March Expenses – $884.89

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Here is a breakdown of my expenses for March.

Household $400.00
Entertainment

$129.55

Transportation

 $147.65

Food

$124.17
Phone

$26.81
Health

$56.31

Total

 $884.89

My March expenses were nice and low.  This is the second month in a row that not only did I make my normal goal of keeping my expenses under $1000 a month, I managed to keep my expenses under $900 for the month.  I’m not sure how long I can keep that up. Since I now have to pay $105 a month on my student loan I doubt I will have any more months under $900, but I think I can still manage some sub $1000 months.

This was another month where I didn’t have any unexpected expenses or any semi-annual expenses during the month.  I don’t have any semi-annual bills due this month and I’m hoping I won’t have any unexpected expenses.  If I manage to avoid those expenses it will be another low cost month.

We did take a three day vacation to Big Cedar Lodge near Branson at the end of the month.  This slightly inflated my transportation and entertainment expense, but it was actually a very cheap vacation.  Some of the expense probably could have been counted as a travel expense, but it was easier to just add the expense to the transportation and entertainment categories.

I am starting my Appalachian Trail hike later this month so I will likely have some travel expenses this month. I have quite a bit of free travel credit on my credit cards though so I should be able to erase those expenses.  I’m expecting my April expenses will be very similar to my March expenses except for the addition of the student loan bill.

 

My Student Loan Repayment

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My law school loans have been on income based repayment. Since my income has been so low since graduating law school my monthly payments have been $0. Last year I had a good year for income and as a side effect of that my law school loan payments are no longer $0. For the next year I will have to pay $105 a month towards my law school loans. Some people were quite upset when I posted a couple of years ago about my student loan payments being $0 and not being concerned about my student loans. This might make them happy. Although I liked the $0 payments, since the reason for the new higher payments is that I’m making a lot more money than I used to I can’t complain. I’d rather have the higher income than the $0 payments. You can learn about the different repayment plans at fafsa.ed.gov.

The $105 a month payments will not even touch my principal. The payments will be all interest. That will at least give me a little bit of a tax deduction. My loan balances have steadily been rising ever since I graduated and these payments will probably barely slow the increase in my balances.

There is a pretty big drawback to using the income based repayment plan. Using an online repayment calculator at my present rate I would end up paying over $95,000 in interest by the time my loan is forgiven after 25 years. At that time I would still have a remaining balance of over $255,000 that would be forgiven. The calculator makes some assumptions about my income growth and the change in the poverty line which could change the results quite a bit. Also, the calculator is based on 25 years remaining and I only have about 21 years remaining now. A different calculator showed I would have about $200,000 forgiven. It is pretty scary to see that after making $95,000 of payments my remaining balance could be almost twice as much as my original loans. To make matters worse the forgiven amount is counted as taxable income. If the top tax rate at that time is 40% I would end up with an $80,000 tax bill.

If I were to have my loans forgiven under the public service loan forgiveness program the forgiven amount would not be taxable income. You have to have 10 years of public service to qualify for that program. Working for the government or a non-profit is considered working in public service. I have about 1 year of working for the government or a non-profit since graduating from law school. It now looks like working nine more years for the government or a non-profit would be very financially beneficial. The loan forgiveness would add about a $9000 a year benefit to any non-profit or government job. That makes them a lot more attractive. Or I could wait and see if they decide to make the 25 year forgiven loan amounts non-taxable as well. Given the current amount of federal debt I seriously doubt that will happen.

Now that I have completed my initial degree, I plan to continue my education. Not only will this allow me to improve my earning potential, but I will also have the chance to earn scholarships that will help me to pay for my schooling. Some universities offer a 25% tuition scholarship for their alumni. If I am eligible, this credit will allow me to have 25% of my next degree paid for, whether it is a doctorate, a graduate certificate, or even a second bachelor’s degree. From my perspective, I might as well take advantage of every benefit that is provided for me because it will make me more employable.

March 2014 Goal Update 2

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I thought I would post one more update on my goal progress for the month. The next goal update after this will be a post in early April reviewing how I did on my March goals.

My goal of exercising twice a week is still being met. If I had set a goal of exercising three times a week I’d be failing this goal. My exercise hasn’t exactly been intense either. I am meeting the goal I made though. Now that I know I can meet this exercise goal I can set a more difficult exercise goal in future months.

I’m also meeting my goal of posting a post on Bank Bonuses every day. These posts are done in batches and then scheduled ahead of time which makes it fairly easy to meet this goal. The posts are about deals so I don’t have to put much original thought into them. I just write about whatever the deal is that I’m posting about that day.

