Last week I talked to you about setting and keeping to a budget. This week I’ll continue with my Financial goal discussion. So, I’ve set up the budget planner. Another thing I decided to fix was my credit card and medical bill debt. I had a major surgery back in 2015. This surgery was supposed to be a 24 hour thing. I have the surgery and the next day I go home and recuperate for 6 weeks and go on with my life. We calculated the cost of the surgery and how much my insurance would cover and what I would owe afterwards. I paid the balance 3 days before I went in to surgery. It turns out that major surgery that was supposed to be a 24 hour thing ended up being a REALLY MAJOR surgery that required an extra 3 hours in surgery, an extra surgeon and an extra 6 days in the hospital. As a result the money that I paid to cover my balance was not enough and it ended up costing another $5000. Oh yeah….they didn’t tell me about those additional charges until a year later. I began making payments on that bill in March of 2017 and will probably finish up by March of 2020; unless I find a way to kill this. I also spent some time with a physical therapist because of some back pain. This turned out to be a ~$700 bill. I tell you, I’m over medical bills.
I can’t begin to tell you what my credit card debt is/was. It’s not that it’s super high, I just hadn’t figured out what it is/was. I was offered a line of credit with a low interest rate so I took the opportunity to figure out the bills that I could easily take care of with the line of credit and those that weren’t going anywhere anytime soon – car payment, student loans (yep, I still have them), a high interest credit line with an unreal balance (I don’t want to talk about it), and medical debt. I then looked at the balance of my credit cards and calculated what my total monthly payments to those lines of credit were. I then looked at what a monthly payment for the line of credit would be if I used it to pay off the credit card debt. I could do it and have some money to spare. There were a few things that I knew would be paid off in a year or less, so I didn’t include them in the credit card debt – these included a line of credit from Paypal and the medical bill from my surgery. Looking back, I should have included the surgery bill balance. I spend $129/month on that bill, I could have paid it off and the extra expense to my loan payment would have been less than $30. I wasn’t thinking on that one and missed the ball; I was only looking at the total monthly payment and what it would be and not how much it would be saving. I tell you I had regretted that decision almost everyday until about a week ago. I hope to tell you about that, but I don’t want to get side tracked. I’m talking abut paying off credit card debt right now. I was approved for the loan, and I paid off 85% of my credit card debt in January. I can’t tell you how freeing it was to get an email from CreditKarma each time something was paid off. It made me so happy and proud. I know you are wondering why I said 85% and not 100%. There were a few bills that I made purchases on after I got the loan payment – 1) was because my husband returned some items that I purchased for him for Christmas and what he exchanged it for was more than what I spent, so I ended up paying more; 2) I wasn’t sure what the balance was going to be on a charge and I estimated incorrectly; and 3) Zulily ended up having a great deal on New Balance one event and I had been looking at New Balance sneakers as a replacement for my gym and walking shoes, they have a plan with their credit cards where you can pay it off in 3 payments and I opted for that option – I’ll have that paid off this month. The others will be paid off in two months. It sounds bad even as I write this, but I’m telling you, I’m not sliding down that slope. It will be done. I will be credit debt free by May.
A quick note about my surgery bill. I first have to tell you about my student loans. I am paying that loan on an income based repayment plan that I have to resign up for every year around the same time. At the end of the year, I filled out my paperwork and submitted it and waited to see if I was approved and what my payment would be. I was totally nervous, because I truly couldn’t afford for it to go up any more. I’m in pay off mode, I can’t add any extra! I got a response back in January saying that I was approved, but it did not tell what the payment would be. I kept going back to my account to see if they would tell me and I got nothing. Finally last week and got an email saying that I was approved and my payment starting in March would be…….wait for it……$0.00. WHAT!!!!! Thank you Jesus!!!! Won’t he do it! I now had $195 that I had budgeted for that I no longer had to pay. Before you thing think I’m going to use that money to go crazy every month, think again. I’m in pay off mode. I have decided, that I’m going to divide that money up three ways. $100 will go towards my surgery bill (Yep!!!! I’ll explain it in a minute), $50 going towards the student loan principle, and $45 will go into savings. The months that I’m short, I won’t make a student loan payment or savings deposit; but I will always make the extra surgery bill payment. You want to know why? Because by paying the extra $100 each month, I can pay off that bill by September. I no longer regret not adding that bill to my pay off loan. Because it would have been an extra $30/month for 3 years instead of being done with the bill completely in 6 months. I tell you God has a plan for you; you can’t always or even most of the time see it, but if you trust Him, He won’t stir you wrong. This entire pay off loan was God driven. I had rejected the idea of this type of loan for over a year, but kept asking God to guide me in how to move forward with my finances. This offer kept coming up and I kept deleting the email. He started yelling at me to take this opportunity at the end of the year. I had to move on what He was telling and I’m so glad I did.
Ok, lets talk about my savings plan. I have 3 savings accounts. Yeah, you read that right, 3 savings accounts. The first is my primary savings that get $5 auto deposited every Friday and any purchases I make with my debit card is rounded to the next dollar and the difference is deposited into the primary account. The second account is actually the “checking” account for my dba. I typically deposit $10 each pay period. The final account I have is something that I started a couple of years ago. It is based on the $.25 savings challenge.
I usually double the amount because I use half of it for my daughters 529 College Savings plan that I deposit a certain amount every month, then deposit the remaining balance earned by the end of the year. The first year that, I ended up spending those savings on my fur-baby Sasha Fierce, because of course there has to be some type of emergency that takes your savings when you’ve accomplished a milestone. I started that savings all over again last year and was able to keep the savings intake (if I took from it, I put it back in asap).
The primary savings account is used when I’m running low in my checking account. I try to keep a minimum of $100 in there at all times. Not to say that I only have $100 in there; I’m saying that when it gets low I move things around when I get to $100.
I think the $45 from student loan that I’m going to put into savings I should alternate between my dba savings and my $.25 savings. That way I can build up both of the accounts.
So that’s the gist of my financial goals. Like I mentioned in the previous post, I plan on checking in with you guys about the progression of my goals. I hope that I remembered everything in my post. I’m going to be honest, I started this on day and finished it on another. Part two was started on the same day that part one was written, but was finished a couple days later. Some of my thoughts may have been lost in the wayside. Having said that, if you have a financial goal that you are working on this year, comment below. It would be great to hear of someone else’s journey. If you have a suggestion for something that you are doing that has worked for you, let me know. I’m always open to suggestions. Until next time.