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Author: xxannxx Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308782  
Subject: updated plan Date: 11/27/2002 10:40 PM
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Okay, I lied. I was doing some last-minute finagling before I leave work for the day, and I realized that I have most of my December plan in place. So instead of waiting, here it is!
Monthly Net Income      6756.48                
Monthly Expenses 2760.62 (2095 is rent)
Debt mins 956.73
Freedom Funds** 1344
Leftover 1695.13 (to efund)

A few things…

My Freedom Fund contribs are high this month because I'm front loading gifts and travel.

I've managed to work it so that I'm paying off my Amex (this month's regular purchases) by the end of this month, so I'll have a “clean slate” for next month. I'll record anything I charge to the Amex immediately, and hopefully that money will be covered by what's in my newly formed Freedom Funds. It was definitely tricky beginning to fund those and catch up with Amex; it meant that my contribution to my efund was really low this month, but it feels good to have them in place.

And despite the fact that my standard work week is 50 hours (leave my house at 8:00am, get home between 8:30/9:00pm), I've been inspired by Wild and other Fools to get a second job. I'm going to work weekends through the holidays (or until I turn into a stark-raving lunatic) so that I can get that efund in place!

My debt, as you may remember, is:
Citibank       13,733.86  2.90%
Student Loan1 788.61 5%
Student Loan2 7,513.91 7.50%
Student Loan3 17,435.58 4.61%
Car Loan 5,753.62 6%
45,225.58

I've decided to snowball the car first, because I can have that paid off by September (when I could possibly become unemployed). And then I can sell it if I have to.

Credit card second, because I just can't stand it. And if I get into real trouble, I can get forbearance on my student loans (thanks for pointing that out, uwalum), but I won't be able to do that with my credit card. My 2.9% is through April, and I'll do some BT hopping when that expires, but I just want it gone.

If I can stick with this, I'll only have Student Loan 2 and 3 left by the end of September. Completely out of debt by June 2004 (if I'm still employed).

Other things…
I've reduced my contribution to my son's 529 from $200/month to $50/month.
I'm going to think some more about upping my retirement contributions. Maybe if I can find a reliable 2nd job (that allows me some time off so I can play with my boy; I hardly get to see him at all during the week because I work so much), I could pump that money into retirement. I don't know. Have to mull this one over.
My net income is going to decrease in January. I reach the max limits on Social Security and CA State SDI by the end of summer usually, so my take-home pay goes up towards the end of the year. I should be getting a cost-of-living raise, but those usually don't kick in until March or so. I haven't done the calculations yet, but the difference before my potential raise will be about -$100/week.


I think that's about it for now. I'm looking forward to next month when I can update on how it all worked out.

Comments/suggestions are always welcome!
Xxannxx
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Author: gladiame One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 146194 of 308782
Subject: Re: updated plan Date: 11/28/2002 1:34 AM
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Student Loan1 788.61 5%
Student Loan2 7,513.91 7.50%
Student Loan3 17,435.58 4.61%

Hi,
Have you looked into consolidating these student loans? Right now the rates are very favorable (under 4%). Plus, Uncle Sam offers a further .8% reduction for on time payments, and another .25% reduction for auto pay by electronic debit. So you can reduce the interest to below 3%!
Since Loan 1 is so small, it may be advantageous to exclude it from any consolidation, and just pay it off in a short time span.

Congratulations on making such fine progress. I find these updates very encouraging!

Glad


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Author: callteresa One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 146197 of 308782
Subject: Re: updated plan Date: 11/28/2002 6:55 AM
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2095 for rent?

gee I only pay 600 month for a house payment, but houses only cost about 60,000 here.

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Author: daisy4125 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 146228 of 308782
Subject: Re: updated plan Date: 11/29/2002 9:44 AM
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Have you looked into consolidating these student loans? Right now the rates are very favorable (under 4%). Plus, Uncle Sam offers a further .8% reduction for on time payments, and another .25% reduction for auto pay by electronic debit. So you can reduce the interest to below 3%!

This is not necessarily true. Consolidation loans are generally based upon the weighted average of the current rates on the loans being consolidated. You won't get anywhere near the currently low variable rates if the rates that you've stated are fixed. Also, I'm pretty certain that the upfront .8% reduction was only available to those who consolidated within a certain period of time that ended over a year ago. Some consolidation loans do offer incentives after 4 years of on time payments though.

The .25% reduction for the automatic debit is definitely worth signing up for right away. The Paying Back Student Loans board has lots of excellent information and helpful posters:

http://boards.fool.com/Message.asp?mid=18190151

Good luck.

PS - Good move on reducing the 529 contribution. Someone posted a story the other day about playing chess, and how winning in chess is most often achieved through the accumulation of small advantages; the poster then applied this same strategy to achieving financial success/freedom. Consider the 529 reduction as a small advantage - you're on your way!

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Author: xxannxx Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 146454 of 308782
Subject: Re: updated plan Date: 12/2/2002 12:59 PM
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2095 for rent?

gee I only pay 600 month for a house payment, but houses only cost about 60,000 here.


I know. It's ridiculous. A house 2 doors down from me sold for 625K last year, and believe me, it was nothing special.

I do love the Bay Area for lots of reasons, but I think I probably won't stay here much longer because of the housing situation. If I'm going to pay more than half a million dollars for a house (and I don't particularly want to do that), I want it to be pretty spectacular. And that's just not going to happen out here.

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Author: xxannxx Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 146455 of 308782
Subject: Re: updated plan Date: 12/2/2002 1:18 PM
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I'm going to research this a little bit more, but I believe that I'm as consolidated as I can get.

The first loan is directly from Harvard (and almost paid off).
The second loan is from MEFA and isn't eligible for consolidation.
The third loan is a Direct Loan (USDOE), variable rate, already using automatic debit.

I don't think there's anything more I can do with them, but I'm going to start scouting the Paying Back Student Loans board and see if I can find anything.

thxx

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Author: daisy4125 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 146568 of 308782
Subject: Re: updated plan Date: 12/3/2002 2:13 PM
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It doesn't sound like you can do any more consolidating, but it's worth visiting the Paying Back Student Loans board anyhow.

Out of curiosity, what's your interest rate with MEFA? I'm stuck owing them almost 10 grand at 7.85% and they don't even offer a discount for direct debiting.... Argh!

Good luck.

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Author: xxannxx Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 146583 of 308782
Subject: Re: updated plan Date: 12/3/2002 4:46 PM
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what's your interest rate with MEFA

I'm at 7.5%, over 7K right now. It's very annoying that they don't offer any incentives for direct debit.

I was actually thinking of moving it to a "4.9% for life of transfer" credit card (Citibank). The reason I'm leaving my other loans where they are is because I can request forbearance if I get laid off next year. But I don't think MEFA loans offer forbearance. I have to check my paperwork...



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Author: daisy4125 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 146585 of 308782
Subject: Re: updated plan Date: 12/3/2002 4:55 PM
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I remember trying to haggle a bit with the MEFA customer service rep a while back.... I asked what he would give me for making direct debit payments and he laughed and said "the peace of mind that comes with knowing your payments are being made on time."

I would be surprised to hear that MEFA doesn't offer forebearance, but I haven't ever looked into it. I always thought it went with the "student loan" territory.

Good for you on the 4.9% for life transfer. I think I might consider something like that once my CC debt shrinks a bit more...



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