How We Booked Free Flights for A Family of Three to Hawaii

Every few months, I get this insane itch to travel somewhere new. We just got back from our trip to Couer D’Alene in June but the travel bug is strong. And with a toddler in tow and number two on the way, our list of ideal places to go is quite short.

This go-around, Mike and I decided we wanted a babymoon. Well, if you can call it that when you have a very active human being running around. We thought about leaving Casey behind with Lolo and Lola, but then we felt like, “This is going to be the last trip, just the three of us!”. It seems like a silly thought, considering he is only 14 months old. Our family of three era is so short-lived, so we decided to commemorate it by bringing him along. (Much to our potential regret later).

And wowee, we’ve done it again! We secured free flights for our family of three to Hawaii by travel hacking with credit cards. If you want to know how, this is the post for you.

Travel Hacking

I have written so many posts about travel hacking. In our 7 years of marriage, Mike and I have visited ten countries and countless places around the US for nearly FREE. We use credit card rewards points to book flights and sometimes hotels. For the sake of not being too repetitive, I am just going to list my previous posts on travel hacking here.

How to Get Free Flights for a Family of Three to Hawaii

Some people say travel-hacking isn’t worth it these days but I would like to push back on that. We still managed to get free flights for a family of three to Hawaii using travel hacking. The normal cost of these flights was $1,800 total for the family. I would consider that decent savings! And we did it by opening one credit card: American Express Gold Personal Credit Card . Right now as of July 2024, you can get an extra 30,000 rewards points by using my referral link for a whopping sign-up bonus of 90,000 rewards points. That is 50% MORE POINTS.

All you do for travel hacking is sign up for credit cards to receive their massive sign-up bonus. You have to hit a minimum spend within a particular timeline. In American Express Gold’s case, it is $6k in 3 months. If you think that’s difficult to do, maybe you’d want to check out my post: Ways to Meet Credit Card Minimum Spend to Earn Sign Up Bonus Faster Without Spending More Money. There are a lot of tricks you can use to get to such a big number. The important thing is to not miss the deadline. The sign-up bonus points is the only thing that makes opening new credit cards worth it. I particularly like American Express Gold because it gives 4x the points on groceries and dining out. That is the majority of the spending we do on a daily basis.

I just wanted to take a minute to share our number one travel hacking trick: We open credit cards before a planned large spend. For example, buying a new home, renovating a home, welcoming a baby into the family, going on another trip, or the holidays are all great times to open a credit card. You just put those big ticket items on there in order to reach your minimum spend quicker. Then you and your family of three can go to Hawaii!

We are so excited because we used one person’s Amex points to pay for our Hawaii trip. Next summer, we plan to use the other person’s Amex points to fly our family of four to Europe (babe flies for free). How does gamifying travel sound to you?

Lowering Mortgages with a No Cost, No Points Refinance

Today, I will be talking about No Cost, No Points Refinance as a way to lower monthly mortgage payments without paying a costly closing cost. As some of you may know, we recently bought our third home in September 2023. Unfortunately, we had to trade off our 3% interest mortgage at our previous townhome for a 7.3% interest mortgage on our single family residence. Timing wasn’t in our favor as we saw family growth. But this didn’t deter us from making the move! However, within 6 months, we have already refinanced.

We used a lender who offered no cost, no points refinance. Our mortgage interest went down 0.5% ( from 7.3% down to 6.8%). This led to a reduction in our monthly mortgage payments of over $1000! Since we have only been at our new home for 6 months, this didn’t reset the timeline of repayment by much at all. Our mortgage now ends 6 months later than it would have. In the long-term, this is inconsequential. Now we have an extra $1k per month to put towards other things.

I wanted to share this no cost, no points refinance because people may not be aware of this option. If you are looking to refinance, you need to make sure the numbers make sense. The mortgage interest rates haven’t gone down much in the last 6 months. Because closing costs are high, it may not make sense to refinance in order to save a fraction of a percent, since your savings may be offset by the cost of refinancing. I bet that dissuades many people from lowering their monthly payment. However, it does not hurt to ask your lender (or other lenders out there) if they are willing to do a no cost, no points refinance for you.

