Wow. February’s report had impact, but I refused to make financial goals for March due to the significant changes we would experience if I passed Security+ the first time. I didn’t know what kind of goals to make because there would be moving and new home expenses, plus everyday life expenses. So, there’s no need to talk about the successes and failures of last month because I considered it all successful. We made it to Colorado; we have an apartment; and I’m working full-time. Mike is searching for a job and that’s that.
Yes, I did pass the Security+ certification test (HOORAY!), and I was absolutely right about all the expenses. Even still, I was not prepared for the significant cost-of-living increases that come with the Colorado lifestyle. See my posts lamenting my bleeding money arteries HERE and HERE.
Now that you have the background, please don’t be baffled or surprised by the massive monetary increase on the Quiksilver card or lack of substantial debt pay-off for the month of March.
As you can see, we paid off a total of -$2579. I’m not letting this deter me. However, it does have me rethinking my recent strategies. Just a few months ago, I blogged about why I would be paying off student loans last. While that still holds mostly true, the last month has been rough on my emotional state and I feel that a quick win is in order.
In the PF world, there’s a lot of discussion about the debt snowball and avalanche methods. The math doesn’t lie – the avalanche method will save you the most money, though it doesn’t always mean a faster pay-off. However, the snowball typically gives quicker wins, boosting that much needed emotional factor that keeps one motivated and excited about paying off debt. Mike and I need this boost.
That’s why I’m considering taking the money we receive from our move and paying off the lowest Sallie Mae loan. You’ll see below that one of the Sallie Mae student loans sits at 4.75% with $1700 left to pay off. That would be an easy, quick win. Plus, it wouldn’t take all of the reimbursements we receive, so we could still put a large chunk on the Discover card and work on getting it down before that 0% rate ends in June.
Here are some other things to know:
The AES Loan’s interest rate increased to 6%.
It doesn’t surprise me. This loan has one of the most fluctuating interest rates I’ve ever seen, and 6% is the highest I’ve ever seen it go. It won’t go any higher than that either, thanks to SCRA benefits. This is all the more reason to transition to the debt snowball for a while. If I could take out the two Sallie Mae loans and the AES loan before the end of the year, I would feel liberated. The interest I can deduct from them on taxes is pitiful anyways. (My Navient loans are the true interest suckers!)
Our emergency fund is still sitting pretty.
And by that I mean, we only took our $1500 to help pay for move-in costs. Yes, I know I could have blown it all on paying off the debt we’ve accrued, as to put on a good front for my readers that we were indeed doing just fine with not spending money, but why lie? And if there’s anything I have learned in the past 2 years, it’s that some form of emergency fund is necessary. I’d rather feel secure about that than looking good on paper to my friends, only to be hammered by some emergency and have to put it on my credit card. Plus, some emergencies don’t allow for credit card usage, so where would we be then? Up the creek without a paddle, that’s where.
I have goals for April, I’m just not making a big production of it.
We will see if the military reimbursements come through in April. If they do, then you know what’s next. I am definitely killing that smallest Sallie Mae loan. I’m going to do my best to kill the Discover card once and for all as well. I’m letting the Citi card ride because it’s 0% until next year and the payment is ridiculously low. Then, I will set my sights on the AES or other Sallie Mae loan. Not sure yet. Just know I have a plan. Plans take time.
We are going to refinance the truck soon. Or something.
We haven’t decided what method we’re going to use yet, but something will be done about the truck in May or June. We want to get some of this debt out of the way first to boost our credit scores a bit more. Then, we’ll be ready.
That was March. Can you feel the intensity? What are your opinions? I would love to hear them.