March 2018 Navient Review

Hello and welcome to our March 2018 Navient Review! It’s been a weird month. I didn’t do too much work for Shipt this month because I was getting overtime left and right at my full time job. When I take in to account the cost of gas and the time spent shopping and delivering an order, I come out way ahead getting overtime hours at my full time job.

That being said, I did catch a few shops here and there.

March 2018 Breakdown Image

2/9/2018

  • $573.12 Excess Tax Savings
  • Sent $310.81 to Navient #9. Paid in Full!
  • Sent $275 to Navient #1

I also cashed in my Shipt Income Tax Savings since I got a refund! This resulted in a huge payment that got rid of Navient #9 once and for all! Now the attack starts on Navient #1.

2/9/2018

  • $56.54 Paycheck
  • $16.96 Saved for Taxes
  • Sent $25 to Navient!

2/16/2018

  • $47.85 Paycheck
  • $14.36 Saved for Taxes
  • Sent $25 to Navient!

3/2/2018

  • $51.16 Paycheck
  • $15.35 Saved for Taxes
  • Sent $25 to Navient!

Recap

I sent a total of $660.81 extra to my student loans for the March billing cycle, and reduced my loans a total of $673.05! Not bad at all.

I know I said last month that I was hoping to get back in to the swing of things, but we had an unexpected turn of events at my full time job which resulted in me being needed there so I didn’t have much time for Shipt at all.

I am hoping in the future to start making around $100 per week again so I can continue getting these debts paid off!

I have also decided to clean out my cash tips jar quarterly so we will see those payments 3/31, 6/30, 9/30, and 12/31.

Thank you for reading!

XOXO,
Dolores

March 2018 Statement of Net Worth Update

Hello, and welcome to our March Statement of Net Worth Update! I’m a little late this month because I have been so busy at work, but we have a couple of exciting changes going on this month that I’d love to share with you. Just keep reading!

March 2018 SNW Breakdown Image

ASSETS

There were quite a few decreases in our assets this month.

House – We are never really worried about when the house value falls a bit here and there. The house across the street from us is being foreclosed on so we will see if that affects us in the future.

Dodge Dart – I downgraded the condition of our Dodge Dart from “very good” to “good” since I was in a wreck with a deer last October, and it has had a couple of run ins with runaway grocery carts at my husband’s old workplace.

Savings – Taxes – I withdrew the savings in this account as we didn’t owe taxes this year. I sent the extra money to Navient.

HSA – This is a new asset account! I mentioned in my last post that my husband has some medical concerns that we have been ignoring, and since being wiped out by medical bills is a huge fear of mine, I decided we would start tucking money away here. The goal is to get the savings up to our combined deductibles ($4,250), and then anything extra we will invest. I guess we are jumping the gun a little bit in to retirement savings, but this makes me feel better about my fear of medical bills.

LIABILITIES

No increases this month! I remember when I used to have a goal that we would see no increases in liabilities, and now it is expected that there will be no increases.

We do have some larger than normal decreases which I will highlight below.

Personal Loan – In March I estimated that we would have an additional $500 – $750 to send to our smallest debt. We actually had $400 which I sent to our personal loan along with the minimum payment.

Navient – I was able to pay off one of my student loans with our Savings – Taxes account mentioned above. The overall balance decreased $479!

Planned Debt Payoff/Life Update

Here are the changes coming up this month that may result in some challenges.

My husband starts a new job this month! At the time of writing this, his first day is tomorrow. We negotiated his salary 41% above his original offer. That sounds super impressive, but the original offer was sort of insulting. The drawbacks of the new position is that he now will have a 30 minute commute while in training and his paychecks are biweekly now. The latter shouldn’t be an issue since we haven’t lived paycheck to paycheck in quite a while but still, it’s different.

Another drawback is now he won’t have medical insurance until 30 days from March 12, but a good side of that is that he was on a high deductible plan at his last position, so with the life changing event we can get him in to an insurance plan that better reflects our needs.  But, that higher coverage insurance will likely cost more at the new job than the HDHP did at his old one, but that’s just conjecture at this point and not really worth debating since he needs better insurance.

