Student Loan Update #6 | Journey to SavingI am way overdue on updating you all on our student loan situation! It’s actually been over a year since I posted about them in any detail. I can’t believe that!

It’s for good reason (mostly), as I haven’t made any substantial progress. I always find it much more fun to look at the updates of those that can put thousands of dollars toward their debt. That’s just not us.

If you’ve seen my monthly budgets, then you’ll know we’ve been chugging along, paying the budgeted amount, and maybe a little more.

Why the lack of focus on our loans?

I mentioned in my affordable dream wedding post that we have a few different priorities right now. Well, back then, a wedding wasn’t one of them! To some extent, it still isn’t, but more on that in a later post.

Both of our cars are getting up there in mileage and years (2001 & 2002), and R has declared that if anything else goes wrong with his car, he is not fixing it. He doesn’t want to put more money into it.

Ultimately, it’s his car and his decision, though I’ve said if the repair is minor (less than $100), he should consider going through with it. Sadly, he’s just had a bad history/experience with this car, and he’s looking forward to getting rid of it.

I’m not at that point with my car, and I’m hoping very much to get a few more years out of it, but there’s no telling what will happen. R’s car is over 100k miles, and mine is creeping up there at 93k. I’m worried that something major will break, costing me thousands, and at that point, I’m not sure it’s worth it.

We both agree that we would feel a lot better if we at least had one super reliable car between the two of us. I’ve also mentioned that we’re not against becoming a one-car household, simply because if I can work from home, there’s no reason we can’t work around that.

In short, this is very much something we’ve been thinking about, and I want to keep some money aside in case we do need to make a new purchase next year.

Student Loan Update #6

Student Loan Update #6 | Journey to SavingI pay our loans around the end of the month, and this time, I decided to do a little poking around. I haven’t in a while, as things have been on auto-pilot. What I really wanted to do was see how much interest was killing us.

As you can see, between us, we have 4 loans at 6.8%. Ouch!

As our payments just went through, I actually noticed R’s balance is sitting at $16,900 now! I always love getting down to the next thousand. It’s a little motivating.

Anyway, I think we all need a refresher from the last time I updated, as many of you weren’t even reading yet!

The two loans at the bottom in purple are actually one loan, it’s just that one is unsubsidized and one is subsidized. I can only pay toward it as a whole, which sucks. R can pay each of his individually as they’re in “groups.”

L1 was part of the same setup, but I paid off the unsubsidized loan portion a few months ago. That loan was also at 6.8%, which is why I chose to go after that set first.

However, I’m rethinking my strategy, and want to target L2&L3. It now has a much higher balance, and I’m paying much more in interest. To give you an idea – I usually pay $80 toward L1, and around $9 goes toward interest. That $136 I pay toward L2&L3? Around $47 in interest.

Because I paid so much extra toward L1 when I was originally going after it, I’m paid ahead by a few years. I was thinking of ignoring it, and paying the full $220 toward L2&L3.

Confession time

Now, I realize that letting the interest accrue is not ideal (and I’ll probably pay something toward it to cover it). This whole situation really isn’t ideal.

To tell you the truth, I haven’t been posting updates on my student loans because I’ve been paying the minimum, and I sort of feel ashamed about it.

When I made the decision to try freelancing, I went into “ultimate saving mode.” Every dollar spent counted more than usual, as I wasn’t bringing in much to start. We’ve mostly been living off of R’s income and our savings.

Again, not ideal, but I made this decision and I knew what would come with it, so I don’t want to complain. I realize we are very fortunate that we had the foresight to save so much, and that I don’t have to worry about income for a bit.

Thankfully, things are finally starting to look up, and I am hoping by next year, we can ramp up payments. November and December look like they’re going to be a little too expensive to start right away.

However… being that I saved so diligently anticipating our move, and being that we haven’t had to dip into our savings as much as I thought, I am very much considering plopping at least $2,000 down toward the loans.

Originally, I was going to use this toward my loans, as the bulk of our savings came from my bank account. But I gave up that entitlement when we got a joint account.

Now that R and I are engaged, I feel like we need to be in this together. We had briefly discussed that we would probably continue to pay our loans separately even when we got engaged, but since we’ve merged bank accounts, that doesn’t feel right to me.

Plus, wiping out one of those pesky 6.8% loans R has would be nice. We have just over $28k in student loans together, and that number is unnerving. It was a lot easier to stomach my $11k balance alone, but I think those days are gone.

What do you think we should do? How do you approach student loan debt in your relationship? 

 

67 Comments

  1. Liz October 30, 2014 at 10:59 AM

    Aren’t student loans fun? It sounds like you are playing it smart. I think paying the minimum is fine since you were just starting out with freelancing and are growing your business. I’d say that whatever you do, don’t stretch yourself too thin with extra debt payments and be short on money at the end of the month. It isn’t worth the stress and risk of over-drafting. When we find ourselves with a little “extra” in savings, we like to put a little extra towards our student loans. It’s so nice to actually see the balance move a little bit!

    Reply
    1. Erin M. October 30, 2014 at 12:42 PM

      Oh yes, so much fun! =) We have a large savings buffer in place right now simply because of our work situation (with freelancing), so there’s no worry of being short. We could actually afford to pay a little extra, but playing it safe has been the name of the game this year. Back when I was working my FT job, I paid extra throughout the month, and it was really nice to see the progress!