No cost has to truly mean no cost. How are lenders able to do this? They can only do this if they give you an interest rate that’s slightly higher than the lowest possible. The costs are hidden in the rate. However, if that interest rate is still lower than the highs we have seen in the last year, then it is totally worth it to me!

One con is that it resets your loan timeline. But I am assuming if you have a high interest rate, you recently closed your loan. Everyone pre-2021 probably refinanced or closed at or around 3%. Meaning, those with 6.5% interest rates and higher likely closed in the last two years. Resetting your mortgage repayment timeline won’t be too big an effect if that is the case. I would prefer to take the lower monthly payments and invest that extra money into something diversified that will give higher returns, because I know that I can always pay off my loan earlier with those returns if I wish to. I also just like to diversify my portfolio and increase cash at hand today.

If you want read other home-ownership posts, check out:

Wipe years away from your student loan repayment with the IDR Waiver

Did you know about the IDR Waiver?!

The income-driven repayment (IDR) waiver is a one-time account adjustment that was implemented by the Biden Administration and it is a BIG DEAL! Millions of borrowers could see their entire balances wiped away completely, including you.

Any time you’ve spent in repayment and many periods of forbearance or deferment can now be counted toward the 10-year Public Service Loan Forgiveness and 20- or 25-year IDR forgiveness programs. To qualify, many borrowers may need to consolidate their loans. But hurry! The Administration’s April 30, 2024 deadline is fast approaching. Do not miss out on this opportunity to cut years off your repayment journey.

Our friends over at Student Loan Planner are the experts in all things student loans. You can take action on your own, but if you want to discuss your student loan situation with a professional CFP® or CSLP to make sure you’re picking the best option for you, we highly recommend Student Loan Planner!

Without knowing the nuances of student debt, you could make a mistake or miss an opportunity that is COSTLY. Make sure consolidation is the right move for you.

The Debtist readers can get $100 off a 1:1 consult by booking through my link!

If you thought this post was interesting, check out my post on how to adjust your 2024 tax returns to optimize your student loan repayment with the SAVE program.

Tax Filing Changes with the SAVE Student Loan Repayment Program

If you haven’t already heard, there is a new student loan repayment program that replaced the REPAYE program. It is called the SAVE program. It has better terms than REPAYE and I wrote a diddy about it here if you want to learn more about it. I like it so much that I switched our aggressive repayment strategy to the SAVE program for the time being! The pandemic changed my focus from debt annihilation to growing my wealth and I have been enjoying this track. If I switched gears again when the loans came back, I would disrupt my momentum like I did in 2020. I am just not ready to relive that. The snowball is snowballing, my friends. Don’t get in the way. Now, there are some tax filing changes we had to make in order to get the full benefits of SAVE’s terms. Did you know about it?

Tax Filing Changes for the SAVE program

Previously under REPAYE, monthly payments were calculated as a percentage of the household income (the borrowers and their partner’s combined). The SAVE program has the ability to consider only the borrower’s income, even if they are married. Since student loan programs work best by paying the LEAST amount possible every month, SAVE helps borrowers by reducing what the borrows pay back during the program period. However, the minimum monthly payment is calculated from the most recent tax return. If you are married and in a two income household, you need to file Married Filing Separately in order to only count one income. Otherwise, the SAVE program will count your spouse’s income when deciding how much you pay back.

This is a painful point for us in 2024. My repayment starts in April, and the last tax filing which for us was 2022. And yes, we filed Married Filing Jointly at the time since SAVE didn’t exist until Fall 2023. My 2023 tax return will not be filed in time for them to recalculate my 2024 repayments. My husband and I have similar incomes, so for this year, we will be paying a larger sum than I would like under SAVE. Moving forward, we will file Married Filing Separately, which will cause us to lose out on a few thousand dollars in tax benefits. But it will cut our monthly repayments to my student debt in half, and save us more money in the long run.

