We closed on our refinance this past week. Woohoo!! We’re going to save almost $350 a month on our mortgage payment. Unfortunately, this doesn’t necessarily mean we can put all of this savings towards our debt, because we were living over our means to begin with. What it does mean is we shouldn’t have to dip into our savings and we’ll have a little extra breathing room.
I have been substitute teaching since the beginning of the school year, and that’s brought in a little extra cash flow. I can only work when my husband isn’t traveling for his job, so that usually means I can pick up 7-10 assignments a month. But once I fulfill 60 assignments, the daily rate goes up almost 60%! At the end of January I was at 31 assignments, so I’m a little over halfway there. The good news is, once I reach “super sub” status, I keep the pay rate every school year if I don’t drop below 60 assignments for the year. I should be making that extra 60% by May, so come August I’ll start off with the “super sub” rate. This will really help with reaching my big goal of adding $2,000/month to our income.
For now, I’ve been focused on applying the extra cash flow from the refinance to our debt, and that has been a great feeling!
Weekly Goals Review
These were my top three goals from last week:
- Create a debt payoff plan and timeline
- Research affordable vacation ideas for this summer
- Get quotes on homeowner’s insurance
#1 Debt Payoff Plan
This week I made time to plan out a debt payoff timeline. Our income will increase in August because I’ll be making more as a sub, and I hope I’ll be in a position to work a little more than I do now. I would need to work 16 school days a month to make an extra $2,000. Of course, over the summer I won’t be working because we don’t have year-round schools in our district.
The deferment I have on my student loans is ending and the first payment will be due in March. Until September (when I get my first check for next school year), I’ll only be able to pay $200/month. That’s still more than the minimum payment, but not by much. My plan is to put every penny of my substitute income towards my student loans. It’s a little over $13,000 and I’m determined to pay it all off with just the income I get from teaching, and have it all paid off by the end of next school year!
I’ve already put $3,700 toward our credit cards with the extra cash flow from the refinance. It would have been $1,000 more, but our van needed to get repaired. That leaves almost $1,800 which will pay off two small credit card balances and most of a bank loan. After all the extra cash flow has been paid out, we’ll have about $9,500 left in credit card debt. That’s still a lot but much better than the $16,000 we had at the beginning of the year! I think we can swing $400 a month towards this debt, but after my student loan is paid off I’ll apply my teaching income to what’s left. That means we should have our last credit card paid off by October 2020.
Here’s a breakdown:
- Pay off all small debts with the remainder of refinancing cash flow
- This leaves one credit card balance of $9,500 and a student loan for $13,000
- $200/month towards student loan from March to August 2019
- $1000-$2000/month towards student loan from September 2019 to May 2020
- $400/month towards credit card balance from March 2019 to August 2020
- $1000-$1500/month from September to October 2020
Of course, this all depends on a reliable income and no major financial emergencies – which is probably not realistic. But, this is a start and at least I have an idea of what it’s going to take to pay everything off.
#2 Affordable Vacation Ideas
I would probably not be even considering a summer vacation this year, except for the fact that our daughter is graduating from high school in May. Even with all of her health issues and switching to online classes at the beginning of her junior year, she’s still been able to maintain a 4.0 gpa.
When our oldest son graduated, we were able to send him on a gap semester program to Indonesia for 3 months. The original plan was to give our two younger kids the same experience, but to the country of their choice. Our daughter had taken two years of Chinese and really wanted to go to China, but by her junior year she was in and out of hospitals and everything changed.
She’s not well enough to go on a trip of that nature, and we don’t have the money to send her because I haven’t been able to work full time. But I still want to do something special for her.
So far I’ve only looked into Hawaii, and I was surprised to find out that we could probably swing a week’s vacation in Honolulu if we book well enough in advance. Thankfully, we’re expecting a good chunk of money back from a claim on our homeowner’s insurance, which would actually cover most of it. I still need to get clarification on the amount and how it all works, and once I do I’ll have a better idea of our budget.
Also, thanks to Facebook, I’m still in touch with an old high school friend who has been a travel agent for several years. I’ll probably reach out to her and see if there’s a better deal out there, or even a destination I haven’t thought of yet.
Either way, I think a nice vacation for my family is within reach!
#3 Homeowner’s Insurance
I’ve been playing phone tag with an insurance agent that was referred to me by neighbors on NextDoor and our mortgage lender. He comes highly recommended, so I’m looking forward to talking to him. Hopefully, he’ll be able to reduce our homeowner’s insurance by $50/month. My original goal with refinancing our mortgage was to reduce our monthly payment by $400, and saving that much on our homeowner’s insurance policy would get us there.
For Next Week
It’s only the middle of February and I feel like I’ve made significant progress in my mission to get out of debt. Refinancing our mortgage really allowed us to increase our cash flow temporarily and also will save us close to $100/week on the monthly payment.
For this next week, these are my top three financial goals:
- Get 3 homeowner’s insurance quotes
- Figure out how our homeowner’s insurance claim works
- Talk to my husband about next month’s budget system
For #1, I should be talking to the insurance agent tomorrow, but I’ll be calling a couple more that were recommended.
In regards to #2, we are in the middle of getting a homeowner’s insurance claim processed. Last summer, hail the size of golf balls (no joke!) beat down on our neighborhood, causing damage to anything it hit. Our roof got some damage, as well as some siding, our fence, and the fireplace vent. (On a side note, our son’s brand spanking new top-of-the-line Crosstrekker got pummeled and left huge dents on his hood!)
At first, USAA (our insurance company) only wanted to pay for the damaged tiles. This really irked me because we’ve paid a buttload of money to them for insurance over the last 20 years and we’ve never filed a claim. Fortunately, the roofer knew how to “work” the system and kept pushing for a full roof replacement. After about 6 months the approval to replace the entire roof finally went through!
Now I have to figure out all the insurance mumbo jumbo. The roofer has brought it to my attention that we could get a serious chunk of money back, depending on how much we actually get repaired. It’s still confusing to me, so I just need to read through the paperwork and probably get on the phone (ugh).
And finally, I need to talk to my husband about setting up our budget for March. He is traveling a lot this week so we’ll probably need to have that conversation on the phone. Good thing he’s not into details and doesn’t ask a lot of questions!
Have you made financial goals for this year yet? Do you have a spouse that isn’t really involved in your finances? I’d love to hear about your experiences in meeting financial goals without much input from your spouse. Leave your comments below, so we can all learn from each other!