Hi all - I hope I didn't screw up formatting
TL;DR - Here's a summary and burndown charts of the past 2 years http://ift.tt/2wkmpwD
Paid off $70k in loans in 2 years. I have $40k left.
I looked here for advice back in 2014 when graduated college. I had over $100,000 total including both federal loans and private student loans ($110,624.88 as of right meow). I wanted to show my progress and my future plans.
Some important details - I landed an engineering job out of school after racking up a butt load of student loan debt. I was paid $69k to start and I'm making 77k after 2 years. Career wise I am doing very well. I am in a graduate program for an engineering degree. My company is paying for it, but I front the cost and get reimbursed. It costs $4400 up front.
I am able to live at home with a car my father bought for me. I hope to get a few more years out of it. ($1500 present for bday. Thanks dad). My bills are as follows:
Car insurance - $935 / year (last year was $1440!!) (pay with tax return and put rest in savings)
Phone - $40/month
Gym - $140/month - this is not a typo
Gas - $80/month - this is an overestimate
Student Loans - $2500/month
Total = $2760
Bi Weekly Paycheck = $1900 * 2 = $3800/month
3800-2760 = 1040/month or $260 a week.
Should throw in that I get all the matching bonus from my 401k. Currently sitting around $20k
I received a gift from relatives of $5000 after college graduation and I paid it all towards a private loan
Being able to spend such a ludicris amount of money a month has been a blessing. I pretend the money doesn't exist, and I am content with the amount I have left after every paycheck (about $650 every two weeks; $1250/bi weekly forloans).
Savings is slacking. I try to have at least a minimum $3000 in my savings but right now it's at about $2500. I have a $500 account that I consider an emergency fund but I know its low. I really don't save any money from my paychecks, but I am able to put certain things into savings. For example, I get 3 paychecks in one month twice a year. I put that extra $1250 into my savings. I also travel for work where I get paid a per diem that is typically way more than I use. In 2016 I traveled 70 days @ ~$60 a day and this year I've traveled 34 days. That comes out to an extra $6000. But again I blow that on traveling and so much food.
The reason my savings doesn't stay so high is because my girlfriend and I like to travel. With work travel, I get to acculmulate a lot of points. This has been very successful for us. (200k Marriott points, a bunch of different airlines, free car rentals).
I also go out for food waaaaaaaaay too much but I've been meal prepping on and off Sundays for the week. Weekends I still may end up spending over $100 going out.
So that is my situation right now. I am content living without the money I pay towards loans, but I know in the future I can do things to feel more financially secure. I see where I'm slacking with my bad spending habits but shit I'm attributing it to being young. I'm not frugal by any means and I buy stupid shit. But I also feel like I can get away with it right now. Moving out and buying a house is the next step.
Before I talk about that, here is some of the excel stuff I play with.
The first image is my summary. It shows how much I have paid and I have much I have left. I have 8 months until I am done paying off my private student loans!!
I've paid almost $70k in loans! My method was snowball where I paid the minimum payment on every loan except the loan with the highest interest and highest total amount. That loan I threw $2500-min(otherloans) at it. I honestly don't know how much I could've saved by refinancing but I'm not too worried about it.
The second picture is a burndown of my payments over time, however they are not entirely truthful (but really close!). I did not start with $110k in debt, but it acculmulated over time. Unfortunately, there is no data present for interest accrued and I haven't gotten around to writing something to do it. The graph's data includes interest but already accrued to the starting cost.
The third photo is a burndown of the private loans. Less detailed. Not sure why I uploaded them.
The plan moving forward is to pay off my private loans completely in 8-9 months. Once I do that, I plan on paying $1000 a month towards my private loans (minimum is $321.07). That means it will be a little over 2 years until my loans are completely gone. I want to save $1500 a month for close to a year so I have maybe $15k to put towards a down payment on a home. I have heard that I can take a loan against my 401k as a First Time Home Buyer but I honestly have been a lazy shit and not googled the specifics of this.
With my girlfriend, we have a total household income of $120k (she's an engineer too, so this will eventually be much higher). She will have about $30k in savings when we plan on looking for homes. I understand there's a long time between being to look and closing a deal.
That gives us a total of $45k cash and I'll have about $30k in my 401k (maybe less, idk. market and shit).
I have a solid credit score (750 last check). I have two credit cards: Marriott Rewards and Chase Shappire Preferred.
I look forward to buying my first home. Its a new challenge and playing with numbers is kind of fun. Based on rough estimates, we can "afford" $1550-$2200 a month (25%-36% of monthly income after taxes) for a mortgage payment. With that split in half (or % of total income, idk yet but that's an important thing I'm not ignoring) and after student loans are gone, I'd be able to throw a lot into savings.
Questions:
I was wondering what kind of interest rates and numbers I can expect as a first time home buyer. GF has good credit as well and no outstanding debt (is that the same thing? idk)? Are there any numbers I can estimate with that I can play with? I've seen online calculators but I'm not sure how accurate their 3.7% interest rate is on a 30 year mortgage.
Also how important is 20% down payment?
Any details I should know about borrowing from 401k for down payment on first home?
How much $$ could I have saved if I consolidated my private loans?
More out there question: I feel a little worried about my spending habits. I track everything with mint, but I despise looking at my spending history. I see the numbers of my credit card bill and just pay it off. Sometimes I dip into my savings to cover costs and I get into this thinking that "oh next week I get paid and I'll spend less" but I rarely do. Does anyone else feel this way? I feel like I'm chasing paying off debt but I never catch the dragon. But I've also never missed a payment or anything.
Also wanted to say thanks guys for all this very valuable information you provide. It's been a great resource. I know I rambled a bit, probably should've organized this better but it's late. I'm tired. Oh well.
Any comments or feedback would be great. Thanks all!
Submitted August 02, 2017 at 12:35AM by kplax http://ift.tt/2vrsR8D
