Freedom: Be A Baker, If Your Heart Tells You

It’s been a while since I’ve talked about freedom, but in essence, this is really what this blog comes back to. Freedom from clutter, freedom from societal norms and expectations, freedom from social obligations, freedom from the monkey mind, freedom from debt, and freedom from financial chains all-together. Even though I talk largely about finance, as my site moniker implies, the wealth will never amount to anything without the freedom. I’ve seen time and again people hung up in the numbers game, that they miss out on the life. They become money making machines (and great ones, too) but at the expense of the things that make one most free. My advice? Sure, you can play the numbers game. Use your knowledge about finances to free you more. But the end goal isn’t to become a millionaire. At least for me, it’s not. It’s to become a baker, if my heart tells me to.

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By now, you all know about my staggering debt, which I took out to pursue a profession that I have wanted since I was 8 years old. You also likely know about my resolve to get rid of the debt. I mean, even Travis Hornsby of Student Loan Planner couldn’t convince me to get off this crazy, wild train of paying down debt aggressively! And surely, if I was concerned solely about the numbers, I could accelerate this repayment by working as a dentist as many days as I can. Or even more so, by buying a practice and putting in some serious hustle, dedicating most ALL of my days to building a business that would yield a large enough profit to accelerate my timeline even more. Yet, I chose to stay part-time.

Am I a crazy nutcase? A dummy who doesn’t realize how much more efficient I can be?

Choosing to stay part-time gave me the space to be able to fill my time on this Earth with other things that bring meaning into my life. Choosing to tackle my debt aggressively relieves some of the dependency I have on my job. Little by little, both options have led me down a path to pursue things such as writing on this blog, dog sitting on Rover, and now, baking bread in earnest.

It is with great pride and an overwhelmingly amount of joy and excitement that I would like to share a recently accepted position as a baker for the company Rye Goods, one that pays little in green paper stacks compared to dentistry, but pays enormously in terms of joy. And while people would gawk at my audacity to add three midnight shifts to my four dentistry days while trying to juggle this blog, I cannot explain to you how much energy all of this brings me. And wasn’t this the whole point?!

All the hours I spent de-cluttering, all the heartaches I delivered de-friending, all the sleepless nights filled with budget cutting, all the effort spent trying to erase the mental clutter and slow the heartbeat’s pace … It wasn’t to live with all that empty space. It wasn’t to deprive. It was to be free. All of this, to allow me to be a baker, if my heart tells me to.

And if you want to follow this crazy train, you are more than welcome.
First stop: financial independence. Then onwards, to the rest of your life.
May I suggest starting here.

Frugality: Avoid the Yoga Membership, Still.

Have you ever noticed that advertising companies never actually sell the product? That’s what makes them so great at what they do. Instead, they sell you a feeling, whether that’s ease, comfort, convenience, or momentary happiness. They hit you where you’re softest, and dig their claws right in. And no matter how brave, strong, or knowledgable you are, you may still fall culprit. I know I have. But I need to remind you when you hear them whisper sweet promises, dripping with sugar and floating like cotton candy clouds, that they have their agenda too.

Here’s a recent story.

For the last month of 2018, I had been mulling over signing up (again) for a yoga membership. I have already written about the frugal challenge of getting rid of all subscriptions, and have listed gym and yoga memberships as one of the things I’ve given up in the name of frugality. I gave up yoga class in January of 2018 when I embarked on my journey of repaying over $550,000 of student debt, and started identifying myself as the Debtist. It has been over one year since I had attended a yoga class, although I practiced in daily yoga in the comforts of my own home (and PJs). Prior to abandoning yoga entirely, I have been practicing yoga in studios for three years. Not for three years continuously, but when I have a monthly unlimited membership, I try to go every day. My frugal instincts, every fiber of them, fight to pay the cheapest amount per class attended.

So after a year of hiatus, one of which I am extremely proud of, I started getting it into my head that I deserved to start yoga class again. UH-OH. Deserved – the most entitled word in every heavy spender’s vocabulary. It started off with random clips of conversations with the bro, who speaks highly of gym memberships as investments for one’s health. And doesn’t health matter above all else? Investments as in, what we put in now will reward us as we age, avoiding costly medical bills caused by a sedentary lifestyle. And this isn’t to put the blame on the bro, for the failure is all mine. But my head started to speak in snake-like tongues, and hiss at my “lack of consideration” for my health. The frugalist writhes, trying to twist itself out of the suffocating onslaught of convincing arguments for why I should be “paying myself first”. Doubt starts to creep its long shadowy hands into my brain, muddling thought processes. How could I have neglected my body for so long. I definitely deserved a yoga membership. After wrangling finances and achieving so many wins, surely I am now at a position to pay for this one thing? A membership will be more beneficial than my meager daily, at-home practice, where I show myself a little too much self-care. Granted, there are moments where it’s easy to move back into child’s pose, as the well-intentioned YouTuber drones on about a more difficult contortion. How could I cut myself so much slack?! Where is my motivation? I’m not doing myself any favors.

