How Getting Organized Saved Us $12,000

How Getting Organized Saved Us $12,000

Today I have a guest post from my good friend Kate Barron-Alicante, a mom to two awesome kids and a soon-to-be financial planner. She’s incredibly smart and has a good story to tell, so I’ll let her take it away!

How Getting Organized Saved Us $12,000

More than any paid job I’ve had, I’m still amazed at how much relentless stamina and in-the-moment focus it requires to parent young children.

My mental “I gotta take care of that later” list just keeps snowballing…

  • “I gotta find time to sort through the kids’ closets to remove and donate the clothes they’ve outgrown…”
  • “I gotta find time to dust off those ceiling fans…”
  • “I gotta make space to check in on a dear friend whose parent passed away…”

Or “I gotta organize that pile of financial papers.” You know, the one that keeps accumulating as we get home from work, open mail, and embark on the dinner-to-bedtime ritual for our 1 and 4 year old

But sometimes, it literally pays to stop, pay attention, and get a little organized.

Here’s a recent example from my own life.

The loans

The early childhood stage in our family has been a particularly busy one. Both my spouse and I have been working full time while pursuing educational programs, but we finally got a moment to exhale a few months ago when my partner crossed the finish line to graduation. We were thrilled (and, of course, exhausted).

But that pile of financial papers? It did not exhale. Instead, the outreach from the student loan servicers had begun its drip, drip, drip.

The years of going through the cycle of filling out the FAFSA, filling out loan applications, negotiating with the university financial aid office, and persevering through semesters all had finally come to a close. Degree in hand, we now had to stare down the cold, hard financial cost of this degree.

How much did we owe? To which lenders? What kinds of loans? How many? When do we have to start paying? How do we start paying?

I didn’t really have a handle on it. This wasn’t so much because I was incapable of doing so, just that I hadn’t had the energy to deal with it before.

But now I had no choice.

Getting organized

Luckily I remembered that I had something to hold my hand. Something to help me start the process of untangling this mess and get a little organized.

You see, in addition to being our family’s CFO, I’ve been undertaking the years of training and education required to become a Certified Financial Plannertm. And along the way, I squirreled away some resources in an email folder to help me out when we got to this Promised Land.

Remembering this, I finally gave myself a cleared surface, computer, a cup of coffee, and an entire morning to confront The Loans.

My main tool was this Student Loan Organizer spreadsheet. Until I dug deeper into our student loans, I didn’t realize how handy that one-page document would be.

Have you actually tried to make sense out of the student loan servicers’ documents? Student loan repayment is truly the rabbit hole of our generation.

For example, let’s say you borrowed $15,000 one semester. Seems straightforward, right? But you’d be hard pressed to see $15,000 on your statement. That’s because in reality the loans are sliced and diced when they get made, with different interest rates, subsidies, and lengths of time to repay. Some may be from the government and others from private banks.

It’s a lot to keep track of, especially if you’re trying to do it all in your head.

So I got to work on filling out the spreadsheet. A friend even told me that my effort was overkill. “Just set up the auto-pay with the lenders, and get on with it,” he said. But boy, am I glad I ignored him and paid attention to the details.

Here’s what happened. While methodically sipping my coffee and pulling data to put into the spreadsheet, I had two windows open on my computer screen: our billing statement from the university and the account data from the private loan servicer.

And then I saw it: a $7,000 loan that the lender said they disbursed to the university, but the university never credited to our account. The interest had been accruing for many months on this loan that we had never received, and yet somehow we were on the hook for it. The university had not caught this sizable error.

If, as my friend suggested, I had just set up the auto-pay and starting paying the loans down, we would have paid back an extra $12,000 (including interest) to the bank that we didn’t actually owe, because we never received it.

What if I hadn’t looked? What about all of the people who can’t take the time to look?

Taking action

Armed with this new information, I got busy.

I called the private lender. I drafted a clear, facts-based letter to the university. Having worked in university administration for almost a decade, I’m aware of what types of issues merit escalation. And I know what kinds of issues can languish in lower level to-do boxes. I didn’t want to take my chances.

Within one day of sending the email to the right people, with the right tone, and the right supporting data, the university called us. They put a point person on the issue who stayed in constant contact with us over the four weeks it took to rectify the issue between the university and the private lender.

And then, finally, the loan and all the accrued interest were removed from our account.

All because we took some time to get organized and advocate for ourselves.

What’s on your list?

Now, with our student loan repayment underway, I get to turn my attention back to my mental “I gotta take care of that later ” list.

Next up, life insurance! Lucky me!

What about you? What’s at the top of your list?

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3 Comments... Read them below or add one of your own
  • Tim Kim @ Tub of Cash June 13, 2017

    Thanks for sharing. Now that you’re looking into life insurance, I recommend going the 20,30 term life route. None of that whole life / universal life crap =) The way my wife and I are doing it is laddering 20year term coverages for every kid we have. We have one kid so far but we’re planning on having a total of 3-4 kids.

  • Kathryn June 14, 2017

    The right resources-spreadsheets, documents, organization systems-make all the difference in finances and Matt has some great ones here :).

    On a smaller scale, being organized with finances can ensure that you aren’t paying bank fees, overdraft fees, credit card interest, etc. I’ve definitely noticed a difference in financial success and organization in my clients when I worked as a CPA.

    • Matt Becker June 15, 2017

      Great point. Those fees can be a real killer when they start adding up.

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