Shaving Money ($42,888.33)

As I look for more ways to save money in my routines, I had an unexpected insight on saving money with something that costs more than you realize…shaving. About a month ago, I had the pleasure of seeing Tristan Walker speak at an event. He’s the creator of the Bevel shaving system and an amazing entrepreneur in Silicon Valley. He talked about a problem he experienced with modern shaving products, which was razor bumps. Nasty little ingrown hairs caused by shaving.

He said in the 70’s and 80’s, Gillette and other companies started introducing multiple blade razors claiming they provided a closer shave with less irritation. This just wasn’t and still isn’t true (maybe a closer shave but at the cost of your skin health). Pure marketing BS. Gillette has had to settle false claims in the past. In fact, research is showing that depending on your facial hair type, multiple blade systems are more damaging to your skin and create more ingrown hairs. Specifically, men of color tend to have more curly facial hair and are more prone to these razor bumps. Again, depends on your facial hair type.

I had an aha moment because over the years I have had annoying razor bumps but never thought about my shaving routines. Gillette brilliantly sent me a Mach3 razor when I turned 18 and I mindlessly never looked back. After some research, I found that people are going back to the double edge safety razors because they cause less irritation and they’re a hell of a lot cheaper. A couple weeks later here I am with no more razor bumps.

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from hairfreelife.com

Disclaimer: Do what works for you. If you have never used a double edge safety razor, be sure to do some research on how to shave with this type of razor because it requires different techniques.

Gillette Fusion and Mach3 blades cost approximately $2-4 per replacement cartridge, but many of us just pick up a multi-cartridge pack for $20-35. The replacement blades for my current razor…100 blades for $10-14!! Each blade gives you 4-5 shaves. The blades are a lot cheaper and better for the environment because they reduce waste (no plastic). Once you’ve stockpiled enough blades, you can dispose of them properly depending on your city’s metal recycling program. Save money. Reduce waste.

On a separate note, my wife and I took a chunk of savings and threw it at the school debt. $42k left to pay off. It’s happening!

What other creative ways have you found to save money?

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Feel the Pain ($57,693.77)

I haven’t posted in a while. Guilty as charged. I got the taxes done and after all the stuff related to running my photography business alongside the fact that this was the first year that I filed as married, we got a sizeable tax return. Guess where that’s going? Straight to Navient and that good ol’ student debt. Damn I have made some good progress. Yes I am bragging. I have earned it. A couple years ago I was almost $130k in debt (school loans and credit cards). As I look back at my student debt journey, I have been trying to think why I have been so motivated and what keeps me going. One would think it is the satisfaction of seeing that debt number go down every month when I make a payment whether it is small or large…but that just isn’t the case.

It is the pain that has motivated me.

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(from teen10mag.com)

That is sort of sick. What’s the story? At a basic level, we can think of motivation as the stick or the carrot. The carrot is the dream of being debt-free which is a long term goal, but even the short term goal of seeing the principal balance go down isn’t that satisfying. It’s like trying to lose weight and you’re only seeing a pound of progress per month. It is progress but it isn’t enough to celebrate like crazy. Short term progress over time will yield big results, but for me and my debt, it is the daily pain that has pushed me.

Introducing…the daily interest calculation or DIC for short. And this metric really is a dick. How do you calculate this? This is copied verbatim from the Navient site:

The amount of interest that accrues on your loan is determined by a simple daily interest calculation:

 Your current principal balance

× The number of days since your last payment

× Interest rate factor = interest rate ÷ 365.25 (number of days in a year)

= Your daily interest rate

If you have multiple student loans, you likely have multiple interest rates, so you will need to do this calculation for each loan, and add them up to see all the daily interest.

Once interest is capitalized, it becomes part of the principal balance and interest begins to accrue on the new principal amount.

At the end of each year you should receive a tax document from Navient and each of your loan servicers detailing the exact amount of interest that you paid.

The good news is that the IRS treats capitalized interest as interest for tax purposes and is deductible as payments of the principal balance are made on the loan. However, no deduction for capitalized interest is allowed in a year in which no loan payments were made.

Let’s use my current situation. Current principal balance is $57,693.77. Last payment was 1 day ago. Interest rate is 6.125%. Using the formula above that would be:

$57,693.77 x 1 day x (.06125 interest rate ÷ 365.25) = ~$9.67.

In other words, I am paying $9.67 every single freakin’ day on INTEREST. Every 30 days, $290 is going to nothing but interest. Ouch. Pain. Motivation. That’s a solid meal in downtown Minneapolis every day. That’s a car payment every month. That’s money towards an investment that could earn me some money. That’s a kid’s tuition savings. That’s seeing a movie every day. That’s a couple drinks at happy hour. Whether it is a frivolous purchase or a responsible long term investment, that is cash money going out your pocket and into The Man’s. The opportunity cost of that money is pain that we don’t always think about.

Some people have low interest rates, which is why they don’t feel compelled to pay of their debt in an aggressive manner. I would argue that the interest you’re accruing is actively working against any positive interest you’re gaining. All depends on your unique scenario, I know.

There you have it. Some more insight into what is driving me to pay this beast down. What motivates you?

Celebrating Major Momentum ($65,587.95)

When you’re paying off debt like a madman, the week-to-week motivation is draining. When you have a longer term goal it feels so far away…because it is. You see friends buying houses, cars, vacations, and there are definite moments of jealousy. I remind myself that I made the decision to go to college and grad school, and I know these decisions are a long term investment…yet I still feel bad like I’m behind or something. First world problems, right? Yep, they sure are. This is why it is important to quit the pity party for one and look backwards to move forwards. I spent a moment to look back at the past 12 months, and it is absolutely bonkers how much progress I have made. Re-motivated. IT IS PAYING OFF!

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(image from theverge.com)

In 2015, I have paid a total of $31,392.61 towards my student loan debt. Boom. About 16% of this ($5,121.88) was interest, but that is expected because the amount 12 months ago was just under $100k with 6.125% interest. Am I bragging? Yes. I earned this and it feels great. In May, I paid off my second-to-last student loan so now I only have one payment which is the big consolidated loan that had a principal amount around $80,000.

The average class of ’15 college grad (who took out student loans) has about $35,000 of school debt. So if I were average, I would have just about paid my debt off, but I’m above average…which isn’t so awesome in this case. I made some poor financial choices and I am learning from them big time. When looking back to the time around 2011/12, my financial life really felt like it was out of control…15 payments every month including rent, cable/internet, cell phone, car/renter’s insurance, electric, 6 student loan payments, 2 credit cards, Netflix, and a gym membership. Nearly $6k in credit card debt on top of all my student loan debt.

Fast forward to the end of 2015 and here I am with just over $65k left to pay off. I’ve paid off just a little more than half since I finished grad school. I am really proud of the financial work I have done this year. Not to mention we had a wedding and honeymoon in there that we cash flowed. For those of you that want to pay off some debt…you can absolutely do it. I kicked some major debt butt this past year, and my wife and I are scheming up ways to try and pay off even more in 2016.

It feels good to reflect on 2015 for a lot of reasons, but I’m taking a moment to celebrate my financial progress. Cheers to you for all you’ve learned in 2015 and here’s to a great start to chapter 2016!

P.S. The wonderful people at NerdWallet included some advice I gave for recent grads in a recent blog. Check it out and be sure to follow their blogs!