And eventually, the frugalist twitches its last struggle, and gives in.

A strong indication towards the mistake I was about to make should have been my reservations on purchasing the membership. My poor frugalist fought the battle for more than a month. But eventually, he lost, and I reasoned with myself that I needed to start investing in my health. I went so far as to justify it as investing in my profession, since dentistry can be so taxing on the body. If I want to pursue dentistry for a long time, surely I need to balance my static huddled postures over patient heads with a number of back bends and bridge poses, am I right? Surely, I need someone walking around the room making sure that I was going to be doing that instead of lying on my back. And I am frugal after all, so if I purchase this, I know that I will revert back to my good habit of going to yoga every day.

When we got back from our trip to New Zealand, emotions running high from the freedom of responsibility and from chasing future dreams brought on by the New Year, I signed up for an unlimited monthly membership.

I attended a wonderful C-2 class.
Oh how I missed the heat of the yoga studio, a wonderful balmy 90-something degrees.
How I missed the sound of sweat, slowly dripping from my forehead to the yoga mat, mimicking the sound of applause from a cheering spectator crowd.
How I missed getting guidance from yoga instructors, pushing always to improve the posture.
How I missed the words spoken, uplifting yogis out of their daily troubles to a more serene place, activated by the internal rhythmic breath.
I came out of the class having likely sweated away all fog and cleared my mind of unnecessary clutter.

I went home, took a shower, and lied in bed. Then I started to cry.

It wasn’t that I didn’t have the $159 fee. Nor was it that I needed it for something else. At first, I couldn’t pinpoint what I was so upset about. Was it depression from having finished our vacay, finally settling in?! NO!

It was because, deep down, the frugalist still breathes, still fighting, still living. It’s because the person inside me knows that I do the same yoga moves at home, minus the heat, and even without the yoga, still benefit from a non-sedentary lifestyle of always being on the move. It was because I could do the same darn down dog without spending money on gas, spending my time commuting, and spending my car’s fumes at the expense of mother nature. It’s because I had designed a life where I don’t need to exercise according to someone else’s schedule. Wherein I have purposefully made my life so as to never need an alarm clock, and yet here I am with a 5:30am wake-up call blaring, so that I could fit someone else’s yoga schedule into my busy day.

It was because I knew that I was fooled into thinking that motivation lies in accountability confirmed by an instructor and yogi mates.

I was reminded of the ways in which we explain to ourselves why we need to purchase services and things.

I remembered who I was and what I stood for.

Talk about a rude awakening to 2019. I come back from vacay and have completely forgotten myself. Mr. Debtist, being the voice of reason, was there to remind me to just move forward. Make the best of the subscription. So I managed six days in a row, until I fell ill with the flu. And that’s when I knew that I messed up. The signs were all there. That’s when I knew the advertisement agencies won. That’s when I found who I was again, and decided I had to share with you.

It wasn’t worth it, it isn’t still.
It isn’t true that you need to pay for good health.
Self-care is not a bad thing.
Accountability only matters when you care what other people think.
And lastly, you will always know the truth.

Why You Need A Budget

I always tell people how having a budget helped turn our life around. For some people, just the mention of the “B” word makes them cringe. There are many negative implications attached to budgeting, but I am here to tell you that they are not true. Many people believe having a budget is limiting, as if it will tell you what you can and can’t do. I completely disagree. I think having a budget is freeing, because it allows you to finally tell your money where to go. When you have a budget that works, you will have your money working for you, instead of the other way around.

You will never know how you are doing financially without measuring it in a factual manner. Likewise, you cannot improve if you don’t know what you need to improve upon. Numbers don’t lie, and your budget will be the best reflection of how well you do with controlling your spending. The first question I ask people who tell me they have difficulty saving money is, “how much are you spending each month on _____?” If they can’t give me a definitive number, then therein lies their problem. I liken it to people who say they can’t lose weight. If they don’t know how many calories their taking in and how many calories they’re burning per day, then how do they expect to have any grasp on the things they can improve on in order to see results. A budget is necessary in order to track progress. People will usually try to ball park their spending, but it never works. Why? Because we always underestimate how much we spend. It’s human nature. It’s difficult to understand what’s keeping us from financial freedom if we do not know what we are doing with our money.

Budgeting will teach you more about yourself, what you value, and what you want in your life.

There are many reasons why you may want to master your budget. Here are some ideas.

