It’s October! My favorite month, ever.

I love fall so much. I love pumpkin everything, crisp weather and the change in seasons.

It’s also my birthday month. In a little over 2 weeks I turn the big 3-0. WOW.

I am happier than ever though. I remember just six months ago thinking to myself that I was itching for a huge change by my 30th birthday. Well, I got what I wanted.

I quit my job and have been getting more opportunities since FinCon, which was so worth it. How did I do it? I followed up with every single person I got a business card from. Sometimes it’s just a matter of telling people that you are looking and are open to new opportunities.

September was quite busy work wise, but I also had some fun adventures thrown in there. I went camping for 48 hours and completely disconnected from technology and I also went to New Orleans for FinCon and managed to work only 2 hours while there (though I was working furiously the days prior, working many late nights).

I am so happy to report that even with taking 7 days off in September, my income increased 10% from August.

My income breakdown is as follows:

58% Writing

7% Virtual Assisting

3% Sales (sold some books)

27% Event work (includes brand ambassador work and my part-time job at a Jewish congregation)

2% Side Hustle Coaching

3% Advertisement

As you can see, my income doesn’t come from one place. I like it that way. It will be interesting to see how this shifts in the next few months as brand ambassador work slows down – but as I mentioned, I have some new opportunities, which will hopefully put me in a better place. The goal is to steadily increase my income every month.

Now on to the debt…

But first, a confession. At the risk of getting verbal stones thrown at me, I have to let you know I committed a cardinal personal finance sin.

I withdrew $1,700 from my already pathetic retirement account to pay off one of my loans. Yep, I borrowed from my future to pay for my present. What prompted this?

I wrote this article on Joe’s site and asked the readers what I should do regarding balancing my retirement and student loans. Joe has a great group of readers, but because Joe’s site is about retirement I thought people would pat me on the back and say “great job on being more balanced and putting more to retirement!” Nope. The overwhelming response was to pay off my crazy high interest debt.

Before you think I did anything too rash, I sat on it for a while. I looked at the numbers.

Do you know how much my retirement has made this year?

Interest Paid Year to Date: $9.93

My student loan payments cost me hundreds of dollars in interest per month, which results in thousands per year of interest. The math looked at me right in the face. I couldn’t deny that my money would do more going to debt.

I understand I’m looking at a 10% penalty for this, but what’s done is done and I still think it will work out financially. If you want to read some great information on Roth IRAs, check out this post at Finance Girl.

This debt journey has its ups and downs and moments where things change — moments where I make big decisions that seem both right and wrong. Although I was previously craving more balance, I realize that for now I really want to focus on my emergency fund and debt. I have changed my retirement contributions to $20 per month, mostly so I can keep the habit. I think automation is great for creating positive habits to achieve financial success.

So there you have it. My confession. But look at what a nice number I put to debt:

$2,341.51 to debt.

Current balance:

Undergrad loan – $6,317.52

Grad loan – $29,429.73

Total: $35,747.25

My graduate loan is now under $30k! I want to scream from the rooftops about it. For some reason, psychologically, being in the twenties seems much more manageable. It feels like I’m making progress. This is a far cry from when I graduated in May 2011 and I had a balance of $58k on my graduate loans.

Here’s to hoping that I continue to grow my work and can continue to put more to debt, without getting out money from other places.

I am motivated and inspired!

Also, someone anonymously gifted me a Starbucks eCard. Literally, I got an email that said, “Anonymous has given you a Starbucks card!”

I thought it was a scam at first, but I looked at it cautiously. There was even a note. It said, “Melanie, Just because you are awesome and wanted you to have a special day!” By golly, that was one of the sweetest things someone could do. It did make my day! To anonymous, thank you!

Kayla had a great idea of paying it forward! So if you comment on this post, I’ll randomly choose someone this Friday and give out a $5 Starbucks gift card too. Go get your pumpkin spice latte on.

How is October going so far?