This could change our HSA savings goal as well. Remember, the goal is the sum of our deductibles and anything extra invested. Higher coverage may mean less deductible. We will of course look in to what we expect to spend and estimate which will help us come out more ahead.

At the end of March, I estimate we will have an extra $375 to send to our smallest debt.  Here is our updated debt snowball for March 2018

  1. Personal Loan – $1,506 (9.5% interest rate)
  2. CP Visa – $3,746 (9.5% interest rate)
  3. PMI – $5,127

I hope that we have closer to $400 extra to send, because together with our minimum payment we could get our personal loan below $1,000!

Conclusion

We increased our net worth by $1,058 for a total net worth of $(37,350)! How’s that for a nice round number?

Please don’t forget to follow me on Instagram for daily updates on our journey to a positive net worth.

Thanks for reading!

XOXO,

Dolores

Addressing My Biggest Fear: Financial Ruin Via Medical Bills

I am an unusually healthy person and only go to the doctor for annual checkups. I rarely get sick and I have a high pan tolerance so when I do get sick or injured (think: The Haunted House Incident), I often muscle through it. It’s a source of pride for me if you can’t tell. This makes me a perfect candidate for a High Deductible Health Plan.

My husband however is not so lucky. He has a medical condition that has been ignored for years: a dangerously low heart rate. Recently, he failed a physical because of it. His heart was beating a mere 32 beats per minute, and he was advised that he is at Stage 2 of having a heart attack. Stage 3 is heart attack and possible death. He went from getting a standard physical for an exciting new opportunity to a scary reality check. We cannot ignore this anymore.

I dealt with this news by becoming angry which is my usual method of adjusting to a stressful situation: Anger, Defeat, Acceptance, and then eventually Planning.

To be completely honest, this has always been my worst fear since starting out becoming financially secure, attaining good credit, and buying a home.

I am reading a book called The 9 Steps to Financial Freedom by Suze Orman, and she advised us to address what we are afraid of. I am afraid I’m going to lose everything. The one thing I see that could wipe us out is a medical emergency resulting in medical bills we can’t afford, debt, collections, law suits,  bad credit, financial ruin, AH!

My husband and I ran numbers a few years and found that we were both better off paying for our insurance individually. Since I enjoy good health, I have been part of a HDHP for a couple of years now. In 2017, I contributed $500 to my Health Savings Account in order to get a maximum $250 match from my employer. I used the savings for medical, dental, and vision bills for my family, and any bills above the $750, I contributed after tax dollars and deducted that from our income at tax time.

Even though I am the only person covered on my plan, I am still able to pay for bills for my spouse and my dependents.

Knowing all of this, and having this medical scare for my husband brought out the planner in me.

I have mentioned before that every debt free journey is going to be personal because we are dealing with personal finance. This is another way that I am tailoring our debt free journey to our specific needs. A medical emergency scares the living daylights out of me. I don’t want to hide anymore. I don’t want my husband to go on pretending he is healthy only because his condition hasn’t become serious enough to affect his daily life yet because in reality, eventually it will and waiting will only make it worse.

We are going to do what we can with what is available to us and start preparing for the bills that are coming as he gets his work up done by his cardiologist. I’m going to decrease my take home pay in order to increase my HSA contributions.

I have read that a good rule of thumb to contribute each year to an HSA is the amount of our deductibles. My deductible is $1,750. His is $2,500. Yes, that’s right. My unhealthy husband is in a high deductible plan. We will have to fix that coming up! More about that later.

Since I am the only one covered on my HDHP Plan, the most I can contribute is $3,450 even though our deductibles add up to $4,250.

Now, I know that we could use that $3,450 a year to pay off debt and keep going on our merry way, but like I said this medical issue needs to be addressed and it needs to be worked in to the budget. This is how we are going to do it. Maybe it’s a little wacky, a little doomsday if you will, but it makes me feel worlds better. We will be adding the HSA balance as an asset account in our Statements of Net Worth Updates beginning in March 2018.

Here are some notes from a little research I have done.

HSA Notes

2018 limit is $3,450. After age 55 you can contribute $1,000 catch up.