  • To free up your time. You may feel as if work is taking up all of your time. You may want to cut down on work or change jobs completely but you can’t do so because there are bills that need to be paid. A lifestyle needs to be supported. Getting your budget in order may be just want you need to decrease your spending, thus allowing you to take that part-time job or cutting down on your work hours. Some people even want to become so financially savvy that they can pursue complete financial independence and retire early!
  • To relieve stress. Having a shortage of money can be very stressful. However, if you budget correctly, you should never run into that situation. Mastering your budget gives you more flexibility and allows you to be better positioned to deal with unexpected expenses.
  • To have more freedom. The more financially secure you feel, the more freedom you will have when making life decisions such as changing jobs, quitting work, traveling the world, starting a business, starting a family, and more. When money is tight, these things may seem very risky. But when you have a grasp on your budget, you can predict how much freedom you have in pursuing your passions. For example, if your dream is to time off and travel the world in 2020, you can definitely make that dream happen but planning ahead and using your budgeting skills to prepare yourself for that.
  • To support yourself and your loved ones better. For me, this was MY “why”. I was graduating from dental school with over half a million dollars in student debt, and was also about to get married. I knew what a burden I was choosing to bring into our marriage. He didn’t mind it, but I did. I was propelled forward with this drive to release us from this student debt, so that we can be free to pursue the lives we want to lead without being tied to working in certain fields to support large loan payments. It isn’t fair that the person I most love would be affected by debt because of the career I chose to pursue. So I embarked on a journey to get our finances in tip top shape, and we have mastered our budget so well that what people once told us would be impossible to do is being done! They said we wouldn’t be able to pay off our debt in under ten years considering the salary we would be making. Well, we are on track for eight years, and it all started with mastering our budget!

So, do you have a budget? What’s stopping you? If you want to kickstart your budget and start telling your money where to go, check out my FREE course, How to Create A Budgeting Tool That Works, and start achieving your life goals sooner. I hope it helps you with your financial journey as much as it’s helped us.

Feature: Student Loan Repayment with Student Loan Planner

This post may contain affiliate links. Please see my disclosure to learn more.

Today, my Itunes interview with Travis Hornsby was released, and it will leave you with much to mull over. Travis Hornsby is the founder of Student Loan Planner, whose goal is to help guide recent grads down the correct repayment path for their lifestyle . In this episode, he dissects my current student loan repayment plan. We discuss optimized strategies, loopholes in the system, as well as pros and cons with paying down debt aggressively or passively. I learned something new during my conversation with Travis which led me to switch my repayment plan in order to save thousands of dollars! Throughout this journey, I have found that it’s amazing that we don’t know what we don’t know. Without conversations such as these, we will never really be making the best choice available. Additionally, it secures my faith in our ability to pursue our path and reinforces the contentment that I have with our decision.

There are a few things that we touched on in the podcast that I wanted to clarify.

  • Mr. Debtist and I both have 401ks. We are not paying down the debt and ignoring retirement all together. We contribute to our 401ks every month and currently have more than $100k tucked away.
  • We bought our property but not just as a place to live. We knew before we purchased that property ownership is FOR US. Our property is very unique. It is a live work loft that has a commercially zoned business space on the first floor, and the living space on the second floor. We bought it as a means to increase our income. Even though Travis is wary of people buying at more than the 1% rule, especially in California, the conversation we had talks specifically about homes to live in. It does not take into account the money the house brings in on top of its worth. We currently make passive income off of the business space by renting out the room. If ever our roommate leaves, we have a few ideas on what to do with the space. Our hope is to eventually create a business of our own on the lower floor, thus adding to the ways in which the house makes us money.
  • As much as I would love to work pro bono in another country, I want to be rid of the loans more. I know that it seems crazy to forever pay $6,500 towards student loans every month for 8 years, but I trust that it will not be equivalent to what we are paying now forever. I believe in the snowball effect. As we alluded to in the podcast, once the loans are at a certain threshhold (less than $400k) there is the possibility of refinancing at 5.5%. Once it’s below $300k, there’s the possibility of refinancing at an even lower rate. Additionally, we hope to increase our income over time, as we are doing a number of side hustles. Lastly, as Travis tried to convince me to get on the forgiveness path, you can see that he did so to no avail. I am certain we are on the correct path for us. Once we are free of debt, we would have already been contributing to both 401ks for 8 years, paid as many years to a mortgage, established at least one consistent stream of passive income in the form of a side gig or business, and most importantly, we would know how to live off of very little. We know how to find happiness in the simple things. We would have created a life of intention. And that is worth more than anything a loan forgiveness program could give me.

This is definitely a podcast to listen to if you graduated with a large student debt. You will likely find some golden nuggets in our conversation, and if you like what you hear, then maybe scheduling a call with Travis would be the next step for you. If you have a smaller student loan amount, maybe getting rid of your debt is closer to your reach than you think. In case you were considering refinancing, below are a few refinance links, to help you get a better rate on your refinance.

Using the links above will reward you with a sign up bonus for choosing to re-finance. But before you do, please think thoroughly about whether or not you can sustain the new rates, because once you refinance, there is no going back to student repayment. Also, don’t forget to shop around and find the lender that will give you the best deal out there!

And in case you missed it, my previous podcast interview on Itunes with ChooseFI can be found here.

One Income Stream is Risky Business

There’s a recent happening at the Debtists’ residence that we have not yet spoken of. It’s one that I hope you consider heavily, and it emphasizes the risky business of relying on a single income stream. After revealing the going-on’s at our home, I sure hope it convinces you to re-think the way you look at yourself and your job, and to possibly start on this path towards adding side hustles to your resume in 2019. 


