At last!!
At long last, I have reached the 50’s! Can you believe I’ve been in the 60’s since July of last year!?!
It really doesn’t take long to notice how much reducing my monthly payments impacts my timeline.
Current stats on my student loan:
Original Balance: $112,258
Remaining Balance: $58,600
Monthly Payments: ~$1,720.00 (down from $2,720) 😦
Term Remaining on Debtor’s Prison Sentence: 3 years and 1 month 😦
Current (variable) Interest rate: 4.55% (up from original rate of 3.42%)
I made an extra $84.09 payment to bring my balance to an even $58,600. My monthly payments over the past several months have been not much more than the minimum, which is substantially lower than the $2,720 payments that I was making for most of last year. My monthly payments are down currently for three reasons:
One. I have an international trip coming up relatively soon and I need to have cash on hand for that period of time.
Two. My credit card debt. When I get back, any remaining cash will immediately be put toward my credit card balance until that is paid off. After that, I can get back on track increasing payments to my student loan.
Three. This year I will be making payments towards maxing out my Roth IRA. This will also cut into the money I’ve been throwing at my loan.
I knew I’d have to cool it with my extra high payments eventually as I couldn’t restrict my spending enough to support it. Now, it’s looking like I will be in debt another 3 years, according to the chart. But I’m not too worried yet. My size of my payments will increase in the second half of the year, so this should go down to about 2.5 years I guesstimate. One month at a time…
Shake Your Moneymaker!
Yeah, you know what time it is. Time to mosey down to Motown. This song is my anthem right now and was also one of Motown’s first hits. Shake it, but don’t break it!
Barrett Strong – Money (That’s What I Want) [1959]
Barrett didn’t know this, but that song was written for me.
Blogger Blasts
Zach @ Four Pillar Freedom has been motivating me, through his posts, to give my net worth more attention and to remember why it’s important to work on increasing it (and investments) now rather than later. If you have an interest in financial independence and enjoy data visualization like I do, check out his blog. At 24 years old himself, Zach’s posts tend to aim towards Millennial readers, however, good personal finance principles work for all and provide value regardless of age.
Sample posts:
- The Math Behind Saving Your First $100k
- Money, Money, Money: Visualizing the Net Worth of Rockstar Finance Blogs
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BigLaw Investor @ The BigLaw Investor is, surprise!, a law school survivor and ‘Big Law’ lawyer who writes about personal finances and paths to financial independence. His posts are primarily aimed at law school graduates (not me) with big law salaries (definitely not me), but are still helpful for the rest of us with big debts, or those looking to make big changes to their finances. Check out his blog.
Sample posts:
What’s Next
I’m going to look into refinancing into something fixed before interest rates possibly shoot up another 1% this year. I’m a little anxious about possibly switching over to a new servicer, but if it can save $$, I’ll be willing to try it. I can always switch back if I want to.
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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW Archives)
Double Debt Single Woman 
Congratulations!
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Thanks, Dolores!
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I recently found your blog and have read through the entire thing. You are an inspiration! Very motivating for me to get out of my own (massive) debt. Thanks!
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Hi Jill,
Welcome! Thanks for reading and commenting. I’m glad that this blog is helping to inspire you to drop the debt. I went over to your blog and read your posts. For some reason I’m not able to leave comments on some Blogger blogs 😦 , but I’ll be following along! Over $200k of debt is indeed a mountain. With your husband and you working together, you can both tag-team to hammer it down. Welcome to the club of mega-debt monster slayers here. 🙂
(Edit: I’ve found that if you set your comment options to also allow ‘Name/URL’, I can post using that.)
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Thank you! I changed my settings so hopefully I opened up the comments. I’d love to have your input on this journey ahead. Someday I’ll claim that “mega-debt monster slayer” title!
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Hi DDSW,
Have you heard of YNAB? It is a budgeting app that you may find useful and help to keep you from going into credit card debt in the future. It costs around 84 a year, but you can try for free for 34 days.
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Hi Alisha. Well, unless YNAB is going to rip the credit card out of my hands, I don’t see how it’s going to stop me. LoL. I’m joking (mostly).
I’ve never actually tried YNAB. I read up on it. Thanks for the suggestion!
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Yes! That’s how you start the year! Congrats! Awesome! Goals!
Yes, I agree adding money for retirement is important. Let’s let the time work for us.
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Thanks, Nicole. Hopefully, I don’t stay in the 50’s as long as I did in the 60’s. I’ve left it too late not to put something into retirement now. I can get lost money back, but not lost time.
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I think it is a great idea for you to switch servicers!