Only I am covered on my HDHP, but I can pay for medical, dental, and vision bills for my husband and children. Hearing is covered as well.

Unused money rolls over year to year and is able to be invested once your account exceeds $1,000 (I plan to keep the amount of our deductibles as a “cash reserve” before investing in a mutual fund).

If I leave the plan, I still own the money but I can’t contribute any additional funds.

All contributions (matches from employer, gifts, after tax additions, and pretax additions) all count toward the maximum annual contribution.

After age 65, you can withdraw the funds for any reason just like a 401(k).

I am not eligible for an HSA if I have other insurance in addition to my HDHP.

A Happy Ending

Remember that failed physical? Well, the cardiologist declared my husband healthy enough for the opportunity which brought him to the Medical Center for his drug test and physical in the first place!

He has a new job training to be a manager with a competing company. This is a life changing event, so you can bet your bottom dollar I will be pouring over his medical plans and not letting him go in to a HDHP again!

I hope you learned something from our experience and my notes above.

Thanks for reading.

XOXO,

 

Dolores

I Bought This Car for $4,700! Here’s How I Did It!

We got really lucky finding such a great deal. But a lot of the work wasn’t luck at all but preparing ourselves for the future.  I knew I was coming in to the market for a replacement vehicle so I started looking early and often which allowed me to be able to jump on a great opportunity when I saw one.  I will tell you the steps below of how I set myself up for success to research and negotiate a great deal for the car we bought. These tips and tricks are available to YOU.

Before we get started, a disclosure: No, we did not pay cash. Even though that could have gotten us an even better deal, we are not quite there yet in our financial journey. That is why anyone and everyone can use these steps.

  • Educate Yourself

I knew that I was going to be in the market soon for a replacement vehicle so I started educating myself on all things related to car purchasing. In the Millionaire Next Door I learned that most millionaires don’t buy new cars, they buy cars that are typically 2-3 years old. The reasoning behind that is that a car loses much of its value in the first year of ownership. According to https://www.edmunds.com/car-buying/how-fast-does-my-new-car-lose-value-infographic.html A new car loses 11% of its value as soon as it leaves the lot. In the first 5 years it loses 15-25% each year. After that period, the depreciation slope evens out to a less drastic loss year-by-year. Millionaires feel that they are letting someone else pay the cost of depreciation. When you take in to consideration that many car loans are more than 5 years long, it seems as though buying new cars can quickly become an endless cycle of trying to get out from underwater on a car note.

Research the car you are looking at buying. Get in touch with others who own the vehicle and get their opinions of it. Kelly Blue Book and Edmunds are great sites for researching vehicle ratings by their owners. Start your search early. Making an important decision like this should not be rushed, because decisions made in haste usually come with costly mistakes.

Also, be sure to look at what your car will be worth if you were to sell it privately. That is the value I record in my net worth statements. When we bought our Dodge Dart from a dealership, I failed to do this. I looked instead at what the price was for this car when it is being sold at a dealership. The dealership price is marked up thousands of dollars over what you could pay with a private seller. We negotiated this loan as well and I thought we did well until I plugged the correct number in my net worth statement. We are still $2,000 underwater on this loan!

But that’s okay, it’s a learning process and we’re getting better at it.

  • Obtain Financing

Unless you have cash saved up for your car, obtain financing preferably from your local credit union. We secured financing at a 3.49% interest rate. This backfired a little because we did travel to find our car. If we had gone ahead and used the credit union’s financing, we would have had to go test drive the car, negotiate, go back to the credit union for the check, and go back to the seller to give the check to them. That would have been a little annoying as the car we wanted was a 2 hour drive away.

Having the financing set up lets the seller know you are serious, and the dealership we went to was impressed with the rate we were given so they knew that we were good candidates to negotiate with.

  • Expand Your Horizons

You can’t count on the stars aligning and the car with the perfect miles, perfect price, and your dream make and model being located right in your city. If you want to find a really great deal, expand the miles of your search. Again, Kelly Blue Book is a great resource for finding vehicles for sale in your specified search area and being sold by both private sellers and dealerships. I even searched eBay a few times at my coworker’s suggestion. He bought his car from eBay.