Real talk: A year and a half ago, Mr. Debtist pursued his dream job at a start up company working on electric vehicles. As with any start-up, there is risk involved, and one never quite knows if anything will come of it. Last year, we went through some difficult times with the company, and for a month or so, we didn’t know if there was any more growing left to be done. Luckily, they pulled through and at the beginning of this year, there was hope of moving forward.

Unfortunately, mid-October, we (and the rest of Mr. Debtist’s company) were blind-sighted by a turn of events that resulted in a laying off of 20% of the company, followed by a mandatory furloughing until further notice of anyone who joined in the last six months. A 50% cut on everyone’s salary was implemented, which is hardly the worst part. Last week, another wave of mandatory furloughs was issued, getting rid of all of Mr. Debtist’s friends at work, but one. All that’s left of Mr. Debtist’s team is him and two other mates. Now I am not ungrateful for the fact that he was kept on and still has a job, despite the 50% cut that he’s been working under the past two months. But it is a depressing thing, to see your company degrade, your co-workers leave, and your paycheck smaller than when you first graduated from college 8 years ago. I share this with you all to prove one thing: Having one income stream is risky business.


Sometimes, “what you do in your 9-5 is not as important as what you do in your 5-9”, my favorite quote from Side Hustle Nation’s Nick Loper. We need to stop thinking of ourselves as someone employed by a company who works in the 9-5. Rather, we need to start thinking of ourselves as entrepreneurs, who may be doing particular work from 9-5, but who are our own employers from the 5-9. Because we are our own employers, we are responsible for creating other income streams for ourselves outside of our 9-5. By doing so, we no longer remain dependent on a single job, or on an employer for that matter. Even if you own your own company and you work for yourself, you cannot assume that your single source of income will be there a year from now. You cannot assume that you’ll still be satisfied with the same work after a year. And who likes sticking to a job that they hate? We only have a limited number of days, and our lives have to reflect that. With other sources of income comes more freedom from any potentially unfavorable turn of events, and more power to call the shots as to what takes up your precious time. The minute you become an entrepreneur, you become your own person.

Even as a child, I knew deep down that I did not want to depend on anyone. In fact, I hated it when people told me what I could and couldn’t do. That’s just who I was. No one else but me gets to say how my life is going to be. I mean, should anyone else be given that right?! Here in this space, I write about ways in which we can live intentionally. Part of that requires ensuring that we are living for us. That our actions are shaped by neither our histories, nor our relationships. That we leave our own legacy behind, and not an empty shell of a life made busy with what other people thought defined our success, or worse, defined us.


For Mr. Debtist and I, we are absolutely lucky in the fact that we do not rely on one income stream. And I am not referring to the fact that we are a dual-income household. I would say that we are a hexi-income household, because we employ a number of different side-hustles to increase our income. And while we cannot necessarily replace our 9-5 jobs with the other income streams, we can stay afloat. We prove to ourselves that we can come up with something to replace it. We (hope to) inspire others to have the courage to make it work. If all of this jives with you, here are five income streams for myself that have helped offset the dramatic pay-cut. 