Save Money with The Student Loan Planner

I think this was worth mentioning. You could be losing thousands of dollars if you aren’t considering your student loan repayment when you file taxes. Since I am not a student loan repayment specialist (only an avid geek about the subject), I would highly recommend professional services when making financial moves around student loans. It is nuanced, sometimes convoluted, and sometimes vague. But with the right guidance, you could be saving thousands of dollars. My favorite advisors are with Student Loan Planner. They saved me tens of thousands of dollars, just by pointing me to the correct repayment plan. Schedule a call with the Student Loan Planner team to see how they can help you. Your financial future rides on the way you handle student debt.

Photo by Tyler Franta on Unsplash

Opening a HYSA for my Infant Baby

Yes, I opened a High Yield Savings Account with Marcus for my 9 month old baby. I am a big proponent of HYSAs, as they are a great way to save money that you don’t want to risk losing. HYSA’s have a high interest rate (with my referral to Marcus you can get 5.5% APY at this time!), earning you 550X more than what you would get at a traditional bank’s savings account. Our HYSA account makes us decent passive income. Unlike stocks, the HYSA has a guaranteed rate of return every month. And we don’t feel any risk with losing our savings. If you want to learn more about High Yield Savings Accounts, check out this post I wrote.

Why did I open a HYSA for my Infant Baby?

My son is 9 months old. So why did I open a HYSA for my Infant Baby? Recently, my son received two monetary gifts. The first was from his aunt, who wanted to start a tradition of gifting him $50 for Christmas so that he could save money for a Euro Trip when he turned 18 years old. The second gift was from two friends of ours, who gave him small cash for Chinese New Year. Which got me to thinking, how should I best guard his money?

I’ve decided that I wanted to keep his gifts separate from our accounts, because keeping track of that can be a nightmare. I also figured, even though investing his gifts in stocks will give a higher rate of return in the long-run, I did not want to risk losing money in his portfolio. With stock volatility, it would be unfortunate if, at the time he turned 18 years old, the market should choose to plummet. Because my sister-in-law’s wish was to fund a Euro trip before college, I knew that it was time-dependent. Lastly, I knew that a regular savings account at a bank would yield 1/500 of what a Marcus HYSA would. So that is why I chose to store his monetary gifts in a HYSA account.

How to open a HYSA Account for an Infant Baby?

So, you can’t really open an account for an infant baby alone. However, you can open a separate account under your name and make your infant the beneficiary. At 18 years old, you can also switch your account to a joint account so your child can access the funds. It was easy to open an account. I just did it online, and if you want to take advantage of the extra 1% APY for the first three months, you can sign up using my referral link here. Now that it’s all set up, it’s a matter of depositing his monetary gifts into my Chase Personal Checking Account and then sending it to his Marcus account.

(PS: It is imperative that you name your child and husband the beneficiary to ALL your accounts if that is what you wish in the event that you pass. In some states, your assets do not always transfer to your spouse or child automatically. Some states will deem your parents next of kin, so make sure your assets have the correct beneficiaries tied to them.)

To summarize, a HYSA is a great tool for your infant baby’s savings because:

There is no risk of losing the money.
It earns 500X the interest of a traditional bank’s savings account.
The money will automatically go to the beneficiary you named shall something happen to you.
At 18 years old, he can have access to his money.
It is easy to use.
I can keep track of his gifted money without confusing it with our own money.

If you are a new mom or have kids but are not sure how to help them financially, check out my post Essential Finance Moves Parents Can Make For A Newborn Baby. Set them up for future success today!

Photo by micheile henderson on Unsplash

You Don’t Need to Be Debt-Free to Be Financially Independent

I wanted to put this on here for anyone who needed to hear it as part of my “more-hope” campaign for 2024. I learned this later in life, which I think is normal in that financial independence has its stages. However, I wish I learned it sooner. When I was in my late twenties and newly graduated from dental school with nary a drop of financial literacy to my name, I thought that being financially independent meant you never had to work a day in your life ever again. Over time, my perspective matured. I now know that you don’t need to be debt-free to be financially independent. I now define financial independence as separating your life from needing to work in order to make money to support your lifestyle. Which means you can actually be financially independent at a younger age, making life decisions without worrying about making money.

