Writing Wrap Up + Our Pledge + $260,000 In Loans

Hey yo! It’s writing wrap up time. Enjoy a bunch of awesome personal finance articles linked below and yes, the student loan balance listed in the title is for real. Details below!

Life Update: Our Pledge

The hubs and I have decided that we will go to the pool and the beach at least once each every week until we leave Grenada. We know that this semester will get crazy, but since our apartment complex has a pool, and we’re a five minute walk from the beach, we have absolutely no excuses. I’m going to stay accountable by posting pictures here and on Instagram with hashtag #ourpledge. Want to join me by pledging to do something just for you? Here’s our pool pic from yesterday. We have yet to go to the beach this week, but we’ll be fixing that this weekend!

our pledge

Student Loan Update

I haven’t done a student loan update in a while, so here goes nothing.

The Good News: I paid over $2,000 towards my students loans in the past two months just using my side hustle income.

The Bad News: We’re adding more to the loan totals each semester with the hubs’ tuition, but that’s what happens when you decide to go to med school. :) Here are the new totals:

Cat’s Loans

Bachelors & Masters Degree Consolidated Loan: $34,635.46

The Hubs’ Loans

Bachelors Degree: $3,895.80

Masters Degree: $65,070.13

Medical School So Far: $155,928.70

Total Cost For Our Brains So Far:

$259,530.09 or if you want to look at this this way, it’s a really fancy invisible house.

All loans have over a 6% interest rate with the exception of the hubs’ undergrad loan, which is subsidized. Remember when we had subsidized loans back in the good ol’ days?

So, there’s really not much else to say except that we’re surprisingly calm about all of this. We both work hard, and we’re going to pay his loans back as soon as the hubs gets through school and actually starts practicing medicine. We’re trying to pay mine back over the next 2-3 years, depending on how this whole blogging full time thing goes. :)

Until then, I have every intention of living my life, enjoying Grenada, taking a vacation one of these days, and continuing to save and invest along the way. The hubs actually just got back from a really cool medical study abroad experience that I’ll tell you about next week, and I was beyond happy to pay for it with my side hustle income. So, I know not all financial bloggers would agree with doing a bit of traveling while we’re in this much debt, but that’s just how we roll. I’ll explain more next week. The hubs might even stop in and write about it himself. :)

Jammin’ Posts I Wrote For Others

A Unique Strategy for Pricing Your Services as a Freelancer

4 Ways To Get Great Art For Your Home Without Breaking the Bank

Posts I Thought Were So Cool

Greg was kind enough to ask me to contribute to a post, which asked if doctors make too much money. You get to read about my experience being married to someone during the first two years of med school, and his experience dating and eventually marrying someone starting with the 4th year of med school. Good stuff!

Holly is cutting costs left and right.

It’s no surprise, but Michelle killed it in the extra income department.~12k! Amazing!

Kathleen stayed in a bunch of places using AirBnB. Apparently there was some nudity involved…

Congrats to Nick for 6 months of blogging. You’re doing a fabulous job, and I appreciate all your comments on BB! :)

I can’t believe J$ didn’t get more for that sweet pram!

Catherine has a friend that she tries to help with budgeting, but her friend never listens. I can relate to this.

You know I love a post when I forward it along to the hubs: Let Your Kids Suffer. They’ll Be Better Off.

Carnivals Yo!

Thanks to the following bloggers who included me in their carnivals last week:
FITnancials, Midlife Finance, Hurricanes, Panties, One Cent at a Time, Your PF Pro, & Tortoise Banker

Connect

Don’t forget to enter our awesome $900 giveaway! You can also find me lurking here:

Have a great weekend, everyone! Are you pledging to do something nice for yourself over the next few months? Did our student loan totals make you feel better about yours? ;)

Co-op Bonds: What Restructuring Really Means for Investors

Co-op BondsThe following is a guest post from financial writer Jon Custer. If you would like to submit a guest post to Budget Blonde, please e-mail me at Cat [at] BudgetBlonde [dot] com.

On June 17, 2013 The Co-operative Bank announced a rescue plan to fill in a £1.5 billion retail hole caused by its takeover of the Britannia Building Society. This plan consists of The Co-op Bank going public and listing its shares on the stock market by restructuring its system of interest payments.

This move has alarmed many investors. However, The Co-op Bank is committed to making sure that investors will receive their assets back and that restructuring will lead to a more secure system and better long-term financial stability.

Which bonds have been affected?

Savings bonds, fixed-rate Isac, CIS bonds and many other types of bonds will not have any significant changes. Customers holding these bonds and accounts do not need to worry about their interest rates.

The affected bonds are known as permanent interest-bearing shares (PIBS). PIBS typically pay interest at 5.5%-13% a year, but will now see these interest rates cease. There are around 7,000 investors who own these types of bonds with Co-op Bank.

PIBS are issued by building societies, and since it was the takeover of Britannia Building Society which caused the downgrading of The Co-op Banks bonds, it is these specific bonds which will be affected.

What will happen to PIBS?

These PIBS will be used by The Co-op Bank for a “bail-in” as opposed to a bail-out. This means that The Co-op Bank will not have to use taxpayer money to make up their £1.5 billion deficit. Bond holders will be able to exchange their bonds for shares in the Bank in a debt-for-equity swap. They will receive a combination of ordinary bank shares and senior unsecured fixed income.

Should investors holding PIBS be concerned?

While small PIBS investors might be losing a bit on interest in the short-term, The Co-op Bank has offered assurances that they will get their assets back. In their debt-for-equity swaps these individual investors will likely be offered better terms than institutional investors. They may also get preferential terms when it comes to new bonds and shares launched by the Bank. This will allow current PIB holders to become significant minority shareholders in The Co-operative Bank.

Another plus is that The Co-op Bank will offer free and independent financial advice for the investors affected by this restructuring. This will help them make the right financial choices in the midst of complicated changes.

Long-term improvements

The Co-op Bank’s restructuring will bring in the £1.5 billion needed to return them to good financial standing and provide security and stability for investors over the long-term. The Co-op Bank has seen some tough times recently, coupled with millions of pounds in losses over the past several months. Without the necessary restructuring its customers and other stakeholders may have faced many financial consequences.

But the new system, which will see PIBS investors gain stakes in the Bank, will bring in long-term improvements for themselves and for everyone involved. Investors will be able to share in and prosper from the positive transformation that these changes will bring to The Co-op Bank.

Jon Custer is a former bank manager. He now spends his days walking his dogs and writing about all things money. To learn more, go to Money Vista.

Photo Credit: FreeDigitalPhotos.net