  • Work for 2 dental offices (and stay open-minded to help out fellow dentists in need at their offices). I work for two different dental offices in two cities about twenty five miles apart. One is three blocks from my home, the other is a five minute drive from my parents. Working for two offices gives me flexibility, but also, safety. Imagine one city suffering from a fire, or an office suffering from a sudden loss of staff. Dispersing my dependency between two offices that serves two different communities gives me a stronger sense of stability. Additionally, I have colleague dentists who occasionally message me and ask me to help out with their own private offices once in a while. If I have a day off, I am more than happy to work for them for that day, to help alleviate the work load or to give them time to take a vacation.
  • Act as landlord and rent out a room. We started this idea of co-housing in January of 2018. After having an emotional break-down over the stagnancy of our finances given the large student debt that we had to overcome (referring to myself, not the Mr. Debtist, regarding the debt AND the breakdown), we decided to co-house to alleviate some of the financial load, and more importantly, allllll of the stress. Another way of thinking of co-housing is as an additional income stream. Renting out a room in our home gives us an additional $700 a month! It’s actually the biggest thing that got us out of our stagnant stages (along with YNAB which helped us get our budget in order), and it was the best decision we ever made!  
  • Dog sit via Rover: This is a recent side hustle that I started to do and I think it has great potential. We do not have kids of our own, and while we love our toothless cat, we also enjoy the additional company of other pets, too (even though Theo may not). Dog sitting is a great side hustle because it does not add much to your plate. It is flexible in that you can create the timeline that works for your already existing schedule to feed and walk the dogs. For us, it is a great opportunity to play and love dogs who would otherwise be sitting in a kennel overnight. The dogs are welcome to sidle up by us on the couch during the day or on the bed at night. It gets us to go out on a walk three times a day, forcing us to exercise, but also giving us the opportunity to connect. With this side-hustle, I charge $30/night to dog sit, giving us the earning potential of an additional $900 per month. Via Rover, you can also choose to day sit, take dogs on a walk, check-in on someone’s pet, and more! You control your own calendar, making it easy to do without sacrificing your current obligations. For example, if you have a vacation planned, then you may block that day off from your availability. If you love pets as much as I do, then this is a great hustle to look into.
  • Use affiliate linking to generate income from the blog. This is fairly easy to do when you have an existing blog or social media platform. You can become an affiliate for a number of companies and help others by linking them to that company’s programs or services. Off course, I do not link to every company out there willy-nilly. I only choose companies that are in line with my lifestyle and my values. Most of the time, I have tried the product myself to verify that they make a good fit. For example, in an effort to help others who are attempting to wrangle their student debt, I have partnered with the following refinance companies (Laurel RoadELFICommon BondSofiSplash FinancialEarnestLendkey) to help people get lower interest rates on their loans. It’s a win-win situation, because I make financial independence, zero waste-living, and sustainable products easily accessible to my followers, and at the same time, I receive a small percentage commission from the companies I work with.
  • Take bread orders and sell bread loaves and croissants. Baking bread is like a science. If I am being honest, it took me quite a few experimental bakes before I even got to what I would consider edible bread. Eventually, I got to bread that was soft enough to digest, let alone bite into, but I still wasn’t satisfied. When I got into a bread baking habit, I wanted to improve my skills without wasting so much bread. A gal can only eat so many loaves in one sitting! So what I started to do was sell my bread to friends, family, and co-workers, which gave me the ability to practice honing in my skills without wasting resources. In return, they received fresh loaves of organic bread, without any preservatives of any kind, at a hugely discounted price. Even though I have stopped baking bread loaves every week once I developed a recipe that I was happy with, I occasionally still do get orders and requests. This isn’t to say that bread baking will replace our real 9-5 income. Rather, it’s to show you that you have hobbies and talents that people are willing to pay for. At absolutely no expense to you. Let’s say you love to read. Offer your services as an editor. Let’s say you like to cook. Sell your most popular meals to friends and family. Or better yet, start a blog and share your recipes with the world. If you like calligraphy, use the holidays or weddings as opportunities to make some income. If you own a camera, become a free-lance photographer on the side, starting with close friends and families to build a portfolio. Trust that you hold value , and share your interests and skills with others in a way only you know how.

We took over a $55,000 pay cut two months ago. But we aren’t going to quit. We will keep up the student loan payments and dig our way out of hyperdebt. We will flex those frugal muscles (a year of working out those frugal muscles has prepped us for this!). And we will not jump desperately to the next corporate job offer. We will stay afloat this crazy ocean ride. Why?? Because it is important (to us) to build a lifestyle by design. Part of that means that it is important to do meaningful work, however that’s defined by you. We knew the risk of a start-up company, but electric vehicles is what he wanted to do. He loves cars, and he believes strongly in a future of autonomous driving. Despite the unexpected turn of events, you don’t ever regret a decision like that. If you find yourself in a similar situation, I implore you to seriously think before you jump into the next job life throws your way. If it doesn’t align with your lifestyle or your values, why chain yourself up? 


We only have a limited number of days, and our lives have to reflect that (see paragraph 4).

How Switching Your Student Loan Forgiveness Plan Can Save You Thousands of Dollars!

This post may contain affiliate links. Please see my disclosure to learn more.

How would you like to save thousands of dollars a year, simply by switching the loan forgiveness program you are on? We know we did! A recent conversation with Travis Hornsby of Student Loan Planner informed us that we could speed up our loan repayment simply by switching from IBR to REPAYE! The information that Travis shared with us was so valuable, because it could in fact save us thousands of dollars on our student loans! That’s equivalent to refinancing to a lower rate, thus cutting down our repayment timeline, while still allowing us the safety net of being in a loan forgiveness program. After conversing with Travis for an hour, I would highly recommend Student Loan Planner as the starting point for any student or new grad looking for student debt advice.

So how do we save $$$ this year? It’s simple. All we need to do is to switch from IBR to REPAYE. Today, I will outline why.

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A Case Study: IBR VS REPAYE

We were under the IBR program since we embarked on this journey to repay our student debt of $574,000. Before you consider which loan forgiveness program you want to choose, you should probably read Finance: Student Loan Forgiveness Options: IBR VS PAYE VS REPAYE. We had initially chosen IBR despite the fact that the monthly payments would be 15% of discretionary income vs REPAYE’s 10% of discretionary income because of this one factor: IBR allows you to file taxes separately as a married couple and it will only consider the loan holder’s income, versus REPAYE which will consider the income of your spouse as well. Since Mr. Debtist also makes a six figure number, we figure that we would have the better deal using solely my income.

Here is an example of how to calculate that:

Let’s use estimates from our personal story to calculate the difference.

Assume that our loan is an even $550,000, my income (the debt holder) is $125,000 and Mr. Debtist’s income is $120,000.

Under IBR, they would calculate our yearly loan payment by multiplying my income by 15%.

125,000 * 0.15 = 18,750

Now we divide that by 12 months to find the monthly payment.

18,750 / 12 = 1,562.50

Therefore our monthly payment would be $1,562.50 under IBR.