Be sure to utilize the price you found in Step 1 for the price you are willing to pay for your new car.

  • Negotiate!

Never pay the asking price of the vehicle! A 10% discount is a good starting point for negotiating. This car was being sold for $4,990. I wanted to get it for $4,500. Here’s how negotiations went.

Dealer: This vehicle was in an accident. We paid $2,000 for this car and we put in $2,700 in repairs so we are only making a couple hundred dollars profit.

Hubby: The price of your repair is what a customer would have paid to repair the car, that’s not the dealership’s price of repair. We want it for $4,500.

Dealer: $4,900.

Me: How about we let you run our credit*, and if you can match our 3.49% rate we will get it for $4,500.

*This is an interesting point. I learned this when I was researching how to get the best deal before I was ready to buy a car. Dealerships get kickbacks for running your credit. If you let them run your credit, that’s worth a price so negotiate that as well! Especially if you have a great score!

Dealer: $4,800 at 4.49%.

Hubby: That’s a whole point more of interest! If we go ahead with your financing you need to come down on the price.

Dealer: $4,700 @ 4.3%

This was the end of our negotiation. We are extremely happy with the purchase, and plan to refinance with our credit union in a few months to get our 3.49% interest rate with them.

I hope you learned something and will use these steps when making your future car purchases as well!

 

February 2018 Navient Review

Hello and welcome to our February 2018 Navient Review! Our balances decreased by a huge portion this month. Not only was I able to pay extra, but I became eligible for a rebate program which paid a portion of some of my student loans for me! The amount was equal to about $1,400 in addition to what I paid each week. That helped a lot!

But, I’m confused again. I am not sure which payments actually posted this month because of how Navient bills customers. I’d like to be able to see each individual payment posted on its dates, but they lump it together as one sum and then the credit I mentioned above was included with my payments in that as well.

So, here is a list of the payments I have made. I feel like the 1/3/2018 may have been applied in January since my bills cycles go through the 6th of each month.

February 2018 Breakdown Image

1/3/2018

  • $113.00 Cash Tips
  • $33.90 Saved for Taxes
  • $75.00 Sent to Navient!

Remember the cash tips that I’ve been stockpiling? I asked on Instagram if my followers thought it would be appropriate to take the cash out, save 30% like usual, and then send the rest to Navient. They were cash tips received in 2017, so I need that information for the IRS anyway! The overwhelming consensus was yes.

01/05/2018

  • $131.71 Paycheck
  • $39.51 Saved for Taxes
  • $20.00 Gas
  • $75.00 Sent to Navient!

01/12/2018

  • $92.79 Paycheck
  • $27.84 Saved for Taxes
  • $25.00 Gas
  • $50.00 Sent to Navient!

The small paychecks are starting. Truth be told, I miss sending in those big payments. $50 is definitely a respectable amount, too! I decided that when I’m in between $25 and $50 to send to Navient, I’m going to go with the closer amount. For example, $92.79 – $27.84 – $25.00 = $39.95.$39.95 is only $10.05 from $50.00 and $14.95 away from $25, so I went with sending a $50.00 payment and made up the shortage with spending money in our checking account.

1/19/2018

  • $96.31 Paycheck
  • $28.89 Saved for Taxes
  • $30.00 Gas
  • $50.00 Sent to Navient!

1/26/2018

  • $33.64 Paycheck
  • $10.15 Saved for Taxes
  • $15.00 Gas

This was an abnormally small paycheck. My daughter has been on an extended winter break at her school, and this paycheck reflects her first week back at school. When she is in school I would put myself on schedule for 7p-8p and that would work out just fine. For some reason, this week I had anxiety about being able to drop her off at home and getting to the store in time to do a shop. All in all, I just had a hard time getting back in to the swing of things.

At the time of writing this, I’m at the tail end of her second week back at school and the 7p-8p window is working just fine just as it always did. I am still sticking with my vow to spend more time at home making sure all is well here, so I only go on the schedule Mondays, Fridays, and Saturdays which are the busiest days aside from Sunday.

