When $5,000 shows up in your mailbox.

It was a bit of a surprise when I opened the envelope last night, although it would be impossible to pretend that I didn't know a check was coming. Before my grandfather passed away, he explicitly expressed an intention for his four grandchildren to receive the funds left in his checking account. (That and all other assets were included in his trust, so my uncle and my father could perform transactions on his behalf.) Still, I knew some of the money had to go to funeral expenses, and I was expecting less than this.

And of course, it's all somewhat fraught, because it reminds me how readily he donated money during his lifetime.

I still want to do something worthwhile with the money. So I'm sending all of it towards the first tier of my credit union loan, which should allow me to eliminate that debt by the end of June, 15 months ahead of schedule. Why?

It will make the biggest impact on my cash flow. This loan is the single largest fixed expense I have after rent. Even though I'll be paying more on the second tier of the loan when the first one is paid off, I'll still free up about $150 a month for savings or other loan payments. (Or, given that I'll probably sign another lease to start in June, increased rent.)

It will eliminate my highest-rate debt. The loan was made at a quite reasonable 5.9% APR, but there's a gap between that and 5% on my Perkins loan, and a still greater gap between that and my 2.75% rate for my Direct loan. And of course, tier 2 of the credit union loan is at zero percent. (Long story.)

It will improve my debt-to-income ratio for when I purchase a condo. As I said, $150 a month will no longer be earmarked toward paying off debt, which will make the lenders (not to mention ME) more confident about my ability to manage a mortgage and the other attendant costs. Eliminating my Perkins loan entirely would lower my monthly obligations by less than $50 a month, which is far less impactful.

I could contribute this to the condo fund directly, of course. Boosting my downpayment would be nice, and I'll be saving still more to that end after paying off this loan. But lowering my monthly debt payments is probably more important as a first-time buyer.

And finally, it will give me more "outs" in an emergency. My emergency fund is based on continuing to make all my loan payments at present levels. However, should said emergency last longer than a few months, I have fewer options for this loan than I do with others. Borrowers can request that federal student loans be granted a deferral or forbearance. My tier 2 loan could presumably be dropped back to present payment levels in a real emergency. With this one, however, it's "make your payment every month."

Now, in a worst-case scenario, I could initiate a balance transfer from my credit card for the much smaller outstanding loan and give myself more time to get back on my feet. I have no intention of actually doing this, mind you. But it gives me comfort to know that I now have the option.

I think my grandfather would be glad to know that I used this money for something meaningful. And I think it will take a lot of worries away from me.

Finally!

My PLUS-style loan is DONE, finished, paid off...it is a retired obligation.

Now to tackle the rest of them.

But first, I must send a very thorough thank-you note to my dad (I made a few payments, but the lion's share of the payoff was from him).

Oh, and I got some cash gifts for some reason [grin], so I will be going out to celebrate tonight at an exceptionally expensive (but by all accounts, well worth it) restaurant. The cake there is approaching legendary.

Okay, so I'm not *completely* immune to psychological effects.

The leading digit on my consolidated Federal loan, by far the largest balance (and lowest rate) of all my student loans, has just dropped by one.

I know this is not as important as, say, improving the ratio of interest to principal for each succeeding payment.

But still. It's nice to see that tangible sign of progress.

Tomorrow, I am off for my much-needed long weekend with my grandparents.

When I return, I get to do that stuff I said I needed to do ten days ago.

And then I get to look at carnival submissions for the Festival of Under 30 Finances! People have until April 4 to submit, but people who send things in early will make me smile.

People who send in entries that have only a tenuous connection to the festival topic (it's "under 30" finances, not general personal finance, investing, or other consciousness-raising) will NOT make me smile. I reserve the right to ignore any submission that doesn't meet the submission guidelines.

At any rate, have a lovely weekend. I fully expect to.

Read your loan terms and conditions CAREFULLY.

After a much-needed Thanksgiving Day trip to see my dad and brother (and some good friends), I feel much more ready to take things on. I'm still probably going to post sporadically while I'm in work deadlines, but I'm not feeling nearly as overwhelmed.

Which is good, because I had a challenge to deal with today. I decided last month to make a loan payment before the grace period was over, thus chipping away at my interest. This pushed the due date for my payment up by another month. So I assumed that my payment for this month, the first scheduled withdrawal, had been pushed up as well. I wanted to keep making the payments, so I sent one in yesterday evening.

When I checked online today (because I am obsessive and check my balances at least every two days), I discovered that I'd had TWO loan withdrawals. After a call to my member services department, I discovered that the withdrawal would start on schedule no matter when my payment was officially due. The MSR agreed to reverse the withdrawal on the second payment, and I agreed to wait for automatic withdrawals in the future. Fortunately there was no real harm done. If I'd been less vigilant, however, I could have found myself overdrawing my accounts by a lot. The moral of the story is to know how your financial institution will collect your payments, and proceed accordingly. And if you aren't sure, ask.

On a lighter note, I did NO Black Friday shopping this year. I needed to help my brother out with something that kept us away from the malls, and also visited a friend. In fact, the only money that I really spent on my trip was for cab fare to and from my local airport.

I did do a bit of shopping yesterday. My family has a tradition of giving White House ornaments to each other every year. Last year, I discovered another set of commemorative ornaments that are similarly designed and often prettier. So my aunt and I made a trip down to [Restored Historical Estate] to purchase this year's model. When I got there, however, they had a two-pack of older ornaments on sale for $8 less than the current-year single ornament. And the current year never completely sells out, so I expect to be able to pick that one up at a discount next year. So I picked up the two-packs for a couple of people, along with some foodie gifts for some family friends. My aunt, bless her heart, bought LOTS of ornaments and some books for her parents, who are big history buffs.

I love not having to stress over shopping. I'm still not quite done, but I'll easily find everything else I need in the next four weeks. And this year, I get to stay put while my family has Christmas in town. So no extra travel worries!

How often do you spend almost $1500 in a day?

Hopefully, the answer is "not too."

I picked my car back up from the body shop this morning. I paid another $120 over my deductible because some brackets were missing from the bumper after the last repair. (I'm going to call my old insurance company and let them know that the repair shop didn't perform to standards. If you're asking why I'm not calling my current insurance company, please reread the last paragraph of the second link above.) But on the bright side, my car looks FANTASTIC. It's driving well, the headlight is bright, and you'd not know it had been in an accident unless I told you. Money well spent.

Once I got into work, I made my first full payment on my
no-longer-student loan. Technically, I was given a 90-day grace period to repay it and could have waited until next month, but I didn't want to accrue any more interest. (Last month, I was paying off my old loan, so I made a much smaller partial payment.) I still paid a decent chunk of interest on this first installment, but it was nothing like the frustration of putting an extra $20 towards the $220+ payment and still finding that your principal balance decreased by...$26.

I've taken some lumps, and I'll undoubtedly take some more, but I feel like I'm moving ahead and that's a good way to start the weekend.

And it begins.

I transmitted the payoff balance for my private student loan today. It's one of the best feelings in the world.

(Of course, it wasn't a true "payoff." I've only refinanced it, thanks to my lovely credit union and their "summer loan sale", but six years to pay it off as opposed to fourteen and tens of thousands less in interest sounds pretty good to me.)

Should this all go well, I'll discuss a little bit about how I got here, and what I would and wouldn't do again. Should this all go very well, I'll discuss a lot about how I'm going to keep moving forward until ding-dong, the debt is gone. And should this all go superlatively well, I might even discuss something that somebody else will find useful.

Long time lurker, first time blogger. Looking forward to diving in.