Update: Thanks to some friends who are smarter than me, apparently I won’t have to pay a penalty as I withdrew from my Roth IRA. I swear I read a lot of info on the matter when I made my decision, but the language wasn’t very clear, thus my confusion. Either way, I’m not a financial expert as you know — just someone sharing my journey out of debt.

Melanie

Melanie is a freelance writer currently living in Portland, Oregon. She is passionate about education, financial literacy, and empowering people to take control of their finances. She writes about breaking up with debt, freelancing, and side hustle adventures at DearDebt.com.

Currently she puts more than 50% of her income towards debt, while living a frugal, fun life. In addition to her love of personal finance, art and music, she is also a karaoke master. Follow the adventure @DearDebtBlog.

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44 responses to “September 2014 Recap and Update”

  1. Pumpkin everything season <3

    I tried a pumpkin donut from Dunkin Donuts this weekend and it was heavenly.

    Great work on your debt repayment! I, too, am going to be faced with a retirement decision based on a company change in the near future. I've thought about writing a post to get opinions to help me decide what to do!
    Brandy @ Busted Budget recently posted…I Quit My Job And Got A Promotion!My Profile

    • Melanie says:

      Oh, I miss Dunkin Donuts. That does sound heavenly. Sadly, my jobs have never contributed a dime to my retirement, but it’s definitely something to consider when changing jobs.

  2. Happy (almost) birthday! 🙂 wow, 3-0…I would love to go back to that time but then I would be neglecting my (sometimes) awesome present and my sure to be amazing future. 🙂 I love the idea of paying it forward! And I think those kinds of neat little surprises are the best!
    Tonya@Budget and the Beach recently posted…Falling for FallMy Profile

  3. Congratulations on reaching the 20s!! woop woop
    Natalie @ Financegirl recently posted…4 Steps To Get Financially Prepared For ChristmasMy Profile

  4. Ms. Mintly says:

    I have thought about doing this as well! The retirement / student loan payoff balance is so tricky to navigate (in my opinion).

    Congrats on getting your loans down so far in such a short amount of time!

    Also, yay for Starbucks and thanks for paying it forward to a lucky person!
    Ms. Mintly recently posted…In Which I Briefly Ponder Mint.com’s MarketingMy Profile

    • Melanie says:

      Yeah, I don’t recommend doing what I did. It was only right for me, in that moment. I hate putting only $20/mo to retirement, but I hate my debt even more. Excited to give out some Starbucks love!

  5. Mario says:

    Interesting. Was there any option to use post-tax retirement savings (i.e. any of the Roth flavors) to do it? Those, you can generally take out a good chunk without penalties or taxes.
    Mario recently posted…Six tips to vacation in New York WITHOUT looking like a touristMy Profile

    • Melanie says:

      It was from a Roth IRA. From my research, because I’m not 59 1/2, disabled, or a first time homeowner I will get a 10% penalty on the amount I withdrew. However, it also wasn’t super clear using language like “may” so I guess I will understand the true ramifications of my actions at tax time?

  6. Kassandra says:

    Although I won’t lie and say that I agree with your decision to raid your retirement account, I do understand what drove you to do it. I too think it’s important to focus the majority of your payments to debt and still keep contributing to your retirement account, regardless of how little. Happy Birthday in advance Melanie 😉
    Kassandra recently posted…Making Good On My Investment – Part IMy Profile

    • Melanie says:

      I’m definitely not expecting anyone to agree with me. AND KIDS DON’T TRY THIS AT HOME. I feel really guilty about it, but it felt right at the time. I won’t be doing it again. Thanks for the pre-birthday love 🙂

  7. Your confession is exactly why I coach clients to not invest as much in retirement especially because they have a lot of life to live and manage before retirement. I understand the value of retirement accounts; however, there are other factors at play and you have to balance them all. Congrats on getting your grad loan below 30k!! HUGE accomplishment!
    Shannon @ Financially Blonde recently posted…Music Mondays – Getting MarriedMy Profile

    • Melanie says:

      It’s all so confusing! I feel like I “know” what the right answer is — but debt throws a wrench in everything. And I really despise my debt and want it gone asap. Thanks for the support! It makes me happy to know I’ve paid off so much debt making such little money.

