August Smackdown

It finally came!  Today is the day we got to do a major smackdown on those student loans!  We’ve been saving up all month, since we couldn’t make payments while the transition from Edgeucation to Mohela was going on.

Well, the transition is now finished, and let me say I am shocked to say it, but it looks like Mohela has got their shit together way more than Edgeucation did!  What?! I know.  Mohela even sent us an email confirming our payment was submitted! Crazy!

Even more good news, my balance transfer for the loans went through just fine, so I don’t have to worry about all that money being lost in oblivion.  We made the big payment this morning and damn did that feel AWESOME.  We are now officially 80% paid on the loans we owe to the government!  80%!!!!

I am so happy with the progress that we have been making.  Though, at the same time, Mr WWW and I have been talking a lot about the idea of lifestyle creep, and how we could be paying more on our loans if we hadn’t improved our lifestyle.  Back 2 years ago when the loans were all first due, we had to scale our lifestyle back a ton, just so we could make the minimum payments.  Now, our minimum payments are way smaller, and each month we are able to put a ton more towards the loans, simply because our income has increased.

But, even though the loans are getting paid off at a faster rate, we still spend more on fun stuff than we did 2 years ago.  Many of our acquaintances think we are still obnoxiously frugal, because we don’t constantly go out to eat, or to the movies, or to the bars.  And it is true that we are pretty exacting with what we spend money on.  But at the same time, we are treating ourselves a little here or there, more than we would have in the past.

For example, Mr. WWW and I have a membership to a climbing gym.  We found a way to get a huge discount on the membership, it is something that we love doing together, and it keeps us in shape.  On top of that, we have a lot of friends with memberships as well, so it allows us to spend time with our friends without constantly spending money on eating out and movies, etc.  So you can see that this was a very well thought out expense.  We cover a lot of bases with this membership.  But, it still is money that is leaving our bank account.

Another example is our residence.  We could be paying a lot less in rent.  We recently inherited a piano from Mr WWW’s mom, and we needed a bigger place to store the piano.  I really wanted an apartment with an open floor plan, where the piano could be in the main room instead of in a bedroom.  So, we are paying more than our last place for having this piano in our front room.  I have to say, it is amazing.  We play the piano nearly every day, and it is so much fun to have the piano in the main room when we have people over.  But it still money that is leaving our bank account, and not going towards those loans.

Lifestyle creep is tricky, because it happens so slowly and gradually.  I think it really is the determining factor of financial success in the long term, though, so we need to be careful.  I think the pie graphs are helpful here.  Our goal is to put 50% of our take-home pay into “Smart Money,” which is loan payments, savings, and investments.  I think as long as we focus on keeping that at or above 50%, our lifestyle creep won’t be too bad.  For example, we continue to maintain our 50% goal, even with our climbing membership and more expensive apartment.

What do you guys think?  Is it safe to go off percentages of take-home pay alone?  Or is it better to allocate a dollar amount for Needs and Wants, and then everything else goes to Smart Money?  That way, as you earn more and more, you are only investing the extra money.

Advertisements

Mohela

Dude! Student loans have been sold AGAIN!  Well, not technically *sold* since the Department of Education still owns them.  So some back history for you: apparently as part of Obamacare, there is this provision for student loans, saying that all student loans can now be managed by private companies, even though they are still ‘owned’ by the government.  And these private companies of course get some dough in the process.

Which, whatever.  That’s fine.  Except that our loans keep getting shuffled around to all these different companies!  And there are always mistakes made, and we can’t make any payments during the transition period which is a HUGE pain.  So yeah. It is happening again.

We were with Edgeucation Loans (and before that, with Direct Loans), and are now transitioning to Mohela.  Which, doesn’t surprise me.  I think Edgeucation bit off more than they could chew when they signed up for this whole student loan servicing thing, so it makes sense that they are now leaving the market and selling all the loans to Mohela.

Anyway, it totally sucks because August was going to be this big smackdown month, but now we are just accumulating all this money until we are actually allowed to make a payment.  I guess it is pretty badass to see this huge (growing) number in our bank account.  (But also kind of sad, because its like OMGGGGG if we didn’t have the student loans we could be billionaires!!!!!!)

I will be sure to keep you updated on how it all goes down.  Oh, and to complicate matters further, I put in a 0% balance transfer to a credit card for some of the loans, and that got processed right when the transition to Mohela started.  So my card is charged, but I don’t really know if the money ever got deducted from the loans….

Anyway!  In other news, I won a sweet contest at my work’s health fair: a massive basket of produce:

MyProduce

We all had to guess how much it weighed, and the closest guesser won all the food!  I guessed 32 lbs and it was really 31 lbs.  Woohoo!  I was so freaking excited, I wanted to win this so bad.  So Mr WWW and I have been working our way through the whole thing.  I am determined that NONE of it will go to waste!  We’ve done good so far. I will post some pics of what we did with it.

Oh, and I will be coming back here with a PFJ recap.  Spoiler: I kind of fell apart a bit at the end of the month, but I sure learned a lot and that’s something, right?