Saturday, June 15, 2013

Stress Debts

Before my December graduation, that looming fear of student loan repayment kicked in but "luckily they won't be due until June", I thought. How VERY wrong I was. I had planned to pay off a $500 personal loan and $500 credit card I had with my credit union from my previous job at the USDA. I figured I could pay those off in 6 months easily with my new job including my car payment, insurance, transportation costs, food, and incidentals. Once again, how very WRONG I was.

First I was hit with a mysterious pain and swelling in my right wrist which required 2 separate doctor's visits and an xray, a routine visit to the dentist which turned into a not so routine visit and need for a filling, as well as trip to LA to visit my boyfriend after receiving my tax return. Well, as my medical bills increased and the price of the trip increased, I realized I was paying more catch up with bills than I was at paying off my debt. I continued to pay the minimums until I could get my money back from the dentist's office....only to find out that they would not be covering 2/3 of my bill and though my out-of-pocket cost skyrocketed. In order to not have my bills sent to collections (I was NOT willing to ruin my credit), I paid off all of those bills.

Then shortly after returning from LA, I got an email saying that my first student loan payment would become due soon. "Um, wait I thought I had 6 months." Well once my loans were sold, things changed and either I failed to pay attention or I never received the information. Either way I was NOT going to ruin my credit with paying late. At this time I was also trying to lose weight and went to a Weight Management Center at Hopkins. I actually got a Groupon for this which was a full work-up and meeting with everyone for $300 which was a drastic discount. I went, started on supplemental foods (which once again came out of pocket) and hoped insurance would cover it. Only to find out later that they didn't cover that center but one at Bayview. Woops. So no recouping my $300. Keep in mind I did read my policy and it stated that it would cover one nutrition meeting/visit a year and any subsequent ones would be on a case-by-case basis based off your need. They never specified it had to be a specific facility. Bummer.

So between mounting medical bills (this including my medications for another condition), I was officially living paycheck to paycheck and struggling to pay everything off. Then in March, I got another email saying, yep you guessed it, another loan was due. Out of my 3 loans, only one would give me the full 6 month deferment. According to various calculators, I made too much per month to qualify for any of the repayment plans. So I continued to struggle and my debts continued to spiral. 

I had tried and failed at maintaining well thought out budgets because new bills would appear, new repairs for my car would crop up, my unhealthy spending habit due to my illness would crop up. So about 2 weeks ago I was able to apply for Income-Based repayment for my student loans since my last loan would take my loan payments over the $400 mark a month. Now I get to pay $0 for 12 months. 

So currently I'm using the Dave Ramsey Baby Steps. I'm actually paying off my credit card and adding money to my savings for an emergency fund. I'm technically doing step 1 and 2 together. I am paying the minimum on my personal loan since it has a lower interest rate. Once I have 1000 in my savings and pay off my credit card, I will finish paying off my personal loan and then that money will go directly into saving for a house and paying off my student loans as well as starting a retirement fund at my job. Even if I get accepted for the PhD program, I wouldn't start until next fall, thus I would lose out on a lot of the benefits I get as a full time employee currently. I do not want to lose out on those due to debt.

Its an ongoing process and I'm always adjusting my budget but I finally feel like I'm on the right track. Ask me in a couple weeks if I feel the say.
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