My goal of selling, donating, or trashing 31 items is not going well. So far I’ve trashed a couple of items and sold a couple of items. I managed to lose money on the items I sold since I underestimated how much shipping would cost. I probably should have donated those items instead. I’ve put a couple different lots of comic books on Craiglist and have gotten very little response. I don’t have much else to sell other than comic books so it doesn’t look like I’m going to meet this goal. I did have one person tell me they would buy the comics on the first if I still had them. If that happens and I count the comics individually rather than as a lot I’d meet the goal. That isn’t what I intended when I made the goal though so I think I’ll count the comics as a lot. I’ll have to figure a better way of selling them after this month.

As you can probably tell by the lack of posting here I am not meeting my goal of writing 300 words a day. I’m way behind on this goal and I don’t think there is any chance of me catching up on it. I do have a three day vacation next week, but I want to spend it recreating rather than writing. And I doubt my girlfriend would appreciate me spending all of our vacation on the computer so the vacation won’t be a time to catch up. I’m going to set a writing goal again later this year. Once I’m not working I won’t have any excuse for not meeting an easy writing goal.

It looks like I’m going to get half of my goals accomplished this month. That is better than getting nothing accomplished, but I know I can do better. We will see if I can improve by the end of the month.

To Fincon or Not to Fincon

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I have been debating whether to attend FinCon or not this year. I went to the 2011 FinCon and enjoyed it, but missed out on a lot of the activities because I was also working the that weekend. I decided to skip the 2012 FinCon because I was too broke for it be sensible to go. FinCon 2013 was in St. Louis which is just a four hour drive away for me. That made the cost of attending pretty cheap so I bought a ticket and planned on attending. I did show up for the first morning, but I just didn’t feel comfortable with the crowds and left at the lunch break and didn’t make it back for the rest of the convention. It was a weird attack of anxiety like I hadn’t experienced since my high school days. I’m sure almost everyone would have been cool and nice if I had stayed and actually talked to people, but I wasn’t up for socializing that weekend and basically wasted my convention ticket.

If I buy a ticket to FinCon 2014 and end up not using it, that would be an even bigger waste of money. The price of a ticket is a bit higher this year and I’ve already missed out on the cheapest ticket prices. Plus, it will cost me more to fly or drive down to New Orleans. I didn’t bother getting a hotel last year. The weather was nice and I knew of nearby places that I would feel safe sleeping in my car so that is what I did. I don’t know New Orleans well enough to be comfortable sleeping in my care there. I’m not sure if there is anywhere close to the convention that I’d be able to safely sleep in my car. It may still be a little warm to sleep in my car as well, since the convention is earlier this year and in a warmer location.

Other than the financial aspect, my reason for being unsure if I want to attend is that I don’t have any plans to change my blog. The convention seems to be about growing your blog and making it into a big business. I don’t really want to turn my blog into a business. I like to write for my blog and don’t want to spend much time doing anything else having to do with the blog. It would be nice to have more readers and more engagement with my posts, but if that means spending hours each week on social media, constantly tweaking my design, experimenting with plugins, and developing an email list than I’d rather just be content with my blog as it is. For those reasons, I’ve decided not to attend FinCon this year. I do reserve the right to change my mind.

February Savings Rate – 48.32%

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I made $4138.30 in February and put $2000 in savings for a savings rate of 48.32%. That is just a bit higher than last month’s savings rate. I’m happy with that savings rate. I’m not putting money into savings quite as aggressively as I did last year. I’m planning to hike and do a bit of traveling this year after I finish my tax job. It doesn’t make any sense to put money into savings and then have to pull it right back out for travel expenses so I’m trying to save a little travel money outside of my savings.

My safe withdrawal rate decreased to 42.89%. That is still a long way from my goal of a 4% SWR, but at least I’m continuing to make progress. I should be able to get my SWR into the thirties this month. The 4% SWR translates into having 25x your annual expenses in savings or 300 months of expenses in savings. Once I reach that point I will consider myself financially independent. I now have 27.97 months of expenses saved compared to 25.91 months of expenses saved last month.

Keeping my expenses down helps my SWR a lot. I use my trailing 12 months of expenses when determining my SWR. Last March was a low expense month so even if I have another low expense March this year I won’t change my my trailing 12 month average much. May and June of last year were high expense months. I’m hoping to replace them with low expense months this year. If I am able to do that I should be able to reduce my SWR quite a bit even if I don’t manage to save much money those months. My current average monthly expenses based on the last 12 months is $1196.77. If I were able to get my average monthly expense down to $1000 then my SWR would only 35.84%. I think it is possible to get my average monthly expenses down to $1000 without impacting my quality of life and will keep working on getting my expenses to that level.