When did I change my mind?

I didn’t learn that I could reach FI (financial independence) before paying off my student debt until I did the unthinkable: I quit a job I hated without plans to work again in the near future. I was able to do this by increasing my savings to the point where I had the “FU money” to walk away. At the time, I had mastered control over my budget using an online budgeting tool called YNAB. I still use YNAB to this day and now have enough savings to buy my husband and I 1.5 years of non-work while keeping all our current monthly payments including our house mortgage. You can learn to set up your own budgeting tool with my free course as well.

After I quit my job, I realized the world didn’t fall apart. I didn’t need to look for another job as people came clamoring over, asking me to return to the workforce in all sorts of fields. Surprisingly, other people don’t seem comfortable with the idea that I could get off the hook and not work. I had to set my boundaries and limitations when I did end up re-entering. And guess what? They honored all of it! When I asked for less days, they gave it to me. When I asked for more pay, they gave it to me. When I asked to work from home, they gave it to me. By quitting my job, I had full autonomy of my life. And my life became 100% better, because it was genuinely about what I wanted. My wealth continued to grow even though I was working 2 days a week at the time. Since quitting a job I hated, we sold our first home, and bought two more homes, leveling up each time. We now own a house that is double the home value of our first. We tripled our retirement account bucket. And our savings sky-rocketed.

Cash on hand buys freedom.

At the same time, I saved enough money to pay off my whopping student debt by the time debt repayment resumed at the end of 2022, 7 years after graduation just like I planned. I chose to keep the debt because I learned in the last few years that having cash on hand is what buys us our financial independence. At the same time, our cash savings is earning us 5.5% interest in our Marcus High Yield Savings Account (my readers get an additional 1% APY bonus if they sign up through my link here). (I recommend a HYSA for everyone’s emergency fund BTW!) And with the new SAVE plan for student loans, we are actually making money by holding on to it!

Today, we have enough accessible savings to be able to walk away from both our jobs and live 2 years while keeping our current expenses such as our house mortgage. If we got rid of everything along with our jobs (aka sold our homes and cars but keep our retirement accounts and investments), we could travel the world for more than five years without ever needing to earn money or changing our spending habits. At the same time, our retirement assets will continue to grow even if we don’t make contributions to it. Because I don’t predict we would NEVER return to the workforce, what I now define as financial independence is the space to not worry about job security. The margin that savings can provide makes a huge impact in our lives. I also don’t predict we would both lose our jobs at the same time. However, we may both choose to walk away to take Casey on a grand adventure around the world before he starts school!

I would like to attest to the fact that we are by no means special. Anyone can achieve enough financial independence to walk away from a toxic work environment. By choosing to live intentionally, you can spend on the things that add value and skip on those that don’t (surprisingly a long list!). Start by budgeting out your spending to plan ahead. Then save the rest in a high yield savings account. If you have a big dream (such as switch careers, pursue a passion, travel the world, or start a family) but have been too afraid to voice it because it might be too big, this is the year to face it head on! With a little bit of work, you too could reach FI sooner than you once thought.

Solar Panels Is a Money-Saving Investment

The reasons to go solar are plenty. For one, the environment. Another reason would be to power your EV vehicle. Maybe you want to be self-sufficient and live off the grid? Or, perhaps you simply want to avoid the electric company’s price hikes. Remember January 2023? Oof! Those are all great reasons. But my favorite reason is that solar saves money. The savings can be immense, especially over time. Yes, installing them is an initial investment, but solar panels are what a call a money-saving investment.

Solar Is Affordable

Before I go into how much money installing solar panels saves, let’s talk about the initial investment. I want to debunk the myth that solar is too expensive. In fact, solar panels are very affordable. We shopped around for the cheapest option and chose a solar panel company, Sunlux, who installed our panels for less than $20k. $20k is AFFORDABLE. $20k is less than a brand new car. Heck, it’s less than many used cars, too.