Under REPAYE, we need to use the total household income of $245,000 to calculate the yearly payment, however we will only be paying 10% of our household income.

(245,000 – 1.5 * 16,460) * 0.10 = 22,030.85

To find the monthly payment, divide by 12 months.

22,030.85 / 12 = 1,835.90

Therefore our monthly payment would be $1,835 under REPAYE.

As you can see from this example, IBR would be the better payment plan because you would be paying the cheapest amount per month and allowing the program to forgive as much as possible.

HOWEVER, there is a rule with REPAYE that IBR does not have. REPAYE will subsidize 100% of the interest accrued for the first three years for subsidized loans, and 50% of the interest accrued after the first three years, which changes the game. Note, if you have unsubsidized loans or GRAD PLUS loans, they will only pay 50% of the interest accrued, period. Let’s see how.

Under REPAYE, the government will subsidize the interest that does not get covered by your minimum payment. In my case, I took out GRAD PLUS loans, so that would be 50% of the interest that accrues. We have already calculated the monthly payment to be $1,835.90. Let’s convert that to yearly payments.

$1,835.90 * 12 months =  $22,030.85 owed this year under REPAYE

This year, based on last year’s income, we owe $22,030.85 in total payments under REPAYE. We also know that interest on $550,000 at 7% is $38,500. Therefore, our payments under REPAYE are not even enough to cover interest, as is usually the case with a loan this large.

So the difference is calculated as follows:

$38,500 – $22,030.85= $16,469.15 * 0.5 = $8,234.58

Which means that for our case, the government will subsidize over $8k per year! You would be missing out on thousands of dollars just by being on the wrong program! We certainly did.

Why We Stuck with IBR in the past

We decided to be under IBR right when I got out of dental school, BEFORE we decided to pay back our loans aggressively. The reason being in my first year, I only worked for the last three months of the year, having waited for my license to be approved after graduating in June. In my first year’s taxes, I made $25,000. So taking 15% of $25,000 would be cheaper than 10% of $145,000. Now in the second year, the numbers completely changed since I started working full time for the entire twelve months. My salary jumped from $25,000 to $125,000. The ultimate question: Why didn’t we make the switch?

In April of my first full year of work, we had decided to pay back the loans aggressively. Meaning, our monthly payments were MORE THAN the minimum amount required. In order for there to be excess interest accrued on the loan, our monthly payments should not exceed the interest gained, which was about $3,000. But since we were paying our debt like CRAZY, we were actually paying $6,500 towards the loans, so no interest was accruing and it did not matter if we stayed in IBR or went to REPAYE.

Or so we thought…

We were VERY wrong!

A Common Misconception

According to Travis Hornsby of Student Loan Planner, REPAYE calculates the difference between the interest accrued and the amount paid back on the loan at the beginning of the year. REPAYE assumes that you will only make your minimal payment each month, which means that they lock in the assumption that $11,500 would be accruing in interest (for our particular example). Every month, they will subsidize a portion of your loan to make up for the interest that will supposedly accrue, REGARDLESS OF THE MONTHLY PAYMENT YOU ACTUALLY PAY. It doesn’t matter if we pay $6,500 towards the loans or if we pay the minimum amount. Either way, REPAYE will subsidize the difference between the minimum payment and the interest that’s being charged. So we have actually missed out on an opportunity here! What’s passed is past, but we are definitely jumping from IBR to REPAYE ASAP!

What Switching from IBR to REPAYE will save us.

We need to make this jump because of the following:

  • It will save us tens of thousands of dollars in the long run.
  • Making the change will be the equivalent of refinancing to a lower rate without actually having to refinance! Which then gives us the safety net of staying in a loan forgiveness program. If ever life throws us a curveball (such as an accident, layoff, disability, sickness, or our worlds fall into chaos and we cannot work), then the loan forgiveness program will give us the flexibility to not HAVE to pay $6,500 per month.
  • After all the money we save, we can cut our repayment timeline down to 7.5 years!

Off course, not everyone under IBR should automatically jump to REPAYE! You have to pick the financial path that is right for you, considering your personality, your goals, your lifestyle, and more. If you are looking for sound advice on how to create a student loan repayment plan customized for your situation, don’t hesitate to contact Travis Hornsby, founder of Student Loan Planner, using my affiliate link. It will be a very rewarding hour! And check out my second podcast episode with Travis, to be released in 2019! Stay tuned.

Frugal Challenge: No-Dining-Out November

We started our journey to getting our finances in order by reeling in on the spending. There was no other way we would have paid $84,000 in our first year without YNAB! To this day, budgeting continues to be a top priority and really keeps our finances in check. To help with that, we have made being frugal a bit more fun, by creating challenges for ourselves once in a while. In this way, we’ve made saving money into a bit of a game. I am excited to announce this month’s frugal challenge: No-Dining-Out November.

Related Posts:

If you are already on an extreme path to FI, you may already be doing this. Unfortunately, we aren’t as strict about the dining out thing as some. Reason being, we still want to enjoy our younger years, and not sacrifice our freedom now for freedom later. But this month, we will save a couple extra dollars by trying our best not to go out for food.

