretty regularly while at work, and I was even featured on his radio show back in September! I’ll talk about that more in another post I’m sure.

I don’t agree with all of Mr. Ramsey’s ideas and opinions, but I started listening to him after I saw a pin on Pinterest listing his “Baby Steps” to getting out of debt. It’s a great tool he focuses on in his own teachings, and I loved the idea!

babysteps

He also tells his followers to cut up their credit cards and live entirely through cash transactions.

Which is not really possible. In fact, let’s just say it, it’s not!

But he doesn’t mean, you should only ever carry cash, and shouldn’t use debit cards- YOU HAVE TO. It is not realistic to pay bills via cash, you have to pay them online, or at the very least by check. What he means, by cash, is no credit! You can only pay for things that you have the money to pay for at the time you want to pay for them. New car? No loans. Going out to dinner? You better have money in the bank for that. This is obviously a very simple way of looking at a large problem, but it is designed this way so that people who HAVE issues with credit cards can kick the habit and get themselves out of debt without creating more debt in the process.

He has a cash envelope system for the things you CAN pay cash for. Each month you take out the money you have budgeted for specific things: Groceries, Gas, Pets, etc. Once the money in the envelope is out- it’s out! No more of whatever that was! It really helps to show where your money is going and helps you not make impulse buys. I even followed this plan while I was in college, not perfectly mind you, but it was easier because I was waiting tables and had cash on hand all the time. My paychecks were put in the bank, I used a certain amount of budgeted cash tips to put in my envelopes, and the rest went into my savings jar!

However when I graduated, I promised myself I would try to hold off on serving, and find a job in my desired field. It’s harder to use a cash system when you use plastic to pay for everything!

Thus, MY envelope system was born!

I’ve been using my system pretty successfully for the last month. Instead of cash, I use printed monopolyish-cards that have cash values on them and put them in my designated areas.

envelope systemcategories  putting money in category

Once the section is empty, I’m done for the month!

I also have sections for my check card, my credit card, and my business card. When I use my check card to pay for groceries, I take the cards out of the groceries section and put them into my check card section, likewise for gas on my credit card and so on. If I use my check card to buy something for my business (if/when I leave the right card at home on accident 😛 ) then I put the cards into that section so I know to transfer reimbursement funds later.

This has been a pretty important group of sections, for most banks these days, they require you use your cards at least ten times each per month to avoid fees! Is that ridiculous? YES. And that’s why using all cash wouldn’t work, you would be charged fees for not using your cards. To make this system work for me, I try to remember to move the cards into the right areas as soon as I make a purchase, but I’m certainly not perfect and I do reconcile with my budgeting system when I go update that. I’ll have a post about my online budgeting spreadsheets soon!

This has been my envelope system, let me know if you also use a modified cash envelope system! I’ll make a post about all of your ideas as well!

Sugar and Savings,

xoxo Taylor

Debt Breakdown

In the effort of transparency I am going to breakdown all of my debts, from where I started to where I currently am. Like I said in my intro blog, I didn’t realize how much student loan debt I was actually acquiring while trying to pay for schooling, BUT I am particularly glad that I did not have a credit card during school (“Oh no! But you need credit to have good credit!” -Hush. I will get to my VERY good credit score in another blog post). I watched many of my classmates fall further and further into debt because, when you are broke in college, it’s real easy to just “charge it”. Thankfully, I was terrified of doing that, so I didn’t.

Here is the breakdown of the loans:

(These are the totals of each type of loan over the course of the 3 and a half semesters)

SELF Loan $32,000.00

This is obviously the biggest amount in one single type of a loan, this is the main loan students can get by themselves in Minnesota. There is a $10,000/year limit with a SELF loan but the rates are pretty great, I have a 3.03% variable rate on all of them. These were all from FirstMark Services.

 

Ford Federal Un-subsidized Loan $5,447.00

This was a loan presented to me through the school I attended. After you filled out a FAFSA for each year, they would send you what you were “awarded” (LIES.). I would be “awarded” a few small “grants” and “scholarships” which barely covered my books, and then I’d also be “awarded” the ability to accept these special loans! Which were “a great deal”, I was assured. Here’s the thing though, I’m not a loan officer for a bank- I don’t know what subsidized, or un-subsidized means. I don’t understand all the fancy jargon hidden in the fine print! I still don’t, sorry I can’t actually help you with that.

 

Ford Federal Subsidized Loan $16,323.00

Same as above, but for some reason this is significantly more. I don’t know why that is, but it leads me to believe it is the more evil of the two.

 

Parent PLUS loan $5,000.00

This loan we tried to avoid, I didn’t want to involve my parents anymore than I had to. Obviously I had to to a certain extent, your parents have to co-sign on loans, but I was very determined not to put strain on my family. I only applied for this loan with my mother after it was suggested I take an online class through ANOTHER campus so that I could move into the upper division courses for my minor and thus graduate at my desired time. At no point did either campus alert me to the fact that I would be charged for the class, online fees, and a “campus fee” for a campus I (to this day) have never set foot on! I received an email over the Summer I took that ONE class, saying I owed the other campus $4,000.00 and needed to pay them by the end of the week. I was a hard worker but I didn’t have $4,000.00 cash, just laying around, burning a hole in my pocket. Hence, the dreaded call to mom and dad “I need money…”.

All in all: $58,770.00 and my darling, amazing, loving parents, are not making me pay back the $5,000.00 parent loan.

My personal debt total in 2014: $53,770.00

Ouch. Since graduating December 18th, 2014, I consolidated the subsidized and un-subsidized loans through Great Lakes, a consolidation group. I also paid off a baby SELF loan that I had taken out for my last semester of school and I am officially down to $48,545.99!
Over the next few blogs I’ll be talking about how I do my personal finances, what I do when “life happens”, and my plan to pay off the $48,545.99 in the next 6 years!

Sugar and Savings,

xoxo Taylor

This entry was posted in Debt.