Last month near the middle of the month, we had some bad news. Ian’s last summer class he took wasn’t eligible for the credit he needed. So, he’s back taking another class. We had planned on making the payments on his student loans starting this month, but since he’s going to be in school for another few months and we don’t have to make payments because he’s still a student, we’re putting the money for the loan into savings for the car we’ll need to hold everyone when baby #2 comes. If we have more than we need, we are going to use the rest of the leftovers for a big payment on his loan, which will be our smallest debt on the debt snowball.
We also discovered we needed new tires the same week, so what little money we had in savings was just severely diminished, but I’m really glad we had them or we would have been really stuck!
What’s New This Month
This month was the first month with the new system on full auto. Last month we paid off all of our smaller debts that were under $1,000 a piece, so we’re only left with his student loans, mine and one medical debt that we’re making regular payments on. Rather than do the true ‘debt snowball’ we’re using a cross between the debt snowball and the debt avalanche payment methods. The snowball method focuses on paying down the balances of your debts from small to large, but the avalanche method has you pay off your debts with the highest interest rates first. Now that we only have 3 debts, we’re focusing all of our little extras on paying my student loans because the medical debt has no interest and the student loans have a 5% interest rate.
Before I consolidated my loans, the payments were going to be $150 a month, so that’s what we budgeted for. After the consolidation my minimum payments were only $83 a month, but we just kept our payments at $150 since we had already budgeted for it anyway.
I’m pretty happy with Digit. I decided to leave the savings there for a while, then I’ll move it into our long-term savings for the car we’re hoping to get before baby comes in February. We also took the time to calculate our estimated refund because we weren’t sure where we would stand with taxes at the end of the year and we should be getting a rather large refund, so we’re hoping that the Digit money might just be able to go toward debt payments or our Emergency Savings fund, but we’ll see. I’m just excited that Digit is working well for us and making this kind of fun and easy.