  8. I think it’s great you’re “confessing” and letting us know. That can be difficult in and of itself! But I’m glad you sought the opinion of others, ran the numbers, and decided it was right for you. I’ve sadly never had much of a chance to contribute to retirement savings, so for me, the question is drawing down on my emergency fund a bit. I get so anxious thinking about it, though.

    I’m happy things have been going so well for you! I have to agree – October and November are two of my favorite months due to the weather. That’s awesome someone gifted you a $5 Starbucks card! Unexpected surprises like that make me warm and fuzzy. =)
    Erin @ Journey to Saving recently posted…Being Grateful: Forty-Seventh EditionMy Profile

    • Melanie says:

      It is hard to confess. Part of me thought, “well I could just not tell people and they’ll never know!”, but I want to share my pain, struggles and triumphs — even if it is leading by what NOT to do. Because this is what happened and I’m being honest and sharing my perspective. I felt vulnerable sharing this and I’m not super proud either, though I think it makes sense for me.

      I depleted my EF from 10k down to $1,500 but now it is back up to $3,600. That was when I had a FT job, insurance, etc. I just want to get to the 5k mark now and then focus on debt 100%.

  9. I’ve thought about pulling from my 401k to pay down a debt too. I think its okay as long as it doesn’t become a habit. And those interest rate are usually terrible in comparison to what you’re making in return.
    Megan @ MeganAndEggs recently posted…What Put Me into Debt and Why I’m Okay With Most of ItMy Profile

  10. anna says:

    Woo Hoo about your grad loans being in the 20’s, and WOO HOO for almost being part of the Dirty 30’s!!! 😉 I absolutely love this decade since it seemed like a lot of things started to gel, and I hope it is the same for you or even better! I think that was a great idea about cashing in retirement for your student loans – that wouldn’t have been my thought right away, either, but the numbers make sense!
    anna recently posted…Pregnancy Notes Round 2!My Profile

    • Melanie says:

      Feels so good! I think my thirties will be good. I was kind of a mess in my twenties, so I’ll be better 🙂 The money made sense for now, but I’m excited to get these loans gone and start on the next goal.

  11. Janet says:

    Happy nearly birthday! Next month is my big 4-0, don’t know where that crept up from because five minutes ago I was 27..

    I have not much idea about the US tax/ student loan system as I’m from Australia, but it sounds like you made a considered and sensible decision. Well done on the ’20s’ milestone.

    You are only just hitting 30 so you still have another 30 years to grow your retirement savings. Plus, being a sensible spender, you won’t need silly amounts of retirement savings to ‘maintain your lifestyle’. You’ll be a great position when it comes to it, I’m sure.
    Janet recently posted…Almost a free lunchMy Profile

    • Melanie says:

      Thanks, Janet! I feel like I was 18 5 minutes ago, so I know how you feel. The big 4-0! I hope you have something nice planned 😉 I cannot wait until I’m done with these loans so I can start investing and saving for retirement properly.

  12. I havent really started on the retirement at all. ( I know I should fix that) I do have the debt I am clueless how to start getting rid of it. But hearing you story has helped. Happy early birthday
    marty @Martys Thoughts on Life and Moneye recently posted…If you could ask a budgeting/ financial expert anything what would it be ?My Profile

    • Melanie says:

      Well, now I only have roughly $500 in retirement. I think starting small is better than nothing at all. I would recommend getting a side hustle to pay off debt, and cut out things from your budget. But sometimes there is nowhere to cut back, so making extra $ is your only option. Thanks for stopping by!

