Monthly Archives: November 2014

Floor 26: An Ode to Water

I drink many things.  Coffee.  Tea.  Tea.  Tea.  Apple cider.  Beer.  Wine.  An occasional ginger ale.

But I don’t drink much water.  Not fancy enough.

Until this past week, when I got slammed by one of those awful late-fall colds that start when your heater first comes on, and makes you bitter and resentful about the entire idea of winter.  One of those colds that makes everything you eat and drink taste absolutely awful . . . .

. . . except good ol’ H2O.

Why don’t I drink this stuff all the time?  Tastes good.  Easy.  Free.

Dog DebtFreeJD agrees.  It’s all she drinks, too.

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Floor 25: Refinance with Sofi

A few weeks ago, I reported that I was considering refinancing with Sofi.  I decided to go through with it.  My last remaining loan was an 8%, fixed-rate, 10-year loan.  I’ve refinanced it into a 3.66%, variable rate, 5-year loan.

Why I Did It

Simple.  My interest rate has been slashed from 8% to 3.66%, or less than half.  Even though Mr. DebtFreeJD and I plan to pay this loan off quickly, that will still save a good chunk of change over the next few months.  And Mr. DebtFreeJD and I like to save money.

In addition, my old servicer was my law school itself.  This was annoying, since I made all my payments through the mail and had trouble keeping track of what was due when.  My new servicer – TruStudent – has an easy-to use electronic platform.  I like it when things are simpler.  This is simpler.

Finally, Sofi has a lot of nice perks.  I signed up through a friend, so we both got a hundred bucks.  They’re sending me a free pie.  Applying for the refinance itself was not a big deal – I just sent in various identity documents, plus information about the loan.  All in all, it took about two weeks, and I think it would have been faster if my old servicer had an easy-to-use electronic interface.

The Cons

The big one, of course, is that the loan is variable-rate, meaning it is tied to the London Interbank Offer Rate, or LIBOR.  So if LIBOR goes up, my loan rate will go up.  I’m not too worried about this for two reasons.  First, Mr. DebtFreeJD and I intend to pay off this loan very speedily.  Second, my loan rate is capped at 9%, meaning that even if LIBOR does head for the skies, my loan rate won’t be that much higher than my current rate.

In addition, my repayment period is now five years, instead of ten, so there is more “due” every month.  Again, that’s OK with us — we plan to pay way in excess of what’s due — but it certainly would not be good for everyone.

If You Are Thinking About Refinancing Your Loans

I say think carefully.  It’s definitely not the right idea for everyone, and you’ll want to carefully read the terms and conditions of any lender that you’re considering refinancing with.  You’ll want to find out things like:

  • Can I defer my loans if I lose my job or something else bad happens?
  • How do the terms of this loan compare to the terms of my other loans?  So, for example, if you’re eligible for loan forgiveness because you have federal loans, you’ll want to take that into account.
  • This is morbid, but what happens to this loan if I die?
  • If the loan has a lower rate because it has a shorter repayment period, can I realistically make my monthly payments?
  • How comfortable am I with risk?  Is a variable rate or fixed-rate loan better for my risk tolerance?

This are all very important questions, and ones you’ll want to think hard about.  For me, however, I probably should have refinanced even earlier – I was held back by inertia, not because it wasn’t a good option.

One Final Note

If you do refinance with Sofi, find a friend who refinanced with them.  Like I said, you’ll both make a hundred backs.  I now have a referral code, but I’m not posting it here, and I don’t want to refer you – otherwise, how would you know that this post reflects my actual feelings on the refinance process?  Like I said: I’m glad I did it, and I hope this gives you some good information about whether you want to consider doing the same.

 

Floor 24: Demand Verification of Paid-Off Loans

Recently, Mr. DebtFreeJD and I paid off two (of my three loans).  Both of the two were owned by the same servicer.

Being a lawyer is somewhat like being a doctor: you become very familiar with all the ways things can go wrong.  Catastrophically wrong.

A few years ago, a file came across my desk of a woman who claimed she had paid off her loans fifteen years earlier, her loans had been sold and repackaged, and the new owner was now pursuing her for repayment.  She didn’t have any proof that she had repaid her loans, but she was sure she had.

I have no idea whether this was true or not, but the mere possibility that it was FILLED ME WITH HORROR.

And thus, now that some of my loans have been paid, I demanded proof from my servicer.  Better safe than sorry?  Call me crazy, but I like having that letter in my file cabinet.

 

Floor 23: Create Feeling of Abundance

While in graduate school, I lived mainly off rice and potatoes.  Literally, not figuratively.

Even though Mr. DebtFreeJD and I are trying to cut our grocery bill costs in November, I am absolutely not interested in returning to my graduate school days.  I spent some time thinking about how to feel like we were living an abundant life while spending less money on food.  Could we cut food costs and still feel like we were living in luxury?

I think the answer is absolutely yes.  I know it is possible because my father is a fabulous cook, and makes extravagantly delicious food, and yet spends very little per meal.  In a later post, I’ll share some advice he gave me on how to achieve the same results.  For the time being, I’ll just let you know about how this same attitude manifested in the DebtFreeJD household this weekend.

First, I organized the rest of our food storage – refrigerator, freezer, baking cabinet, and so forth.  (No before and after pictures here, as I figured you all were much better off not seeing “before” photos.)  Organization made it obvious how much food we have hanging around – i.e., a lot!

Second, we went on our monthly Costco run.  There is nothing to make a person feel wealthy quite like having 1.5 pounds of cheese and 4 pounds of bacon in the fridge.

Third, I know there is a time of day that I am most often tempted to buy food out.  Breakfast.  I love: take-out coffee, bagels, muffins . . . muffins . . . muffins . . . .  I’m often pressed for time in the mornings, and so the urge to reach for my credit card can be overwhelming if there’s nothing easy (and tasty) to eat in our home.  Considering this in advance, I made a 11 blueberry muffins, and 11 pumpkin muffins.  REGARDEZ!:

Bear with me, I am not a food blogger. For good reason.

Bear with me, I am not a food blogger. For good reason.

Those twenty-two muffins have been reduced to about 15 survivors post a full-scale invasion by Mr. DebtFree (full disclosure: I helped).  Nevertheless, that should be plenty to get me through the week . . . considering the huge amount of oatmeal cooked up by Mr. DebtFreeJD on Sunday night.  Plus the bacon.

Fourth, I washed our tablecloth, napkins, and placemats .  Having something nice to eat off of (in addition to something nice to eat) definitely contributes to a feeling of having more than enough at meal times.

Hopefully, we are now well-prepared for a week of frugal, yet luxurious eating!