If you don’t have $20K to pay off the solar upfront, you can finance it. A 10-year loan with Sunlux runs about $115 per month. That payment is covered by the savings from not paying the electric company! Below, I share with you our electricity bills after solar was installed mid-March. You can see that our savings run anywhere from $94-$150!

Related Posts:

Federal Tax Rebate Reimburses 30% of Total Cost of Solar

We were ecstatic to learn that they extended the federal tax rebate in 2023. This reimburses 30% of the total cost of solar panel installation. Since our solar cost $20k to install, we would get $6k back on our return next year. This makes the true cost of installing the solar panel $14k.

Solar Can Reduce Taxes on Your Real Estate’s Capital Gains

When you sell a property, you are taxed on long-term capital gains. However, you can subtract improvements you made to the home while living there. Solar panels count! Subtracting $20k from a properties capital gains saves someone $4k in taxes assuming they are in the 20% tax bracket!

It Takes 7.2 Years of Solar To Come Out Ahead

So assuming you save $6 k from the tax rebate and $4 K from the capital gains tax, the solar really only costs $10K. Financed at $115 / month (which is what you would pay anyway to the electric company if you didn’t have solar), you come out even at 7.2 years. However, the solar you just installed should continue to give returns after 7.2 years. This means every year after that, you are saving $115 / month. Meanwhile, the electric companies likely hiked the price of electricity due to rising demand coming from an increase in popularity of electric vehicles, electric stoves, and electric dryers. Factor in inflation, and you can quickly see why solar panels are a money-saving investment!

In conclusion, installing solar isn’t any different from paying the electric company when financed. Your monthly bills isn’t going to change much. For many, it would save you money actually. In the end, it would lead to savings in the future! Install it today, and your future self will thank you.

*If you are local to Orange County and wish to use Sunlux, would you do me a favor and mention my name as Sunlux offers a referral reward for previous clients. Thank you!

Photo by Vivint Solar on Unsplash

How I Saved Enough to Pay Off $575k of Student Debt in Under 7 Years

Finally! It has been a little over six years and we now have enough money to pay off my $575,000 in student debt! Although we haven’t paid it off because of the student aid deferment since the pandemic, it feels like a weight has been lifted from my shoulders. I don’t know how it happened, or when really. Which goes to show that little wins add up to big gains. It’s the everyday decisions you make that, in the end, pay out. Success isn’t so much the achievement. The achievement is the public recognition of that success. But success is made long before that achievement is earned. Every time you choose to take a step towards your vision, that is success right there. The crazy part is, we are considering not paying it off! But before I get into why, let’s look at the how.

How We Earned Enough $ to Pay Off $575,000 in Student Debt in Under 7 Years

I will start off by saying, I have never worked full-time in any one job. EVER. And when the pandemic hit, I actually quit my job with the thought of taking a break from dentistry. Alas, I soon found myself back in the office covering for a colleague 2-3 days a week. After her return, I ended up staying on part-time and have been part-time since.

All of this to say, we did not have to bend over backwards slaving away in the work force in order to earn this. Paying off debt doesn’t require deprivation. I didn’t accept a corporate job that might have given me benefits but would have wrecked my soul. I didn’t work over-time sacrificing family time. I lived my life exactly how I wanted to, worked the hours that felt comfortable to me, and prioritized my passions and personal life.

So how did I earn enough?

First, I made my vision and I always kept it in the forefront of everything I did. Second, we lived within our means. We were frugal, but not in the depriving sense of the word. We made good decisions, spending our hard-earned dollars on only the things that brought us joy. Third, we were valuists. We bought things based off of value, not price. I turned passions that I valued into money-making side-hustles. And fourth, we were true to ourselves. We did not compete with the Joneses, but rather, competed with ourselves. We spent energy trying to become better versions of us, rather than trying to one-up our neighbors and friends.

The main point is this: We created a plan to hit our goal and we stuck to it. It’s as simple as that. At the beginning of the pandemic, I had paid down my student debt to $425k. Today, it is at $400k and we have the money to pay it all off!

Where Did We Hold Our Assets?

