Jul 08

Monthly Budget Review – June 2013

Sorry that this post is a little later than usual, but I was down at the beach for a long July 4th weekend with the girlfriend 🙂 You will also notice that I ditched the weekly spending posts – I had only planned on doing that to see how my spending was going on a running basis. After realizing it’s pretty much in control and much lower than I was expecting (maybe it was posting it on the internet that did this?), I’ve decided to just stick to monthly budgets. If I notice my spending inflating or starting to get out of control again I will bring back the weekly spending posts for myself.

Now let’s move onto the numbers, so here is what my budget for June ended up being:

Item Budgeted Actual Difference
Income $2,800.00 $3,300.00 $500.00
Rent -$100.00 -$100.00 $0.00
Car Insurance -$110.00 $0.00 $110.00
Cell Phone -$20.00 -$20.00 $0.00
Gas -$100.00 -$120.00 -$20.00
Gym -$20.00 -$20.00 $0.00
Dining Out -$50.00 -$20.00  $30.00
Entertainment -$100.00 -$100.00 $0.00
Total Income After Fixed Expenses $2,300.00 $2,920.00 $620.00
“Extra” Spending $0.00 -$92.00 -$92.00
Total Income Before Student Loans $2,300.00 $2,828.00 $528.00
Student Loan Payments -$2,000.00 -$1,500.00 $500.00
Total Remaining $300.00 $1,328.00 $1,028.00

As you may have noticed, I had additional income this month compared to the usual $2,800. After talking to my grandma about student loans in general and then my student loans, she wanted to help me out with my loans this month for my birthday – and would not take no for an answer. I feel extremely fortunate to have her help and I am very thankful and grateful that I have someone in a position like that to help me. I absolutely do plan on putting all that extra money I received towards my loans next month after the confusion this month with my federal loans switching services.

You will also see that because of my camping trip, I ended up spending more on gas than was budgeted for that category – but I expected that because of all the extra driving. I also ended up spending more on my entertainment and extra spending categories, from buying groceries while camping as well as buying my Dad a gift for Father’s day. I managed to only spend $20 going out to eat this month – I didn’t include the groceries in this category as I considered them to be entertainment and extra spending to go along with camping.

I really don’t think I broke my budget too bad if any at all. I went over by $20 in gas and over by almost $100 in my extra spending category. But I also saved $30 on going out to eat this month, and I still didn’t have to pay car insurance which will continue until next month. I’m pretty satisfied with my spending this month, especially with the camping trip being included! I expect next month to be about the same with our trip down to the beach this past weekend, but it may look “negative” after using the extra $1,328 from this month to pay even more on my loans in a few weeks.

Jul 03

Cutting out that morning coffee? Congress sure isn’t!

One problem that I have never had to deal with is having to rush to make sure to get my morning coffee at Dunkin Donuts or Starbucks. And it’s not because I make my own coffee either, it’s because I’m really just not a coffee person at all. It’s strange as both my parents are pretty big coffee drinkers, as well as there parents. I tried it few a times and just never really saw the need for it. Even throughout college I probably only drank it one or two times, and it’s not like I even replaced it with energy drinks or tea.

I only really drink hot tea when I’m feeling sick or have a sore throat, and while I used to drink a large amount of iced tea it wasn’t for the caffiene kick. I just enjoy iced tea, though I have largely replaced that by just drinking water now.

When looking to cut personal spending, many people look towards reducing the money they spend on going out to eat, including the purchase of coffee. Unfortunately when it comes to Congress they seem to have a different idea. As you can see from this article and video, Congress spent over $2 million in 2012 on coffee and food! And I’m not a fan of either party, and not trying to get into political issues here – this crazy spending is happening on both sides of the line. As the sequester effects millions of Americans, we see more and more examples of just how wildly incompetent Congress really is.

And while you technically can control where Congress is spending your money with your power to vote, right now those efforts seem to be fruitless – every single member of Congress is spending your tax dollars. So let’s turn our focus to a more positive subject that we can control which is exactly how much money can you save by cutting out or reducing your morning coffee.

