Debt Elimination Update: March 2021 (and Financial Goals for 2021)

I turned 40, both my mother and I are fully vaccinated against Covid, Congress sent us a bunch of money, and the weather is looking up. All in all, March 2021 was VASTLY superior to March 2020. I allowed my blog-business experiment, Free Fun Family, to lapse & it feels good. Kept the domain b/c I like the name. Don't know if I'll use it. Still haven't brought over all my old posts, but I'll get there.

We're so close to paying off the debt I set out to tackle three years ago. In fact, with an expected escrow refund check from the successful completion of our mortgage refinance (2.875%, 30 year, baby), we'll have the credit card portion paid off in April. I have participated in a generous state tax credit program for people with outstanding student loans for the past two years (Marylanders: Check it out), so I think it would be beneficial to shift some of the most urgent financial goals for the remainder of this year.

Hiking was great this month. Here is Wolf Rock!

Here are my NEW 2021 financial goals:

1. Build out the emergency fund to 3 months expenses. We built a full one month e-fund last year to last through the end of debt repayment, but now I'm ready to increase this before finishing the last of the grad loans. Eventually, I would like this to be 6 full months to cover unanticipated employment, home and auto repairs, and potential unpredictable crazy stuff like, oh, say, another pandemic. (Please let it not come to this).
2. Max out my and my husband's Roth IRAs. I have not been able to do this since back when contribution limits were $2,000 (they are now $6,000 per account) in early 2000s. This will be a stretch goal for us, as we are only just over 4% of the way there at the end of Q1. (Note: I am the only income-earner, so my husband's is a Spousal IRA).
3. Increase donations by 1% of income. Last year, not including the money we gifted to family members hit by the shutdowns, we gave 4% while paying off debt. I'm aiming to increase this each year until we are at 10%--I only really started giving substantially a couple years ago. Then I'll hold steady until some very long term financial goals are met. (I do include some of this unexpected stimulus stuff as "income" for my percentage purposes).
4. Stop penny pinching the grocery budget. We love to eat high-quality, local , and organic food. Mingi likes to get stuff that reminds him of home from HMart (the Korean grocery store). I will continue to be extremely conscientious of food waste and unhealthy or environmentally harmful buys, but I already went up one size and egg order for our CSA.
5. Save for a really nice trip for next year. We want to really travel again when the kids are vaccinated. It's a delight and a joy.

We've also got some long term thoughts now that we are almost credit card debt free. We are interested in slow, longer-term travel, my out of pocket Ed.D. expenses, including a sabbatical half-to-full year, and a kitchen remodel. Trying to decide how to prioritize these goals now.

Welcome, Spring!

I am seriously burnt out at work, so I decided to take some annual leave to coincide with my children's Spring Break. This was a good idea. I also am watching more dance movies. This helps, too.

Financial progress from March:

• WOWZA Stimulus Check and State Tax Refund. Largest check to date (I hit under the income limit for single full amount, so yes, we got the full amount for a family of four) and my tax refund both allowed incredible payoffs for this month. We also donated a bit more, increased monthly contributions to the Roth IRAs, and bought my husband a back massager that mounts on his chair, like he has always wanted. Good times.
• Finally signed off the Mortgage Refi. Much lower interest rate and monthly payment. Paying it off early is still a long term goal, but it is not more important than the goals mentioned above at this time.
• Closed some credit cards for simplification purposes. I used balance transfers to keep my interest low while I paid it off, but now I'm hoping to simplify back down to a handful of cards.
• Debt Progress: Here are the numbers for the end of March:
  • Balance Transfer 2 (0% through April 2021): $0 CELEBRATE--one more gone!
  • Balance Transfer 3 (0% through August 2021): $3,000
  • Grad School 1 (5.5%): $1,485.78
  • Grad School 2 (5.5%): $3,945.41
    TOTAL Remaining: $8,431.19
    Amount paid off this month: $6,339.45
    Amount paid off TOTAL: $35,824.49

Look at that crazy 2021 cliff--the debt is just melting away!

