Closing in on Paying off Student Loans, How Should I Celebrate?
The main focus of this blog in the recent months has been financial independence, this is the long term game plan. Every day we move closer and closer to this goal. One thing you may not know is I have student loan debt, I graduated with close to $60,000 in student loans. I only paid the minimum payments up until 2013, that’s when I started making goals and debt repayment milestones. For 7 years I deferred payment, asked for forbearance, and made minimum payments. As you can guess the debt didn’t go away it barely even moved.
I have always been someone with big dreams, but thought I needed big debt to make it happen, I wanted that to change. I wanted big goals and zero debt, so I had to prioritize my life and my finances. I had already sold the Benzo de Lorenzo in 2011 which was my first big purchase out of college, saving myself hundreds of dollars each month in doing so, but quite honestly this was just to get me back to above water, I was drowning. I created a budget to see how I could move on to getting rid of credit cards and my rather large credit card balances, here is an example from the my June 2011 statement. I started knocking out debt one by one, in some cases I used the Snowball Method made famous by Dave Ramsey, but in other cases I chose to pay off the debt I hated the most, goodbye Citibank. After they were gone I started to focus on my student loans in 2013.
I made cuts in my budget and proceeded to set up a planned attack. I was focused, I wasn’t thinking should I pay off student loans or invest in my 401K. I was thinking let’s destroy this student loan! I had my fun studying abroad in London, having a few craft brews in the Northwoods, I’m not 22 any more deciding if I want to go to class, those times are over. It’s time to pay the piper or more clearly defined: to accept the unpleasant results of something I have done. I cut my expenses using Republic Wireless and cutting cable, I focused on making extra money with overtime at work and just as important I used all of it to reduce my student loan payments. I put in extra time on my eBay side hustle, which I still owe an updated look at my eBay business, coming soon I promise. I had a lot of student loan debt when I started my goal and I’m getting closer to getting rid of my student loans forever.
I don’t share many numbers* like salary, net worth, or even debt amount, in this case I’ll open up a little more because paying off my debt has begun to form a sense of pride and the closer I get the happier I get inside and outside. When I first started I was at $46,500 remaining in student loans. I wanted to make more than a $250 payment and that’s what I did, instead of $250 it became $1250, that’s how student loans get their a** kicked. I had about $10,000 left of my London Study Abroad loan and I completed paying this off in May 2014, a small victory party was had, it was like in sports when a team makes the playoffs they are happy, but they know they have a tough road ahead and this is just the beginning towards the championship.
I took a couple months off to decide how I wanted to attack the next debt, I was still making large kick a** payments to reduce the debt, just not with a detailed plan. I was reading this blog and that blog and listening to this guy and that guy. In my mind I was asking myself a thousand questions: Should I invest in another real estate property, throw it all in my 401K, create a dividend portfolio, what about my H.S.A., pay it all off, no pay only if it’s less than the treasury yield? I read and read and listened and listened, I decided I didn’t care what everyone thought or what this blogger or that blogger said, what mattered most was I WANTED MY STUDENT LOANS PAID OFF!
I made a goal, a climbing Mt. Everest type goal, that I would pay off all of my student loans in 10 months and with $25,866.26 to go this would be a difficult climb that required my best efforts otherwise I would fail. What makes this very difficult is I’m all on my own. I would not be using any of Mrs. Even Steven’s salary or any of our Rental Income, instead i’m working on my own to get to the top. I have been using my 9-5 job, overtime, eBay, future bonus, future raise, future tax return, and even possibly the sale of stock from MSLP and my Emergency Fund if I have to.
I’m almost there. For those who have student loans take a minute and imagine yourself without them…….It’s like jumping in the pool on a hot summer day or cracking a beer after a hard days work. Even imagining not having student loans feels like dipping your feet in the water, it just feels nice. I have been making extra payments, some of it is my regular minimum payment, some is extra eBay income, some is from cutting the gym, wireless, cable, eating out, etc and it has all been worth it. I’m 31% of the way there as of 10/31/2014 and I am a little behind my 40% expected projection so far in my back filled goal(bonus, tax, raise, etc in 2015).
|Months||Loan Balance||Principal Paid||% Paid Off|
|July||$ 24,864.56||$ 1,001.70||4%|
|August||$ 21,095.17||$ 3,769.39||18%|
|September||$ 19,679.27||$ 1,415.90||24%|
|October||$ 17,884.95||$ 1,794.32||31%|
You know what I have figured out paying off my student loans so far:
- Interest rate doesn’t matter
- Big Kick A** payments matter
- Goals are important, but a plan of attack to reach the goal is more important
- The best way to pay off debt is to make it personal
So I am less than 6 months away from paying off $46,500 in student loans, 6 months away from paying off the last $25,000, do you think I will make it? What do you think I should do to celebrate? What would you do to celebrate paying off your student loans or any debt you have?
*Mrs. Even Steven Money is a private person, she will probably yell at me a little for even including this, but since this is my student loan debt I will most likely get a pass:)