If we assume that there are 47 weeks in the year to get coffee while taking into account for days off, vacation, and the days where you are running late and don’t get coffee that gives us 235 days to get coffee.

For the Dunkin Donuts and Starbucks pricing, I just used estimations. Obviously depending on the type and size of beverage you get the price may vary as well as your location. Often Starbucks will run at a slightly higher price premium. For the fast food and gas station estimates, I just went off the fact that many of these chains offer coffee of any size for 99 cents.

For the cost of K-Cups, I went with a 96 count of green mountain coffee at amazon which comes out to 47 cents per cup. Obviously with K-Cups there are brands that are cheaper but the lowest I was able to find was 33 cents per k-cup and some people will also end up buying more expensive brands as well. For the cost of drip coffee, I just went with a tub of Folgers that you you should be able to get in the store for around $10 or even less if you buy in bulk online. They claim you can get ~270 cups of coffee at 6 ounces, but lets say that you can only get around 180 cups as most people aren’t drinking a 6 ounce coffee. This comes out to around only 6 cents per cup! I added 5 cents per cup to both of these to factor in milk/cream and sugar. I also added in another cent to the drip coffee to factor in the cost of filters. You will also have to remember that both of these solutions have an additional expense of buying the coffee machine initially.

Type Of Coffee Cost Per Cup Cost Per Year (1 Cup a Day) Cost Per Year (2 Cups a Day)
Starbucks / Dunkin Donuts $2.00 $470.00 $940.00
Fast Food / Gas Station $1.00 $235.00 $470.00
K Cups $0.52 $122.20 $244.40
Drip Coffee $0.12 $28.20 $56.40

As you can see from the above analysis, it’s these really small victories in the short term that can add up to be large victories for your wallet over the long term without sacrificing too much. If you absolutely have to have that coffee, definitely consider making your own as opposed to going out to get it which will save you hundreds each year. Drip coffee is the cheapest solution, although you can find re-usable K-Cups as well that cut the costs down towards drip coffee. Maybe your work offers free coffee that you can start to take advantage of? Or maybe you can work on cutting the cost of coffee all together?

Photo Credits for this post: 
Peter Griffin [1]
ABC News [2]
Petr Kratochvil [3]

Jun 25

Student Loan Progress – June 2013

Another month, another round of student loan payments. Unfortunately this month ended up being a little strange in my student loan payments, due to circumstances beyond my control. I was not able to put as much money towards my loans as I was expecting. But first I’m going to start off with where I left off last month so you can get a frame of reference.

May 2013:

Loan  Loan Amount  Interest Rate
Private 1  $ 27,131.22 7.92%
Private 2  $ 20,037.32 7.92%
Private 3  $ –   7.92%
Private 4  $ 3,561.09 7.35%
Gov 1  $ 22,118.82 5.22%
Gov 2  $ 7,566.56 6.80%
Total  $ 80,415.01

Here’s what my loans look like this month after my payments were made in June:

Loan  Loan Amount   Change  Interest Rate
Private 1  $ 26,053.92  $ (1,077.30) 7.92%
Private 2  $ 19,971.82  $ (65.50) 7.92%
Private 3  $ –    $ –   7.92%
Private 4  $ 3,532.69  $ (28.40) 7.35%
Gov 1  $ 22,118.82  $ 0   5.22%
Gov 2  $ 7,566.56  $ 0   6.80%
Total  $ 79,243.81  $ (1,171.20)

As you can see from the above, I have started to tackle Private Loan #1 as my next big target, but not quite as much as I would have liked to this month. I set up an auto-payment ahead of $1500 towards my three private loans ahead of time. This was because it was due when I was on vacation. I didn’t want to put too much because I was unsure of what my expenses would look like this month. In hindsight, I definitely could have bumped it up this month but I guess I can do that next month instead.