However, my Saturdays are going to be a little shorter for the next few weeks because I am working Saturday mornings at my full time job to get caught up on thing there and earn over time. The over time I earn at my full time job goes toward my smallest consumer debt.

2/2/2018

  • $54.83 Paycheck
  • $16.45 Taxes
  • $15.00 Gas
  • Sent $25 Extra to Navient!

My funk is continuing. I am finding that only working on Mondays, Fridays, and Saturdays are leaving me with really small paychecks. I want to get back in to the old swing of things again, but not so much that I am never spending time with my family.

Right now the weather isn’t so hot, and daylight savings time has me delivering groceries in the dark in the country to unplowed roads. I just haven’t been wanting to commit to the struggle lately.

I think there’s light at the end of the tunnel. After a snow storm left us with about 7 inches of snow, in a few days’ time the temperatures will be in the 40s with rain. And we move the clocks forward March 11th, so soon I won’t have to deliver in the dark anymore. Shipt is so much more enjoyable in the warmer months.

Recap

We knocked Navient #9 down to $310, and reduced our overall balance by $1,617! Hopefully in March I can pick up more deliveries and get back in to the swing of things.

Thank you for reading and following along!

 

XOXO,

 

Dolores

February 2018 Statement of Net Worth Update

Hello and welcome to our February 2018 Statement of Net Worth Update!

Remember last month when I said that I could enjoy having only 8 liability accounts for a couple of months? Well, I found a great deal on a car that I loved so we went ahead and purchased one early!

You guys would be proud of me. I researched the KBB value of the value of the car as a private party sale before I bought it. This is the value that I assign to cars on our Net Worth Statements. When we bought the Dodge Dart I mistakenly looked at the KBB value when buying from a dealership and compared that amount to what we were paying and thought we were getting a good deal! Then, when I added it to our Net Worth Statement I found us once again thousands of dollars under water. Not this time! Not only did we get a great deal on a car that I am absolutely smitten with, the purchase of it actually increased our net worth. We are getting smarter and smarter with each car purchase. Keep an eye out for a future post depicting how we got our 2012 Chevy Sonic for $4,700!

February SNW Breakdown Image

Assets

You’ve already learned a little bit about the star of the Asset show, our new Chevy Sonic. I adore this car. I’m absolutely in love.

The only asset that decreased this month was the Dodge Dart and that’s mostly because I had been guessing at the mileage in previous statements. I took note of the actual mileage and I found I was off by about 5,000 miles! I corrected it and we had the huge decrease reported. I am going to check in every month to see what the mileage actually is before reporting from now on.

The Savings – Taxes account will be zeroed out on our next Statement of Net Worth because we didn’t need the savings at all. We got a refund! So this money will be going toward Navient.

Liabilities

Again, the star of the show is the new Sonic account at $5,000. I am so happy that under the Assets column the Sonic is worth $505 more than the liability. For the first time ever I am not upside down on a car loan.

The loan term is 36 months at 4.3% interest. This is a little higher than I’d like to pay, and higher than the financing we had set up through my credit union (3.49%). But it was part of the negotiating process, and we can always refinance in a few months with our credit union. In fact, I think that we can get our credit scores even higher and maybe qualify for an even lower interest rate than originally offered to us.

The interest rate on the Dart loan was 3.99% at our credit union.  Since we were approved for the Sonic at 3.49%, they went ahead and did a one-time interest rate reduction for the Dart and brought it down to 3.49% as well. So, we should start seeing a slightly larger decrease in this account each month going forward.

Another unexpected change happened over on the Navient account! Check out that decrease of $1,681! No, I didn’t make that much extra to send from my Shipt paychecks. I only paid about $200 extra! It turns out that I signed an agreement stating that if I made my first 12 payments after graduation on time, a certain portion of my loans would be forgiven! Hooray for responsibility!

Planned Debt Pay Off

In January 2018 I stated that I thought we would be able to pay about $1,000 extra to our Personal Loan, but the process of purchasing our car cost us a lot of money:

  • $52 Oil Change for Lease Return
  • $108 on Used Car Inspection
  • $159 Car Detail for Lease Return
  • $253 Partial Payment of Tax, Title, and Plates on Sonic

After parting with all that money, we were left with $200 extra to send to our Personal Loan account. A far cry from $1,000 but it’s something and I think it’s understandable! I am proud of us nonetheless.

