1 Let’s All Throw Some Money at Our Problems: August Check-In | The Billfold

Let’s All Throw Some Money at Our Problems: August Check-In

It’s been another month, which means it’s time to check in with our debt payments. If you’re joining us for the first time, you can read about our decision to publicly keep track of our debt here. And then you should totally participate, because watching those numbers go down each month feels good. So let’s get to it, shall we?

Logan is paying off her J. Crew Credit Card, which currently has an APR of 24.99 percent, and a minimum monthly payment of $29.
July 2012 Balance: $550.12
August 2012 Balance: $513.61

Mike is paying off one of his Sallie Mae Private Student Loans, with a current interest rate of 4.5 percent, and a minimum monthly payment of $55.
July 2012 Balance: 1,559.61
August 2012 Balance: $1,497.71

It’s time for you to give us your updates below! Remember, if you’ve paid off your debt feel free to send Mike your address and he’ll send a note to congratulate you. Not a joke! People are doing this, and he’s already taken the time to write to a few people who’ve paid off their debt.



48 Comments / Post A Comment

Dancercise (#94)

I actually discovered something about this that I’m wondering if anyone has any insight about. I decided to start paying more than the monthly minimum on my car loan: $250 instead of $233. I started last month, and this month statement say that the amount due is now $216 because I “overpaid.”

I assume that if I keep doing this, the amount due each month will continue to reduce, but… what then? If it ever shows me $0 due, can I just… not pay that month and have an extra $250? That actually sounds kind of awesome.

ennaenirehtac (#199)

@Dancercise Do it and let us know if it works that way!

RosemaryF (#345)

@Dancercise Yes, but if you don’t skip a month then you pay it off a month early! AND! Depending upon where you are in your loan, it will lower your final payment.

sony_b (#225)

@Dancercise Yes, that is true. BUT it’s really a scam from the bank to do it that way. If there are no prepayment penalties on the loan (you should call to check) – they should be using that extra cash to pay down your pricipal, not kick your payment down the road. If you don’t have a pre-payment penalty, you should send two checks, one for the payment, and then another that says explicitly “apply to principal”. What they are doing is continuing to charge you more interest because you’re not paying down the principal. Incidentally, a lot of them will reduce your monthly payment as you pay down the principal as well, because your interest payment shrinks right along with it.

Sallie Mae just acquired my student loans and the “apply extra to principal” tickbox disappeared from their web interface. It took me a couple of months to figure out what was happening. If you’ve got a regular income, don’t fall for this. Your bank is screwing you over and hoping you’ll continue to let them with a smile on your face.

@Dancercise Sallie Mae actually screwed up when I changed my auto payment date and ended up debiting my account twice in one month. I was really pissed at the time (since it also happened to be the month a little dyslexia caused me to budget using a starting point of $2300 instead of $2030), but now I’m technically a payment ahead. Unfortunately, I’m only making the minimum payment so not much extra is going to the principal. But it’s a warm fuzzy feeling!

i make lists (#1,687)

@Dancercise It’s actually called “advancing the due date” of your loan, meaning any extra money you put toward your loan is going to the next month. As @sony_b said, you should definitely put any extra money to the principal (the original amount you borrowed), which is how the interest is calculated.

You would eventually get a “free” month where you don’t have to pay your loan, but you would still be paying interest that month.

CubeRootOfPi (#1,098)

@sony_b I’ve been told by some lenders that it’s impossible to apply the extra to principal. Is that allowed?! Anyway, I’ve tried to get around it by timing my payments (pay regular amount on the usual day, and then have the extra payment fall the day after the regular amount) and making sure I pay the minimum each month (and whatever extra amount) at the same time, even if the bank says I don’t have to.

lavendergooms (#1,978)

@CubeRootOfPi ACS did that to me. In five years, despite paying twice the amount I owed almost every month, my loan amount was… pretty much exactly the same as I started with. I called, wrote emails, etc. and was told that I could only apply to principal after ALL accrued interest was satisfied. Since interest accrued every single day and was for more than the amount they charged me each month even overpaying by double went about 20% (if that) to principal.

We ended up taking out a bank loan and paying off the student loan. The bank interest rate is much lower and they allow you to put all overpayment toward principal. I’m sure there are a ton of reasons why that is the wrong choice, but I couldn’t take dealing with ACS anymore.

Dancercise (#94)

Thanks, everyone! I will definitely call the bank (the loan is with Wells Fargo) and ask for the extra amount to be applied to the principal. We’ll see what they say!

