Financial Update: June 2017 - Pausing the Snowball...Again

June has been an exciting month. I got a start date for a new full-time, day shift (!!!) nursing job with higher pay and benefits. We put in an offer on a house, went through some negotiation, and are currently under contract and awaiting a home inspection. Big life changes!

And often, with big life changes comes financial insecurity.

After estimating and adding up all the fees that are going to be involved in the home-buying and moving process, we've decided to put the debt snowball on hold again while we throw every extra dollar we can find into savings.

As much as I hate to slow down the debt payoff (AGAIN), we have good reasons for doing this. The last time we moved, we were totally unprepared. We only had $1,000 saved in our Baby Step #1 emergency fund. That was it; per Dave's instructions, we'd thrown all of our other income at our debt. So, we blew through that $1,000 in no time. It cost over $700 to rent our U-Haul and $300 to have our rental duplex's carpets cleaned. Just like that, we were out of cash, and we had deposits and fees and miscellaneous expenses popping up everywhere.

Naturally, we resorted to swiping our then paid-off credit cards. One poor decision led to another and as a result, we racked up around $8,000 in credit card debt. On ZERO BALANCE cards that we had spent the last year busting our butts to PAY. OFF.

But I digress.

Seven months later, we've replenished our $1,000 emergency fund. We even have some sinking funds going for insurance, vacation, Christmas, and a new-to-me car when my Honda lease ends in October. We don't want to dip into any of that.

But. Moving is expensive. And even with the 100% financing we first-time-home-buyers qualify for, the initial costs of buying a house are adding up quickly.

We already had to shuck out $500 this month in earnest money. We know the home inspection is going to be around $300-450. Then there's an appraisal fee. And a termite inspection fee. And administration fees. And attorney fees. Then there's all the usual, obnoxious moving fees. We'll have to pay to transfer our Internet and utilities (and I hear Huntsville Utilities' transfer fee is around $200...absolutely ridiculous).

Plus, if we close on this house at the end of August as scheduled, there's a chance that our first mortgage payment will overlap with our last apartment rent payment in October.

Oh, did I mention my car lease ends in October also? I'll be needing a Dave car then.

And, since I'll be changing jobs next month, I may have a brief gap in pay.

Soooo yes. Definitely think we're making the right decision here to buckle down and save all our snowball money.

And hey, if we end up not needing it all for moving expenses, we'll have free money to throw at Citi a couple months down the road!

I gotta be honest, it's pretty dizzying to type all of this out. The seemingly endless list of fees sickens me and pushes me toward the edge of panic. However, last year, we had three weeks to find a place to live, sign papers, pack everything we owned, and drive halfway across the country. This time around, we have four whole months to prepare for a move just outside the city limits.

And once we get situated, if everything works out as planned, we should be able to resume that debt snowball with force like never before. Our estimated monthly mortgage payment is almost $300 less than our current rent payment. My hourly pay rate will be going up considerably. My too-expensive leased Honda will be out of our lives and will hopefully be replaced by an affordable used vehicle with superb gas mileage.

It's going to be a wild few months, but I'm optimistic.

The following is pretty underwhelming, but here's the debt payoff progress for June. This is the first month that we're back to minimum payments. And it sucks.

As you can see, the interest is killing us. Especially on the Chase card. When I paid the minimum payment for June, before they charged interest, the balance was below $5,000. Now look at it, higher than last month's balance. UGH. All because the interest is over 25%. We're looking into transferring the balance of Chase to Citi, because Citi has lower interest. Actually they're running a 0% APR for 18 months balance transfer offer. But with a mortgage and possible car loan coming up soon, we don't want to do anything that could affect our credit. Thoughts?

A couple of big milestones are evident on the board this month, though! For the first time, Matt's car loan through Max is now under $10,000, and my remaining total payments toward my Honda lease are less than $1,000! So not a total bummer.

How did you do this month? Have you ever put the debt snowball on hold to cash flow something like this? What are your thoughts on balance transfers, especially in a time when everyone is checking your credit score?

1 comment

Kate Kendrick said...

I'm so excited for ya'll! We just closed on our house June 6th. The process of buying a home for the first time is definitely exciting and nerve wracking. I had lot of anxiety about it in the beginning even though our budget allowed it. Once you finish all the stressful parts like inspection, moving, and closing it is so nice just to be in your new home. I'm certainly not a home buying expert, but since the process is fresh on my mind feel free to contact me if you have any questions. I might have an answer. Lol. Congratulations !