The big move to South Carolina is fast approaching! We do not have a set day, but we know it will be in late June. I am busy making arrangements...I applied for my South Carolina dental license last week. Hopefully it won't take as long as it did to get my Iowa license (almost 2 months!) I am also working on getting my new contract through Aspen. There are several offices in SC; however, only one of them is within 2 hours of where we will be living (I don't think the recruiter quite understands this). So, worst case scenario - Reid rents a 1 BR apartment in Charleston and I rent a 1 BR apartment in some other city a few hours away until I pin down a position closer to Charleston. Again, still working out the details.
In preparation for the move, we are trying to get our finances in order. Our student loans went into repayment in December, and we applied for IBR (income based repayment) to lower the payment amount. According the IBR calculation, if more that 15% of your income goes toward student loan payments, you are incurring a partial financial hardship. Problem is, if we only make the IBR payments, we don't even cover the amount of interest we accrue in a month. We would hate to be making these payments and not be making progress, so we met with a financial planner on Friday to see what the best approach would be. Here's what we learned:
Since our interest rate on our loans is 6.6%, the best thing to do is get them paid off ASAP! Jim, the financial advisor at Wells Fargo who we met with, suggested we try to get them paid off within 10 years. This is quite a daunting task, since, as Reid puts it, "the amount of our student debt could buy a VERY nice house in Des Moines!" So, imagine trying to pay down a mortgage in 10 years on our income....pretty scary. After meeting with Jim, I came home and sat down to make an excel spreadsheet. Since we have our "emergency fund" saved up, Jim suggested that all other "surplus" cash go straight towards student loans, starting with the smallest one and working our way up. In my spreadsheet, I calculated the approximate days by which we should meet our goals. When we reach these goals, we will use some of our savings to go on a trip or celebrate somehow.
Jim said not to buy anything until the loans are paid off...like a house, etc. If we stick to our spreadsheet, everything will be paid off by January 2023!! Ugh, sounds like so far away! I think that's why it is important to break it down and celebrate along the way. For example, when we get below 100k on the larger loans we will celebrate, and then again when we get below 50k. On the bright side, the smaller ones should be paid off in less than 2 years if we make our goal payments!
I swear by Mint.com for budgeting. It lets you track everything to see where your money is going. Very powerful. Hopefully the big move to SC won't throw off our budget too much. That's all for now. Happy Sunday!