CubeRootOfPi (#1,098)

@lavendergooms Oy, ACS services my student loans, too. Glad you found a solution that worked for you!

sony_b (#225)

@CubeRootOfPi If it’s allowed by the terms of your loan, then yes. I had a 401k loan that was like that a few years ago. They would accept only the monthly amount agreed upon or a payoff. Nothing extra. I did the math and figured that I could save a few hundred bucks and pay it off faster by using a teaser balance transfer on one of my credit cards. It worked for me, but you’ve got to be really careful on the math before you do something like that, because it can get out of hand fast.

Doing this for the first time, mostly because I want mail from Mike Dang! I send cards to all my friends but very few write back (emails are okay, friends! I just like fun stationery).

I have a credit card bill from my college days, it’s not outrageous but it’s money that could be going elsewhere.

Debt: USAA Platinum Card
Thanks for the memories: Basically everything I ever bought between 2006 and 2009 except my bar tabs (at least back then I knew opening a tab would be a bad idea!), flights home/to Europe/to visit friends, otherthingsIcouldn’taffordbutdidn’twanttoadmit; currently, anything I buy with my Apple account, $16 at Target when my other credit card was used for high end escorts in the UK and had to be canceled
APR: 8.9% (that seems to have gone down since my balance-high of $1,900?)
June 2012 balance: $1,541.03
July 2012 balance: $1,452.99
Minimum payment: $0 (?!?! so misleading); I auto-pay $100 every month from my checking account
Years to pay off if I only make min payment: forever!
Amount I’ll end up paying: I don’t like to think about this, I’ve been carrying a balance on this card since I was 19 or so. Progress, though!

ThatJenn (#916)

@polka dots vs stripes USAA calculates your minimum payment then deducts anything you paid OVER your minimum payment in the previous month – it’s why I never have a minimum payment there. If you want to figure out what your minimum payment would have been for this card, take 1% of the balance and add it to 0.089/12 times your balance (the monthly interest). I’ve got the same card and actually called and asked them how it was calculated so I could learn. :) So your minimum payment for June would have been $26.84 (a little less than it would have been for May), but since you paid $100 in May you totally paid your June minimum payment.

My card used to hold all my purchases from 2006-2009 too! And have a higher interest rate. My balance was and is higher though (especially my high balance, eek).

@ThatJenn oh HMMMM thanks for that! There was been some time, though, when I was an financially-uneducated young one (now I’m a kind of-educated mostly-still-young one) and I didn’t make any payments, because hey, $0 due let’s keep spending money, and it took awhile for it to catch up. I wonder if I had just overpaid by that much one month. Good to know!

ThatJenn (#916)

@polka dots vs stripes I think (though I haven’t confirmed this) that they used to keep a running tally of your payments so overpayments over several months would add up to relieve you of a number of payments, but that they’ve changed it now so it only spills over one month. I say this because I observed the same thing during my spendy 2006-2009 years.

cat hoang (#1,987)

i want mail from mike dang! :o)

i’m paying off my government student loans with a current interest rate of 7.0%, and a minimum monthly payment of $503.98.

July 2012 Balance: $68,134.70
Aug 2012 Balance: $67,143.22

Wells Fargo Credit Card
APR: 12.65%
5/2/12: 784.70
6/2/12: 468.29
7/2/12: 231.88
8/2/12: 133.30

This is down from about $1500 in early December, thanks to a full summer of unemployment and then moving once I got a job. There’s a light at the end of the tunnel!

As I predicted last month, I got fed up and just paid off my student loan out of savings this month! My final payment was $2963.08 and I felt comfortable with the amount I had left in savings after.

I still have another $40,000 on another student loan, but it’s a huge relief to have one less monthly payment. I work in an industry where I could lose my job at any given moment and need to be able to scale my bills back as much as possible if happens.

maude (#1,988)

This is my first time, too. I just paid down my credit card balance (hurray!) so now I’m working on my student line of credit & loans.

I’ve been making regular payments to the visa for a while, but because my income is still fairly low, I felt uncomfortable making more aggressive payments. I decided to put money into a savings account until I had enough to pay off the rest & still have an emergency fund – does anyone else do this? I know it costs me more, but I find it way less stressful.

Visa Classic Low-rate
APR 11.99%
13/08/12: 00.0(!!)
12/07/12: 3304.38

Credit Line
APR 7.49%
Aug balance: 14,875.00

Maladydee (#909)

@maude That’s what I do with my line of credit – I have a set amount that I will never pay less than, but until I have a comfortable amount in my savings, I won’t be making really agressive payments on it, because I never want to be in a position to lose the progress I’ve made on paying it down, due to lacking a good savings.

tiktaalik (#778)

Up until about a year ago, my husband and I never had real jobs at the same time. During a particularly bad couple of years, we lived (as in, bought groceries and paid rent) on credit cards, which led to a total credit card debt of about $15,000 across 6 cards.

