I would like to start doing regular updates for student loan payments, budgets, and other goals I’m working toward. The slight issue is that I really haven’t been tracking things like my student loans close with graphs or anything; I’m not that fancy (yet). But when I checked my balance this week, I realized I finally left the realm of $5k for one of my loans and felt a little excitement at that! This motivated me to start publicly tracking my two loans.
I have 2 sets of Stafford loans through Great Lakes – two are subsidized while the other two are unsubsidized.
As of today, the balances and interest rates are as follows:
Subsidized: $3,172.55 @ 5.35%
Unsubsidized: $1,772.39 @ 6.55%
Subsidized: $5,005.09 @ 4.25%
Unsubsidized: $6,239.40 @ 6.55%
Grand Total: $16,189.43
Unfortunately, that number is pretty daunting. I’d much rather look at each loan broken down and celebrate the little victories! At least I’m almost to $15k.
My Plan to Pay
For a while, longer than I care to admit, I had been paying the minimum amount on my student loans. I had resigned myself to the fact that that’s what everyone else seemed to be doing, and no one told me differently. It was the first time I actually had to pay money back to someone. I had never been in debt before, so it was unfamiliar territory. I made an even worse mistake, which I’m ashamed to admit, but I didn’t pay during the grace period. I worked on building up my savings instead, as my parents were having their own financial troubles, and I wanted to be ready in case anything happened to us.
Starting at the beginning of this year, though, I vowed to pay extra every single month. I think my minimum payments were around $202 a month, and I’m now contributing $250-300. I am putting more toward loan #1, since it has a lower balance and higher interest rate. I had been reading personal finance blogs for a tiny bit at this time, and reading about everyone else’s success inspired me. I knew I had to part with my money for the better, even though I wasn’t exactly comfortable with it at first. I’m slowly learning to enjoy the numbers going down, but the numbers in my savings account dwindle, too. It’s been difficult for me to realize that paying off debt is essentially increasing my net worth, but I’m getting there!
I think the other half of the problem is that I am not making much right now – being a year and a half out of college, with a semi “useless” degree, I took whatever administrative job I could when I graduated. While I did manage to get a promotion early on at my current job, the pay increase wasn’t amazing. I have definitely been thinking of ways to diversify my income with possible side hustles, which would be really nice. I would use all of that extra money toward my student loans.
History So Far
I started paying my loans back almost a year ago now, on July 25th. My first loan was at a total of $5,849.17 and my second loan was at a total of $12,467.09. That’s a grand total of $18,316.26, for a total of $2,126.83 paid off. I know this is chump change compared to some of those who pay $1,000+ toward their debt a month…and if they can do it, I should find a way to increase my payments as well. I am hoping that by doing these little updates every month, it motivates me to pay extra even more!
I actually accidentally paid my student loans twice last month. It’s kind of amusing (thankfully I have more than enough saved up to cover this, and I don’t mind one bit that it happened), but basically my loans were due around Memorial Day, and because of the holiday I was worried that my autopay wouldn’t go through on time. I’m always paranoid about these things, so I logged on and made a manual payment. A week later, after checking my bank account, I saw that it debited twice. Oops! There goes my first $500 monthly payment! I am not sure if I will make a habit of that for right now, but if/when I get a raise, you can bet the excess will be going toward my student loans. I am able to live comfortably on what I make now, no reason to change that!
What are everyone else’s plans to eliminate their debt? Share it in the comments!
Photo Credit: lazarusfg.com