You may have also noticed that I did not make any payments towards my government loans this month, which is one of the reasons things were beyond my control. That would have been another ~$400 or so, bringing me close to $2000 total for the month. Unfortunately it did not work out this way because for the 2nd time in a little under a year – my government loans have been sold to a different provider! Apparently nobody wants to take my money from me? They can really pay it off in full if that’s what they want…

But I did receive an e-mail that my loans had been transferred to http://myfedloan.org/. Previously I had been using www.myedaccount.com, and I forgot the name of the one that my loans started out with. I received that e-mail on June 11th and they told me it can take up to 15 business (!!) days for my loan to transfer and show up. I’m going to hate to see how bad the interest on my loans look like once this is finished processing. After screwing up the payment last month, and now over a month of interest accruing it will not be pretty. Needless to say, I’m still waiting for the loans to show up. They were shown as fully paid on my previous account right away on the 11th, so not sure what the hold up is here. I also have no idea when this new payment will be due, but I’m hoping that it is later in the month like it was on the previous website.

The only advantage that I’m going to be enjoying is that this new loan service does provide a 0.25% interest rate discount if you set up an automatic debit. I plan on setting up automatic debit that is slightly higher than the minimum payment, as long as it does bring the principal down. If not I will configure my own “minimum” payment to do exactly that. This will be helpful as I continue to put the majority of my money towards my higher interest private loans.

Here’s to hoping that next month brings more significant progress and less confusion!

Jun 22

Robert H Treman State Park Camping Review

This post is going to deviate slightly from the normal theme of my posts on here, but it’s definitely going to stick to the theme of trying to save money. As you may have seen from my previous weekly spending posts, I had made a few purchases in preparation for a camping trip. My girlfriend and I took a week vacation by renting a cabin at Robert H. Treman State Park in Ithaca, NY. I know we both like to research where we are going so I figured if there are any camping enthusiasts (or looking to get into camping) in the area I would be able to assist in your own research with my own review!
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Jun 18

Getting a Raise

Well it seems that I have stumbled upon some good luck as of yesterday, getting notice from my boss that I would be receiving a 6% raise. But I’d like to think it was also having to do with all the hard work I’ve put in, after all we do create our own luck, don’t we? My salary will now be bumped up to $53,000 from the $50,000 that I had started from. Needless to say, I’m still thrilled – just the $50,000 I had started at was more money than I could have ever imagined to be making in one year in my life and I know I am extremely lucky to be in the position I am in, even if it includes all of this debt.

So what effect will this have on my finances? I’m thinking that it wont be too big of an effect – but it definitely will be large enough to notice. My current monthly net income is around $2,800 and now I estimate it will be at around $2,900 after receiving this raise and making a few changes. The raise will take effect starting the month of July and I receive two paychecks a month, one on the 15th and one at the end of the month. That should be around $100 more a month, or $1200 a year. Maybe it will end up going to my student loans?

The few changes that I plan on making are towards my 401k contributions with my employer. I’m currently contributing 6% of my salary pre-tax to my employer 401k, and they match 50% up to 6% – so I’m taking full advantage of that 3% free match. I’ve decided that because of this raise I’m going to up my contribution to 8%. I’ll still only receive a 3% match, but I figure I’m still getting a raise this way and contributing more to my future at the same time. My take home pay might have been closer to $3,000 a month without increasing my contribution rate, but I don’t mind this at all in my current situation.

You might argue that it would be smarter to keep putting as much money towards my loans at the current interest rate they are at, the chances of me earning more on the market in my 401k are slim. Paying off my loans are guaranteed interest. The reasonable side of me would definitely tend to agree with you! Unfortunately the psychological side of me does not agree with that…I enjoy seeing my loans go down, but I also like to see my wealth grow on the other end of the scale too.

It already kind of sucks watching most of my paycheck going to pay most of my loans instead of being able to take advantage of the years of compound interest, so this is my compromise to myself. I’m working on getting my huge “emergency” fund down, maybe the next step will be to increase my loan payments even more! I’m definitely trying to target $1500+ to my loans each month though, and will stick to my budget. For now I’ll just enjoy my raise, and stick to the new plan I have outlined – saving more money and maybe putting a little extra towards my loans as well.

Photo Credits for this post: Stockvault.net