Wednesday, January 2, 2013

New years updates

Happy new year everyone. I'm going to post some updates on my financial status, and do a recap of how well I met my goals in 2012.

It has been a while since I've written at length about my finances. I'll start with my student loans and go from there.

Personal finance update

I made a payment of $1600 on December 27th, of which $43.31 went to interest. The interest is accruing more and more slowly every day thanks to my accelerated payoff.  This took my outstanding balance down to $6,954.92, just under $7k. Payoff is in sight and it feels good. As a bit of trivia, my next automatic payment is not scheduled until September of 2020.

My checking account has $3,612.33 in it, and I get paid this week. I'm keeping the balance higher than usual for two reasons: 1) as a safety margin in case I get fired or have to pay off my 0% credit cards in a hurry, and 2) in anticipation of funding one or more tax-favored accounts before tax day.

I ran some numbers last week projecting my personal finances deep into 2013. The results were sobering. I determined that yes, I could pay off my student loans by around May and still have enough money left over to both partially fund my Roth IRA (for $3k) and fund my Health Savings Account for around $1k. But I've accrued over $8k in 0% credit card debt over the past six months or so, and paying that off in a timely manner is going to throw a wrench in things. As such I'm no longer planning on funding my Roth for this year. I do have the cash to fund my HSA, and I'm favoring that approach because of the direct effect it will have on my tax refund.

Okay, let's talk about my 0% credit card debt. I've got a lot of it. It's part of my strategy to accelerate the payoff of my student loans and I feel I've been using my 0% cards to good effect. As of today I owe $6,372.19 on a Discover card (promotional APR lasts until August 2013), and $2,256.74 on a Capital One (I'm not sure when the promotional APR ends on this one, but I'd better find out).  That's $8,628.93 in total, almost as much as my car loan! It seems like a totally unreasonable number so I'd like to share some context.  $2200 on the Discover was a down payment on a couch, which was a joint purchase and which I was reimbursed for immediately from our joint checking account (and which I immediately used to make a dent in my loans). Another $500 or so was for the purchase of an iPad for my step mom, split 5 ways so my share was around $100, and for which I was reimbursed. On the Capital One, I recently charged a $600 dentist bill (that was awful but necessary) and a $800 bill for eye glasses (it is likely I overpaid, and my second pair was not fully covered by insurance). Both of these charges, and around another $200 of miscellaneous medical bills, I can and will reimburse myself for out of my Health Savings Account. All together that's about $4200 in interest rate arbitrage. That means my pure spending since mid-May is around $4,400, for an average of (roughly) $675 per month. This is still pretty high. I'll have to work on bringing down my miscellaneous spending in 2013.

My automobile loan balance is $9,303.19. The monthly payment is $184.18. I need to ignore paying this off until I have a better handle on my student loans and 0% credit cards.

My take away from all those numbers is that I have a lot of balls in the air right now. I'm playing with fire and I'll be relieved when my student loans are gone.

2012 goal wrap-up

(goals page is on the navigation bar at the top of the page)

I'll start with the good news. I had a financial goal to eliminate PMI from my mortgage, which we completed in March of 2012 by refinancing. That's $150 per month we're no longer throwing away, so that's good.

In 2012 I set three non-financial goals for myself. They were:
  • (Be able to) do 40 consecutive push-ups
  • Lose 10 pounds (be 158 lbs or less)
  • Learn to cook 5 good staple meals that my girlfriend can enjoy
Of these I only completed the last one. I currently weigh 170lb, about what I weighed at the start of last year. I did set a personal record of 35 push-ups when I did my push-up challenge last September, but I never did push myself hard enough to hit 40. I guess I didn't want it badly enough.

But I did learn to cook a few meals. They're all easy since I'm still a cooking novice.

  • Quinoa and black beans
  • Mushroom risotto
  • Fajitas (this came as a kit but sauteeing peppers onions and beef with taco seasoning is not hard)
  • Various chili recipes (throwing beans and spices into a slow cooker is pretty straightforward)
  • Bul-gogi (my girlfriend didn't eat this one but I thought it was good)
  • All kinds of pasta and pasta sauce
So... I could have focused more on my goals for 2012. I'm still putting together my list for 2013, and I'll be taking these failures into account as a learning experience.


2012 was a good year. We completed my first-ever mortgage refinance. I got a 10% raise at work. I bought a car and took out my first-ever (and hopefully only-ever) automobile loan. My girlfriend (and myself by extension) got two dogs, and I adopted a cat.

I brought my student loan balance from $29,780.23 last January to $6,372.19 today, in part by accruing $8,628.93 in 0% credit card debt — a net debt reduction of $14,779.11, not including my car loan.

I'm feeling pretty good about last year and about the coming year. At the very least 2013 will be another year of milestones. I'll keep making progress toward Mustachianism, like a snowball growing larger as it rolls downhill.


  1. Congrats on your progress during 2012!

    But those credit card balances.. you said it first, but just so there is no question - you're playing with fire! Find out when that promotional rate ends and figure the repayment into your 2013 projections. Seriously, I'm getting stressed just thinking about it!

    1. I've got another bit of fire up my sleeve that I plan on writing about. The good news is that I'm feeling less risky than usual since I've got a few thousand dollars in cash. And thanks for the encouragement :)

  2. Nice work on crushing the student loan this year. And best of luck doing the same to your zero interest credit card balances.

  3. Hi MA,

    Just wanted to say that I did the same 0% credit card thing when I started my business. I has 12 months of 0% and by the end, the business wasn't able to pay it off. I had about 5k left. What I did was open another 0% credit card at month 11, then transfer the balance. There was a 3% transfer fee, but since I held, then paid off the balance for the next full year and never paid the "regular" interest rate, that turned out to be my interest rate for the year.

    I would have preferred to pay it off in full the first year, but I figured 3% interest wasn't so bad.

  4. Good idea - leveraging someone else's money at 0% to save yourself some interest. My three remaining debts (mortgage, student loan, and auto loan) have very low interest rates but you have inspired me to crunch some numbers and figure out if doing something like that is worth my time.

    1. I wish you luck. The biggest problem I've found is that now I have multiple monthly payments to manage. I'm looking forward to the simplicity of being as debt-free as possible.

  5. Glad you got the refinance done with the house last year. I hope you can take care of the credit cards before the promotion expires.