  13. Michelle says:

    Feel proud of all of the things that you’re doing! I won’t say anything re: your Roth. I know that you did your due diligence. Early HAPPY BIRTHDAY!! Hope you have an amazing birthday.
    Michelle recently posted…$9.91 on Groceries at Whole Foods-The Art of Intentional UsageMy Profile

    • Melanie says:

      I’ll try and feel proud, thanks! You can say whatever you want about my decision re: retirement. I can take it — the good, the bad, the ugly. Thanks for the early birthday wishes, you rock!

  14. Glad you are making progress on your student loans. That has to feel good. Taking money out of your ROTH to pay off high interest date sounds like a decent idea to me. You definitely didn’t make a “bad” choice.
    Holly@ClubThrifty recently posted…Central Indiana Housing Prices: How Much Can You Buy?My Profile

    • Melanie says:

      Still feels like such a sloooooow process, but I’m getting there. I hate to take away from retirement, but the interest wasn’t working out right now. My grad loans highest rate is 7.9%, which is pretty bad. Thanks for your vote of support. 🙂

  15. Brittany says:

    Girl, you know I love free stuff, so here is your comment so I am entered to win. ;o)

    Another great post! It was so good to see you this weekend and catch up a bit/sing karaoke!

  16. Congrats Melanie! Sounds like an awesome month! Following up is HUGE
    Stefanie @ The Broke and Beautiful Life recently posted…Is Assuming the Worst Keeping You From Saving Money?My Profile

  17. Morgaine says:

    I would have done (and have done!) the exact same thing as you, Melanie. Yes, its hard to start from scratch when you start saving again (although you didn’t say if you drained your savings or not) but getting out of debt is worth every sacrifice. Also, congrats on getting the graduate loan under $30K 🙂
    Morgaine recently posted…Pregnancy ShoppingMy Profile

    • Melanie says:

      I have close to $500 left in retirement, lol. Not much, but a start. As I said, I’ll still have the habit with $20/mo. I can’t wait to get this debt gone!

  18. Blondie says:

    $9.93? That’s craziness. I made a couple hundred in my 401(k) this year, so I guess it depends on your chosen investments and risk tolerance?
    Some people might take issue with what you did, and this choice might not be right for everyone, but you no one can tell you that you didn’t do something useful and productive with the money. To each their own!

    • Melanie says:

      Yeah, well, I only had $2,200 in there and I do think I need a better retirement vehicle than Capital One 360. I wouldn’t recommend this for others, but it felt right for me.

  19. Leigh says:

    My birthday is in October too! Although I’ll be turning 31… Could have sworn you were older because it seem like you have it together 🙂

    I’m doing something similar, I fought like mad to get my debt below $50,000 before my baby was born (last week, I am so grateful she made it into October) which to me, feels much more manageable. As a compromise I’m putting $25 on my rrsp – because I think I can continue to afford that while on EI. Not as much as I like, but never out of my mind 😉
    Happy birthday! And best of luck with your hustlin’!

  20. Thanks for the link-love! I missed this post as I’ve been behind all week. Did you choose a winner yet?
    Kayla @ Shoeaholicnomore recently posted…I’ve Been Bad – Clothes I Bought this Year (so far)My Profile

  21. So glad I read at the end there is no penalty and in which case I fully agree with doing this. If there had been a penalty, I would say get it into a stock investment that pays more than interest and stop contributing to retirement until your debt is gone. So it’s all good and congrats on reaching that 20 something milestone as you head into your 30 something years! 😀
    debs @ debtdebs recently posted…55 Reasons it’s Okay To Be 55My Profile

  22. Lisa says:

    I’ve been thinking about withdrawing from my Roth IRA to pay off my credit card debt once and for all! I think I’m going to sit on that for a few more weeks… It’s a huge money move!

    Btw, have you tried the pumpkin flavored Oreos? My fiance says they’re pretty good, but I have to try it 🙂
    Lisa recently posted…Links Lisa Likes – Engagement Party RecoveryMy Profile

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