Here’s our updated debt snowball for February 2018

  1. Personal Loan – $2,037 (9.5% interest rate)
  2. CP Visa – $3,825 (9.5% interest rate)
  3. PMI – $5,252

At the end of February I estimate that we will have about $500 – $750 extra to send to debt. I look forward to checking in and reviewing the actual amount we were able to send!

Conclusion

We increased our net worth in February by $3,940 for a total Net Worth of (38,408)! We are getting closer and closer to becoming worthless.

Please don’t forget to follow me on Instagram for daily updates on our journey to a positive net worth.

Thanks for reading!

XOXO,

Dolores

 

I Want To Be a Landlord! So Why Don’t I Study How?

I read once that to become an expert in any subject you should read 7 books on the matter. Since reading that quote, I have made reading personal finance books as important of a goal as making and saving as much money as possible.

Owning rental properties is a pin on the map of how I plan to become a millionaire before I retire.

That map looks like this:

  1. Contribute to Employer Matched 401(k) Plans
  2. Eliminate all debt with higher than 4% interest rates
  3. Save for retirement
    1. Buy Rental Properties
    2. Max out Roth IRA contributions
    3. Max out 401(k) contributions

Step 1 has been done for a while now. You may have noticed that I have talked in depth about Step 2, and nothing at all yet about Step 3. In fact, Step 3 is very murky because I haven’t studied these goals at all. If I want to be a landlord, why haven’t I expended the same devotion to learning how as I have with my debt free journey?

The One Thing

“What is the one thing you can do, such that by doing it makes everything else easier or unnecessary?” That is a line you will hear time and time again if you have delved in to the subject of mono-tasking as told by Geoff Woods, Jay Papasan, and Gary Keller. I have learned  a lot from listening to the podcast called The One Thing, the most important of that being that I do not yet have the right to adjust my laser focus from the one thing that I can do now (get out of debt) to what I want to do later (buy rental properties).

I do not allow myself to get in touch with the real estate agent to ask about rental properties being sold in my area. I don’t go looking on Zillow for potential homes. I don’t contact my chosen property management company that will be getting our business in a few years. All of these things if done right now would only distract my focus from my One Thing which is getting out of debt.

Thinking Forward

I am not heading in to my future completely blind. I have an idea of what I would like to happen after I am out of debt, I just don’t actively work on those things.

Once I have paid off all the debt has higher than a 4% interest rate, I will then start reading books on becoming a landlord while I save up money for the down payment on our first rental property. Even though I haven’t yet earned the right to even think about buying rental properties, I do have a list of books that I would like to read once I decide that I have earned the right to do so:

  • Retire Rich with Rentals
  • Real Estate Investing Gone Bad
  • Investing in Real Estate
  • Hold – How to Find, Buy, and Rent Houses to Produce Wealth
  • First Time Landlord

I have a long list of books that I want to read regarding self-improvement and personal finance as well. Self-Improvement may seem like it would also be a distraction from personal finance, but I think the self-improvement books help me to live a happier life which will help me make more money for a longer period of time which helps me get out of debt. Here are some of the self-improvement books on my list:

  • The Power of Nice
  • The Miracle Morning
  • The Power of Habit
  • Moon-walking with Einstein
  • You Only Live Once
  • Man’s Search for Meaning

Personal finance keeps me inspired and focused on the goal at hand. Here are some books from that list:

  • Secrets of the Millionaire Mind
  • Automatic Millionaire
  • The Two Income Trap
  • The Millionaire Teacher
  • I Will Teach You to Be Rich

I share my favorite quotes from the books I’m currently reading on my Instagram page (@networthnegative). I decided to share them on my blog as well, so look out for these posts. I will name them “Lessons I Learned from The Richest Man in Babylon” or maybe “Favorite Quotes from Rich Dad Poor Dad”

I started to write a post like that tonight but I thought I would first share my modus operandi to becoming not only net worth positive, but a millionaire as well. I’m looking forward to these posts!