I suggest you switch to a fixed interest rate, since rates will only continue to increase given the economic climate. Just be careful about switching to a new servicer too many times. The more you refinance, the more your credit score will go down. The further your credit score drops, the harder it will be to get a new servicer and better rates, etc.
Also, make sure you are getting a deal. A lot of servicers like Credible, Earnest, and SoFi give you money for refinancing with them. I get emails from them about referral bonuses all the time. Call directly and ask if you can’t find anything. I’ve seen bonuses range from $100 to as much as $1,000 depending on the conditions. Since you are still over $50,000, you will probably qualify for one of the better deals.
Congrats on being in the 50’s and good luck!
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Thanks, SaraBee! Thanks for the heads up on switching servicers too many times. If I can get a good fixed rate I plan to stay with that servicer for a while, unless they turn out to be difficult to work with.
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Hi Girly,
I love your balanced life. I am so excited about your trip! Travel is my “make it happen” for this year. Stay disciplined and devoted. You are amazing. Question: what software program do you use for your graphics? They’re great!
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Hey there. Yes, I’m going to work in travel while paying off debt. I don’t want to be on a “deferred life plan” and end up waiting until I’m closer to 50 than 40 before I can start enjoying life.
The tool that I used for this post is https://unbury.me/
Enjoy!
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Yey, congratulations!
It sounds like a good choice to at least look into refinancing to a fixed rate. You don’t have that long to go, so worst case scenario you’ll be paying for some peace of mind for the next 2-3 years.
I know that’s not the route you’re taking, so I’m just wondering – are you ever tempted to use your investments and pay off the remainder of your debt?
And I’m so happy for you that you have another much wanted international trip happening this year. 🙂
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Thanks! I’m also more excited than I can put into words about the trip. So looking forward to it.
I’m not tempted to use my investments to pay my debt at all. My ‘investment’ money is all locked away in retirement accounts. I could take the money out, but the penalties for doing so before retirement age would be horrible.
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I’m so excited for you to be in the 50’s. And very proud.
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Aww, thanks! 🙂
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Yasss! Way to go being in the 50s! The 40s are right around the corner.
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I’m already ready to be in the 40’s, but, alas, it’s going to take patience. Thanks. 🙂
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The 50s look great on you! I think you’ll get what you want – especially with all of your dedicated focus!
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Thanks. 🙂
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I started reading your blog on monday and have read every post! I find it amazing how you handle your financial issues. Congrats on being in the 50’s! I don’t have any debt, but I still stress about being able to buy a house or having children in the not-so-far future.
Reading your posts made me realize how lucky I am that Belgium has a decent social security system. I have health issues (mainly severe migraines) for which I had to consult with specialists and buy expensive medication. Luckily, most part is covered by the health insurance. I visit a neurologist at least twice a year, but the total cost for me is 24 euros for both visits (I got reimbursed for the surplus I paid to the hospital). Two years ago I stayed at the hospital for a sleep study, which cost me 30 euros. The rest was covered by my public health insurance (mandatory for everyone and paid for with taxes) and my private health insurance via my employer (this costs me 20 euros/month for myself and my boyfriend combined!). I can’t imagine having pay for this kind of health care out of my own pocket.
I hope you will get to zero debt the fastest way possible. Meanwhile, enjoy the little things and especially the trip you have planned! You deserve it!
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Howdy! Wow! Thanks for taking the time to read all my rambling posts. 🙂
Yes, the US has some work to do when it comes to controlling healthcare costs.
Thanks for the positive words. I will enjoy my trip and try not to stress about the cost.
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Wowza, the 50s! Sending cheers and positive vibes to last you through the ‘decade’. 🙂
Are you considering refinancing the loan again maybe? Or maybe part of the loan, just to see if things play out better on “the other side of the fence”? Maybe if there’s a smaller balance involved (10-15K), the lenders would be amenable to a lower and fixed rate? I ran your numbers through my spreadsheet: you are paying over $7/day on interest at current principal balance. Also, as you pay down the smaller balance, maybe eventually put it on a credit card (loan transfer option)? I am certainly considering that for my unsubsidized loan, the whole $8.8K that remain there. I have enough in savings to cover the balance once the promotional 0% interest rate is up. Alternatively, one can transfer multiple times (even with a 3% upfront charge, it still beats the 4.55%).
Either way, keep up the great work, stay focused, and enjoy life in the moment as much as possible.
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Yes, I am planning to shop around for a lower interest rate now that I’ve paid a chunk of balance down.
Unfortunately, my lender doesn’t allow credit card payments. Money must come from a checking account. They are aware of that strategy, it seems. 😦
Thanks for the encouragement! 🙂
I hope you are settling in well to your new place.
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