A Week of Unplanned Changes

We are nearing the middle of July. I can honestly say that I am starting to panic a little bit right now about our budget. The numbers say we haven’t gone completely off course, but my mind is telling me something else. Jason’s first paycheck of the month was a little bit lower than we expect during our summer “busy season”. It wasn’t a huge hit, but it came at a bad time. Simultaneously I had almost a full week off of work during the week of July 4^th because we have very few clients around holidays. I have not yet seen my first check of July, but it is coming tomorrow. I don’t expect much.  And, of course, I realized at the last minute that our car insurance renewal is due August 1^st instead of September 1^st as I had previously thought, which left me only one month to come up with the extra $500.

So here I am today, looking over everything. Luckily with the money left over at the end of June from my final paycheck I did manage to pay quite a bit of the bills for July. Our rent was already paid out of savings since we had set that aside for the move anyways. I paid all of our student loans in advance, except for the AES loan. Pretty much anything that was due in the first half of the month was paid by the first week of July. Jason’s paycheck came on the 6^th and we have been steadily dwindling away what was left of it. I paid the first half of August rent ($375), the phone bill, the remaining Xcel bill from our old apartment, set-up fees and 1^st month of internet here at the house. Plus there was groceries and gas money and babysitting. As of today we have $167.74 in checking. Whew.

Tomorrow my check comes in. I am only expecting about $290. Of course, my checks are usually a little bit higher ($20-30) due to our incentive bonuses and travel time. But I really don’t want to start depending on the money that I don’t know I’ve earned. So if I take $150 of this week’s leftovers and add it to my paycheck tomorrow I should have about $450 to put toward insurance. Now, to be clear here, I could always just pay the insurance in installments, but it would cost us $150 extra over the next 6 months. I like my discount for paying in full and it is one less thing that I have to worry about on a monthly basis.

Anyways, I still have not seen the water bill for the month, and I have yet to see a gas/electric bill for the house, and that is why I am starting to panic. I have actually been trying to revive our lawn and garden which has meant a lot of time with the sprinklers running. We picked up an AC unit to cool upstairs, and we only run it at night when we are getting ready for bed, but I still have no idea how much that is costing us.

It is also worth mentioning that a strange turn of events with our school paperwork has led to some of our student loans going into ‘In-School Deferment’. I had anticipated that we would have loans do this, but for some reason the AES loan went into deferment this time, when it had previously been ineligible to do so last semester. On the flip side, some of the loans that went on deferment last time did not do so this time. I don’t know why this happens, or what the deciding factor is. I’m pretty sure it is a matter of people sending the paperwork to only one or two of the lenders instead of all 3 or some other form of mis-communication. This brings me to a cross-roads with my debt journey. The AES loan being on deferment saves us $230 a month, but at the same time interest is accruing at a rate of ~$155 a month. We have been making payments on this loan for several years and have not even touched the principal yet, so it is almost gut-wrenching that the loan is back on deferment and we still are not making progress.

I have to make a decision. I have no intention of just pocketing that money. It will still be applied to the loans, but I can continue to make $230 payments on the loan as normal, and will make progress on the loan slowly and steadily. My other option is to lower my payment to only cover the interest each month, and apply the remainder to my current snowball on my first loan payoff. I am really, really torn here. I refuse to let any more interest accrue on that loan and remain unpaid. I am desperate to see some difference in the principal, however small. The first option means that our first loan payoff will not happen until July of 2013, but the amount of the AES loan will drop from $26,700.06 to $25,806 in that 1 year period.  The second option will allow us to pay $75 extra on our primary loan payoff each month, which means that the first loan will be paid off in March of 2013, but the AES loan will only drop by about $4 over that 8 month time period. In either case the AES loan will wind up being paid off at the exact same time, so that really isn’t a factor. I just think it would be nice to start seeing some bigger numbers come off of the smaller loans, and really start to watch the loans go away in the much closer future.  There is a third option, I can take the full $230 payment from the AES loan and apply it to the current loan payoff, which is soooo very tempting. It would mean our first loan would be paid off in November of this year, and our second loan would be paid off in March of 2013. That is two loans paid off by the time we get our tax return next year. This will be a pretty big boost for Jason’s credit score, and a huge bonus when it comes time to apply for the mortgage because our debt-to-income ratio will be much better. On the downside, the interest on the AES loan would be totally out of control in no time. Once again, it really would not affect our ultimate payoff for the AES loan at all, but just the thought of that untouched interest accruing makes me nervous. I must decide. 


I also have not dealt with that payment on the credit card yet, now that I made the mistake of nearly maxing it out again with all of the supplies for our yard. And I have yet to set aside the $350 for savings and $100 for the monthly bonus payment on the loans. Oi. Things are going to be close this month I think.