Typically, we cook about 90% of our meals for the week at home. We will go out about once a week, and most times, it is in celebration of someone’s birthday, or to meet up with families or friends to reconnect over a meal. Before you go running for the hills after my suggestion of giving up dining out completely, let me explain why November is the perfect month to do so.

The explanation goes as follows: Thanksgiving occurs in November. That’s it. Our one saving grace. If you’re like us, this time of year involves gatherings with friends and family aplenty. For example, we have a Friendsgiving event with our closest friends every year hosted at our house. I typically cook and serve a home-made 5 course meal (stay-tuned for what we’ve got up our sleeves this year), and everyone chips in monetarily by paying a small fee ($10-15 per person). On top of that, we have separate Thanksgiving celebrations with my parents, Mr. Debtist’s dad’s side, and Mr. Debtist’s mom’s side. Additionally, I have a Thanksgiving potluck at work. As you can see, November is the perfect opportunity for us to skip on the dining-out while still feasting on amazing food! It gives us opportunities to still meet up with family and friends, and it also has opportunities where we can eat without having to cook the meal ourselves. Plus, Thanksgiving isn’t as hectic as the Christmas season, so with enough planning, it is completely doable to balance work, life, and food.

Helpful Tips:

In moments of true weakness, here are some tips on how to go completely without dining out for a month.

  • First off, decide what constitutes as eating out. For us, even getting coffee or ice cream counts!
  • Get a really devoted, reliable friend to join you on this venture. If you ever feel like dining out, let them know so that they can keep you in line. Maybe take turns cooking for each other. I thankfully have Mr. Debtist for that.
  • Pre-cook some meals and freeze them early on in the month, while your motivations still run high.
  • Every time you feel like dining out and resist, write down the amount of money you saved. When you need a little inspiration, take a look at that piece of paper and count your savings!
  • Avoid the social pressures of dining out. Maybe avoid scrolling through Instagram or swiping through Instastories, to prevent yourself from being tempted by photos that your friends post. It may be that your super expensive dining out habit has more social motives rather than gastronomical.
  • Pack your lunch, but still “go out” with friends. Mr Debtist always packs lunch for work. But that doesn’t mean he sits at his desk by his lonesome when his co-workers go out to eat. He goes with them, packed lunch included! Now, he’s got our roommate doing the same thing! Don’t feel intimidated or embarrassed if you want to eat a packed lunch. You go out with your co-workers to mingle and to relate, not to outperform each other in food spending.
  • Make cooking at home fun! Instead of cooking the same meals that you usually cycle through, take time to try a new recipe together once a week. Leave room for experimentation. Cooking does not always have to be buy the book. Or better yet, simply swing by the farmer’s market and pick up a few items. Challenge each other to make a new recipe using your most recent market finds. Whatever it is that will motivate you to cook at home is good by me.
  • Lastly, just eat! The hungrier you get, the more tempting it will be to get food in the easiest way possible (aka buying it already made for you!). Eating little snacks throughout the day keeps me satiated enough that my tummy isn’t always asking for more. Some voice in your head may be saying that the left-over no longer looks as appetizing as it once did, but once it’s in your stomach, that voice goes away. Remember that we eat to give us energy, to sustain us for what we need to do. We don’t always need to eat to please our egos. Some people eat just to make themselves “feel good”. That kind of thinking won’t get you through this frugal challenge. And I can guarantee you that making yourself your own meal can feel great, too!

A Frugal Approach to Halloween to Make the Holiday A Bit Less Scary

Halloween marks the start of the holidays for us. That’s about the only celebratory sentiment I have towards this holiday. I don’t typically celebrate Halloween at all, except to rejoice that Thanksgiving, Christmas and New Years are just around the corner. Anyone who knows me can tell you that I avoid anything that could even remotely resembles scary. I go so far as to avoid YouTube in October, just in case I see one of those ads for an upcoming horror movies. To be honest, I was not introduced to the concept of Halloween until I moved to the United States at 8 years old, an age nearing when it was time to outgrow playing dress up. Additionally, I’m a DENTIST. So I have never passed out candy in my life, and likely never will. It has helped that we live in a live/work loft, since no children walk along the streets of downtown knocking on the doors of businesses already closed for the evening.

Despite my Grinch-like approach to All Hallows Eve, I understand that there are others who choose to celebrate the holiday. And I’d hate to send the wrong message here, because frugal living does NOT equate to deprivation. There IS a way to enjoy your favorite holiday, whatever it may be, without excess consumption. Hence, a brief guide to a more frugal approach.

Costumes

Create Your Costume

Remember in college, there were Halloween parties to go to, but most of us were broke? I think being poor really does require one to tap into our most creative selves. If my memory serves me, almost every costume at a college Halloween party was home-made. Why not have some fun and re-create those days? I remember one year, I had a witch’s hat and a name tag sticker that said “Hi! My name is Sam!” and I went as a Sam-witch. Another favorite was a classmate carrying around a cereal box and a knife, calling himself a “serial killer“. Cheesy?  Yes. Punny? Absolutely! A conversation starter, at the very least. If you’re interested, here is a list of clever, last minute Halloween costumes.