Considering that the entire YEAR of 2020 netted a $3,000 (and 87 cents!) payoff on this debt, a single month paying more than double that speaks to how powerful direct giving can be for individuals' finances. The stimulus payments have met some political controversy over concerns that people who didn't "really need" it might get extra money. And we certainly are in the category of not "needing" this money; however, it made a huge difference to our financial picture and will allow us to help more people through community poverty alleviation and direct giving.

While I'm no Andrew Yang enthusiast, I do appreciate what he did to bring the conversation of Universal Basic Income to the national stage during the his presidential bid. I hope that we in the U.S. can divorce ourselves from the inhumanity of equating income with worth.

Hope you had a good March!

Debt Elimination Update: February 2021

February was a short, bitter month. From the death toll from Covid reaching more than half a million in the U.S. (more than 40% of which were completely senseless) to snowstorms that incapacitated multiple states resulting in catastrophic loss (and more deaths), it's clear that the constant tragedy we felt in 2020 has well established itself into this year. 

Our lives have been less dramatic, and for this we are grateful. We continue to have our kids engage with online learning, even as our school system opened in hybrid. Work is overwhelming still (and will be through the end of the pandemic), but I've been able to make some inspiring progress with access to college courses this month for our students. I submitted my application for a doctorate in education (Ed.D.) program that would begin in the summer semester, with a target completion of Spring 2024. We made a lot of progress on our financial goals (see below). We played in the snow.

A rare snow day for Mom in which offices were closed.

As we have been doing throughout the pandemic, we deployed some of our money for giving to alleviate emergency needs. We gave to a friend in Texas who was using the extra GoFundMe money she got beyond the lost groceries she needed help replacing to other people in need. We also sent a bit to Jackson, Mississippi whose storms left residents without water for weeks. Being able to send some of my giving money to alleviate this emergency when the mood so struck makes me feel rich.

Teaching his sister long division.

It feels like I spent most of the month of February pressing "refresh" on pharmacy and hospital websites in a doomed attempt to get a vaccine appointment for my mother and myself. But on the very last day of February, we got a call from the local senior clinic and were able to schedule Mom for March 2. A few days later, one of those pharmacy refreshes yielded an appointment for myself for March 6. If all goes according to plan, I will write my March update with both of us completely vaccinated.

Financial progress from February:

• Got my Federal Tax Refund. The large payoffs this month are from this lucky addition to our regular inflow. I used to try to optimize my taxes so I got less of a refund, but these days I like the "bonus" I get.  Plus, if I do get more Freelance work, it gives me a nice buffer. We also used a bit of this money to buy a second guitar and amp for the budding musicians in the household.
• Waited patiently for mortgage Refi--still not processed. There was a hangup with subordinating a grant I got with my original mortgage (registered as a lien against the property that is forgiven after 15 years of occupancy).  Plus, all my loan processing people live in Texas, a state which had a terrible month (see above). We're now scheduling closing for March 15, so cross your fingers!
• Applied for a telework ADA accommodation. It really is the worst that I had to do this because I don't want to go against the mission of bringing kids back into buildings, but my doctor doesn't want me to risk exposure. Just hoping this doesn't impact long term career goals and the vaccine comes soon.
• Debt Progress: Here are the numbers for the end of February:
  • Balance Transfer 1 (0% through March 2021): $0 CELEBRATE!
  • Balance Transfer 2 (0% through April 2021): $4,000
  • Balance Transfer 3 (0% through August 2021): $5,000
  • Grad School 1 (5.5%): $1,578.62
  • Grad School 2 (5.5%): $4,192.02
    TOTAL Remaining: $14,770.64
    Amount paid off this month: $2,436.36
    Amount paid off TOTAL: $29,485.14

Crossed off one of my balance transfer cards completely!  Woohoo!  That's a party by itself.

When I include mortgage debt and my undergrad student loan (very low interest rates), I've paid off $41,609.77 since starting this whole endeavor in January of 2018.  Crossing the $40K mark feels so surreal.  I'm able to dream about financial goals again!