I’ve had a real job for about 2 years, and we were able to actually live (barely) on just my salary. When my husband got a job in September of last year, we decided to put about 75% of his weekly paycheck to paying off credit cards after we took care of a few immediate expenses (car repairs, ugh). In 11 months, we have paid off the 3 credit cards with the highest interest rates (about $7000, all with interest rates above 25%). We are about a quarter of the way through paying off the 4th card, and the two remaining cards have pretty low interest rates. We are on track to pay off all of our debts by next Feb/March, which will come in quite handy since I am pregnant and due in February!

So, for the August check in:
We are paying off my Chase Amazon card, which was maxed out at $5000 by paying tuition for a summer class in grad school and then moving expenses to start my new job in a new state after grad school. The minimum payments are $76 and the interest rate is 13.24%.
July 2012 balance: $4440.37
August 2012 balance: $3293.30
Tomorrow is my husband’s payday, and we will be putting another $300 to the card, which will drop the balance below $3000 for the first time in years. We will pay a total of $1500 to this one credit card this month.

I’m very excited about this, once we pay all the cards off it will be the first time I am free of credit card debt in my adult life! I am glad the Billfold gives me a place to share this excitement, because this is not something I really talk about with friends. You’d better believe I am going to ask Mike Dang for a congratulatory note when I pay all this off! :)

ilovetobudget (#913)

@tiktaalik Is it possible to be proud of a total stranger? I was so impressed by your post. Sounds like you and your husband haven’t had it the easiest with finding jobs, but look at how well you are doing! Also, congrats on the kiddo.

tiktaalik (#778)

@ilovetobudget Oh my gosh, thank you so much! We mostly just feel very lucky to be doing well enough to pay stuff off.

Dancercise (#94)

I agree with ilovetobudget! This is awesome, and I’m so glad to see that you guys came up with a plan and stuck with it!

Gonna send Mike Dang an email!

VACU Visa, interest at 6%
June 2012 balance: 1081.89
July 2012 balance: 588.86
August 2012: Paid off! $593 thanks to a $500 savings account with ImpulseSave

Next goal:

Bank of America Mastercard, 12% interest I think
August 2012: $3283 (ouch)

bridgett (#1,989)

I want to play along as this is currently a big focus in my life. I have one big hunk of credit card debt that my husband and I are currently living and working in China in part to pay down. The details:

Account: Bank of America Visa
Memories: More or less everything I bought while I was broke and in college. Sadly, nothing particular sticks out in my mind.
July 2012 balance: $6,099.49
August 2012 balance: $5,353.36
Min. payment: $96
Time it would take to pay off with only min. payment: 22 years
Total amount paid with min. payment over 22 years: $9,572.80
APR: 10.24 % / 1.99 % promotional on part of the balance
My monthly goal to get this baby paid down by March 2013: $790

We have firmly committed $790 per month to ridding ourselves of this debt forever and ever, Watching that balance go down considerably each month keeps me motivated when living in a foreign country gets too difficult.

ThatJenn (#916)

@bridgett That is really awesome. Congratulations on your progress/commitment!

bridgett (#1,989)

@ThatJenn Thank you!
And congratulations to you to for all the hard debt paying work you’re doing. I agree that tracking it and actually seeing the numbers written down helps so much. It’s so motivating to watch the numbers go down every month, isn’t it?

Last month I vowed to start paying $50 a month to my $1057.37 IRS debt. (Always check the “withhold my taxes” box on your unemployment, kids.) Since then, I have… paid $50 to my IRS debt, bringing it down to $1017.37. I also made a nice manila envelope for my IRS junk with the current debt number written in sharpie on it so I can cross it out and subtract fifty each month for maximum satisfaction.

I decided to hit two birds with one stone and build up credit while I pay off my debt, so I’m now using my Capital One secured card ONLY for these payments, and paying that off each month. Unfortunately, the IRS doesn’t take CCs directly, so I have to pay a $3 fee with each payment, but I figure the good credit/lack of paperwork hassle is worth it. My CC is still on last month’s cycle, so my second $50 payment won’t be for a little bit. It’s on my calendar.

Lily Rowan (#70)

@beatricks@twitter I kind of doubt $3/month is actually worth it — can’t you use the card for something else that doesn’t have a crazy fee? (And still pay it off!)

ThatJenn (#916)

@Lily Rowan Maybe one grocery trip per month?

sara moon (#650)

My Mastercard has an interest rate of 13.24% p.a with a minimum repayment of $209
Balance at July 21: $10,464.29
Balance at August 21: 10,214.29

Aunt_Pete (#693)

I paid the minimum on all my student loans this month, but I did throw some money at Discover!

July 2012 balance: $1,172.32
Current balance: $407.71

Not bad! Plus I’ll hit $50 in cashback bonus on my next statement so I’ll apply that to my balance.

@Aunt_Pete Dang, you threw a bunch of money at Discover!