Our assets are diversified and in multiple accounts. I never planned for it to be this way. When the pandemic hit, we didn’t really know what to do with left-over dollars that we saved. We wanted to be conservative, so we held most of it in cash in a High Yield Savings Account with Marcus. Currently, it is earning 4.65% in return. If you sign up with my referral link, your savings could earn up to 5.15% APY, which is 1% higher than the current Marcus rate. Over the past few years, we have saved $260k in a HYSA. By keeping our dollars in a HYSA, we are earning over $1,000 in free money every month!

We also have equity in our home. We started out by buying the best house we could find in the worst neighborhood in 2018. We had a roommate. Our down-payment was $25k. We sold that home and rolled the equity into buying a more expensive property in 2021. Currently, we have $150k in equity. Real estate has done well the last three years, and continues to do well. We listed our home on the market last Friday, on my 34th birthday.

Adding those two assets together, we are already at $400k! In addition to that, however, we have about $30k in cryptocurrency and $30k in stocks. We actually lost money by investing in stocks and crypto, but as long as we hold and don’t sell, we won’t realize those losses just yet. On top of this, we have $6k in an HSA account and $250k combined in our retirement accounts.

Therefore, if we rent a place to live or if we sold our investments, we would be free of student debt. So why are we not doing that just yet?

Why Have We Not Paid off the Debt Yet?

The politics around student debt have been shaky these past few years. Talk of student loan forgiveness during this prolonged deferment has kept everybody at the edge of their seats. Continued extensions of the 0% interest rate had us rolling our eyes. I thought it would be silly to pay the debt off while we were being charged 0% interest anyway. It was better to invest that money and realize the growth potential of those dollars. We benefited greatly from not refinancing out of the student loan repayment program that we are in (REPAYE). And now that student loan repayments are set to resume in September (????), I am not sure we will pay off the debt right away. Why??

As you may know, our first born son, Casey, was born in April. We decided to stray a bit from our frugal lifestyle in order to give him the best life possible. We want to roll the equity we’ve gained thus far to provide him a big home – one wherein he could have his own room. Our tiny home won’t allow for that. At the same time, real estate has been good to us. My husband, especially, likes being invested in it. And selling our current home in order to pay off debt without a foot in the real-estate game isn’t an idea we like.

What the deferment has taught me these past three years is that staying enrolled in the government’s loan repayment program afforded us more freedom than paying off the debt would have. Call it luck or chance, but I enjoyed that freedom and I think we could benefit from that one last time before the student debt repayment resumes. Which is why we are in the process of buying a $1M+ dream home in our beloved community before the first payment is due in October.

I Changed My Mind.

I changed my mind about what I thought it meant to give the world to Casey. I originally thought it meant choosing a smaller house in order to work less, so that I can be around him more. I originally planned to work 2-3 days total. During my maternity leave, while we were home every day, I realized that we had a lot of family members who could love and care for him as well as we can. In some ways, they can do it even better.

Meanwhile, we struggled to maneuver our tiny space. We were drowning in stuff he needed. We limited the toys that could help him thrive. It also became clear that our small space couldn’t house the people who came over because they wanted to love him and care for him. So I changed my mind.

I’m going to work four days a week in order to provide him and our extended family a bigger space. A place wherein we can all grow, thrive, and share memories in comfort. This provides opportunity for Mike and I to grow our careers, for me to regain a bit of my previous self, and for our family to spend quality time taking care of our son. I am trading my timeline of paying off student debt in under 7 years for something that I prioritize more: family.

For a moment, I considered the alternative. I quickly realized that if I chose to pay off the debt, it would be for self-fulfilling and vain reasons. Mainly, to show the world that I could. But in reality, I’ve proven it to myself, and that’s all that mattered. It will be repaid eventually, but not at the cost of what this journey was all about – to live the life we dream of without money dictating how we live it.

The New Plan

Roll $150k from equity plus $75k from HYSA to cover our 20% down payment and closing costs.
Keep the remaining $175k in HYSA for my student loans.
Leave crypto and stocks where they are so as not to realize losses.
Continue contributing to 401k and retirement accounts.
When loans resume, start over and aggressively pay off debt.