Borrow A Costume

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As a zero waste advocate, I am all for borrowing! Not only costumes, but everything else, too,  from vacuum cleaners to clothes steamers. Since this is a Halloween post though, let’s talk about borrowing a costume. I may not like Halloween, but there are people who live for this holiday! I have a dental assistant who loves it so much that she goes to multiple parties and wears different costumes to each one. I happened to mention to this particular assistant that I did not have a costume to wear to work, since we were required to dress up for the kids. I inquired if there was a costume I could borrow. She immediately listed off a number of costumes that she had on hand, and we decided that I would go as a pizza slice this year, because I like pizza. It’s that easy. Another assistant of mine mentioned that they were doing the same as I, borrowing their sister’s costume from a previous year. Props for those friend circles who create a chain of borrowed costumes. Gather a group of people and trade amongst each other, to have “new” costumers for multiple years without spending a dime!

Wear a Hand-Me-Down

In line with the previous thought, there are many people who refuse to wear the same costume twice. Offer to take their hand-me-down costume for the following year. If you create a loop with such a friend, you may get a “new” costume from her every Halloween, and she has a way to de-clutter her costumes without throwing them directly to the trash. I would consider that a win-win.

Re-Use the Same Costume Every Year

This is the one advice that I get the most push back on, but I think it’s worth considering. For four years, I wore the same teddy bear costume. For three years prior to that, you could rely on me showing up as Sally from Nightmare Before Christmas. Part of the reason definitely had to do with the fact that I did not put much thought into Halloween and ended up having to make do with what I already had whenever I would get <s> invitied </s> dragged to a Halloween party. The other part? It saves money!

Decorations

I cringe whenever I walk by houses decorated with all sorts of fake cobwebs and plastic spiders and inflatable black cats and flying witches. Cringe because, firstly, they DO give me the creeps, and secondly, because I think of all that plastic waste. I can guarantee that very few people re-use cobwebs that have been sitting in their bushes for a month. In fact, those fake cobwebs may be intermingled with entirely real cobwebs. Here are a few thoughts I have on decorations.

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Pumpkin on the Porch

I’d like to pose one simple question. Will lack of decoration stop children from trick or treating at your house? I don’t know about you guys, but as a child, even if no decorations were up, I still walked right up to the door with my siblings and tried my best to solicit candy. Call it hopefulness, or ignorance, but children will still want to TRY. So a lack of decoration will not deter a child, unless mom or dad is with them and is telling them to respect the privacy of that one particular home owner. Therefore, the simplest way to decorate your home and signal to little beings that you’ve got candy in store is a single pumpkin on the porch. Okay, or maybe a few pumpkins on the porch, and some in the windowsill. Carved pumpkins optional, the use of its insides non-optional. (Who doesn’t love pumpkin cake?) In fact, when I was young, this was how most houses were decorated. There was no excess consumption of plastic skeletons, and scary moving ghouls. No myriad of plastic webs on the front yard. Plus, kids who trick or treat are only thinking about one thing: The treat! They aren’t judging who’s got the best house on the block. I’m just saying.

YouTube Videos

If a pumpkin on the porch just doesn’t cut it, or if you are looking to be a bit cooler than that, try adding effects using a projector. We happen to have a projector at home, in lieu of a TV, so we could easily point the projector towards the front of our house and play music or an image that we film on repeat. Try projecting Singing Pumpkins or a Zombie Invasion.

Use Yourself as Decoration

Is projected imagery still not enough? Want your house to be really scary? How about using yourself as decoration? This isn’t to comment on your physical appearance, but rather, at your ability to disguise yourself. I remember the days of walking by a porch with a lone monster or ghoulish figure sitting on a wooden stool or chair. Those were the houses that I knew were the scariest, because you never know when the monster would come to life and get you. The bowl of candy is by his feet, or worse, in his lap, and the sugary sweets are calling to your sweet tooth. But is it worth the venture onto that porch? If you are looking to scare little kids with decoration, why not use yourself, dressed up in the scariest possible way? Or get a group of friends and create a themed look.

Au Natural

Lastly, have you noticed that fall decor consists mostly of dead things? How appropriate for Halloween! In addition to pumpkins on the porch, why not gather organic elements and create a house worth visiting? Grab some fallen pine cones on your nightly walking path. We’ve got tons at the park, so you may too. Display them amongst the pumpkins. Gather a bunch of broken twigs and sticks, and tie them together with twine to make witches brooms. Collect some “poisonous” apples and throw into a cauldron or basket. Or better yet, bend the thinner twigs into a wreath, and collect autumn colored leaves to make a fiery statement on your front door. Got paper? Cut out spider webs and bats to hang from the ceiling and walls. A combination of all these natural, bio-degradable, and sustainable elements is enough to make any person want to swing by! Hey, if you have a black cat, maybe he’d like to perch on the window sill all night, too. Who knows?