Aunt_Pete (#693)

@backstagebethy Yeah, I don’t really work on commission, but every once in a while when I have a good month my boss throws in a little extra. I usually spend a third, save a third and put a third towards debts, but this time I just did an extra credit card payment. Part of me thinks I should figure out how to do this based on my normal salary so I can save the bonuses but I guess at the end of the day, its a work in progress.

selenana (#673)

I don’t have any credit debt (paid it off last year, woohoo!) so I’ll put down my student loan – the minimum payment is $117, it’s a consolidated loan with 3% interest. The balance is now $7173. In addition to the minimum payment, I’ll throw an extra hundred bucks at it this month. Doing that now.

CubeRootOfPi (#1,098)

I’m focusing on getting my emergency fund up to speed this year (had a financial emergency and also decided to use part of the fund to pay off a high interest student loan), but will put more effort into paying off the big but lower interest loan starting next year.

ThatJenn (#916)

I did all of my debts, because I’m still obsessively tracking them on spreadsheets.

Main card:
7/18 balance: $2,602.22
8/23 balance: $1515.50 (I’ve paid down $2070.67 since June – I’ve actually paid down a bit more but also charged plenty, and I hope to pay it off before the end of the year)

Home Projects Visa:
7/18 balance: $5,936.44
8/22 balance: $5713.68 (I’ve paid down $522.76 since June, and am on track to pay it off in November 2013)

Car loan:
7/18 balance: $4,327.22
8/22 balance: $4,111.93 (I’ve paid down $579.86 plus interest since June, and am on track to pay it off July 2013)

7/18 balance: $109,495.72
8/22 balance: $109,242.68 (I’ve paid down $505.48 plus interest since June, and am on track to pay it off in April 2037, heh)

I’m actually really impressed with myself. Checking in here and signing up with mint.com have really helped motivate me to be more frugal and really aggressively pay down this debt so I can move on with my life.

awk (#840)

I have only one debt. But, I like to do things big, so it’s a mortgage.

July 2012 Balance: 164,042.88
Current Balance: 163,735.42
Estimated payoff date: 1 million years from today probably. I am on the front end of this thing, which means that most of my $1,200 payment goes to interest, taxes and insurance. I pay very little in principal. Sucks. I generally try to pay at least $75 more per month on that thing. My mortgage officer tells me that I can shave years from the payoff if I do this.

Also, I look at my Zillow Zestimate way too often and it makes me cry.

OhMarie (#299)

@awk Oh man, same thing here. Will Mike send me a note when I pay this thing off in 2040?

Stop looking at Zillow!! It’s totally wrong anyway. (this is what I tell myself)

TARDIStime (#1,633)

I’ts crazy how much money banks make off mortgages, isn’t it? I did a basic loan calculation of what it would cost for my partner and me to borrow $450,000 (not even close to the bottom end of the market in Sydney) and they stood to make about $95,000 off us over 25 years! It’s crazy to think that you’ll be buying a house for $450,000, but actually paying well over half a million dollars for it in reality – WTF?

ElBlynx (#499)

Thanks to Mike, Logan, and all the brave commenters for this feature!

US Federal Direct Loan (almost there!)
Interest Rate 2.140%
July 2012 $185.80
August 2012 $135.48

Alaska Student Loan Corp
5.7% interest
July 2012 $21,993.45
August 2012 $21,818.59

lindseykai (#1,544)

I just refinanced my mortgage, moving it from a big bank to my credit union and dropping the monthly payment from $850 to $730. I paid the closing costs up front, so the refinance will pay for itself in a little over three years. Feel really good about this!

joyballz (#2,000)

I haven’t been commenting throughout this series, but I just paid off my Chase credit card that had a balance from a short bit of unemployment earlier this year. I sent an email and Mike sent me a note of congratulations! He is true to his word! Next up is a 0% interest card with ~$650 on it. Once the consumer debt is gone, I’ll tackle the student loans.

call_her_alaska (#1,113)

Ok, I am going to do this because when it comes to my credit card is seems I can’t be trusted. I will put my amount only 3 days ago as I don’t actually have the details of what it was a month ago.

MasterCard Credit Card
21/08/12 $6,920.98
24/08/12 $6,440.98

I’m not quite sure what my interest is… about 14% maybe. I can’t seem to find it online.

My problem has never been making payments on my card but stopping myself from then going and just buying stuff on it again to make the payments pointless. Let’s see if this helps!!

TARDIStime (#1,633)

I don’t have a mortgage, car loan, or University loans. I also was lucky enough to come of age the year after the introduction of the Visa Debit, so I’ve never owned a credit card.
All of you up there in commentland; I’m proud of you. Debt is scary (to me)!
Congrats on your Mail From Mike! :-)

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