      Reply
  2. Sarah October 30, 2014 at 11:49 AM

    Great post, Erin!! Aww – don’t be ashamed at making the minimum payments – at least you’re making them! I think all of us PF bloggers feel guilty about at least one financial thing!! (We bought a 2013 almost brand-new SUV in Feb and have a 6 YEAR loan on it…payment is $336 a month…that’s something I don’t really mention on the blog lol.)

    I think you have the right idea in viewing the debt as both you and R’s debt. When my husband and I got engaged and combined everything, I had a car loan and he had a student loan (both were about $15K each). We viewed it as “ours” for sure. Like you guys, we also lived off of his income for the most part. I was freelancing, but our goal was and still is to save all the money I make. This doesn’t happen every month, and in fact when we moved I actually paid the majority of the bills. We’re hoping to get back into the system of saving my money and using his for bills and living. I like that system, haha!

    Hope you are having a great day!!

    Reply
    1. Erin M. October 30, 2014 at 12:40 PM

      Thanks Sarah! I think it’s easy to get too caught up in the progress of others. All of us have made mistakes, and we’re either paying for it, or have paid for it! I’m really nervous about possibly having to buy a car, as I’d rather not have a car payment, but that’s a whole other can of worms.

      That system sounds great – living off of one income is awesome. I would love to be able to get to that point soon! It would be a lot more doable without our loans!

      Reply
  3. Kate@GoodnightDebt October 30, 2014 at 12:32 PM

    I wouldn’t worry about only paying the minimum right now. It sounds like you are setting yourself up for the long term. Be patient. Throwing extra at your loans will come.

    I would view them as joint loans and put any extra toward what helps overall. No need to complicate things now with whose loan is it. Stack them however makes most sense financially for you both and then focus any extra money one just one loan until it’s gone.

    Are you on direct debit? That could help with the interest rate a little.

    If this were my situation, I’d target any extra at R’s smallest 6.8% loan until those are all gone, then switch to your grouped loan. With an extra push, R’s little loans will be gone in no time.

    Reply
    1. Erin M. October 30, 2014 at 12:37 PM

      Thanks for the input, Kate! It’s so hard not to be impatient as this is the only debt we have, and I just want it gone. But I know that next year should see a lot more progress (at least, I hope!).

      I’m in agreement with the rest of your comment, though R is leaning toward paying off my tiny loan first. I guess I’m more prone to taking the avalanche approach, whereas he enjoys the snowball. =)

      Reply
  4. Tara @ Streets Ahead Living October 30, 2014 at 12:57 PM

    Outside of my high balance high interest loan, I always paid the minimum on all of my loans and there’s nothing to be ashamed of in doing so. Plus, the only reason we’re able to pay so much towards MY loans is because my husband is making a good deal of money (he’s contract though) and we can sock it towards the high interest loans, plus we live cheaply.

    I did want to say though, don’t say 100k miles is high! My car has 180,000 miles and it’s a 2002! If I were your fiancee, I would reconsider the spending costs on the car too. I understand that we sometimes get in this mindset that we’re of the age where we “deserve” a better car and I can totally attest to that feeling. My car is not in great shape but it still works and I’m of the mindset of driving it into the ground. I’m going to probably be spending some money on 4 new tires and brakes before this winter season hits since it’s the safe thing to do and the car is still going strong. Unless his car is a total lemon, he should definitely try keeping it. If I were you, I’d search Google for “common mechanical issues for YEAR MAKE MODEL” cars and see if his and your cars comes up as a lemon. Then he can determine if it’s worth keeping or if it is better to try for a different car. (My car is a 2002 Toyota Corolla fyi, and those year model Corollas last forever)

    Reply
    1. Erin M. October 30, 2014 at 3:23 PM

      I have to admit, it was nice back when R was receiving bonuses every month. Some were better than others, but he always put it toward his student loans, and it really helped!

      I don’t think 100k is high necessarily, I’m just more worried that that is when bigger (more expensive) issues start cropping up. I’ve always been committed to staying with my car as long as it makes sense to do so, but it’s had us worried lately. Hopefully it’s nothing big, as I would much rather not have to buy another!

      My aunt is a huge fan of Toyota. I have a Honda and R has a Hyundai Elantra. Honda’s are pretty much known for their reliability, but R’s car had problems within months of buying it. Unfortunately, it was what he could afford at the time, so it wasn’t a surprise it’s been so finicky. My mom has a 2003 Elantra and it’s been fine, though.

      Reply
  5. Brooke October 30, 2014 at 1:32 PM

    If you do have a large savings buffer, it might be great motivation to knock out one of the loans!

    Which one of the loans if you paid it off would lower your monthly payment? For instance, we paid off K’s higher interest loan at 6.81% but since it was bundled with a subsidized loan at 3.15%, the payment amount hasn’t changed. Even though it is a low interest rate, it is our next target because it is the only loan that isn’t bundled in with the rest. Our philosophy is a modified snowball — mostly target the higher interest loans but eliminate smaller loans when the balance gets lowish AND if there is a big enough impact on cash flow as to justify paying a little bit more interest that we would if we had just targeted the highest-interest loan.

    Reply
    1. Erin M. October 30, 2014 at 3:18 PM

      Isn’t it annoying when they’re bundled? I’m so jealous R can target his loans one by one, and I can’t! That’s another reason why I’m thinking it’s best to pay extra toward his and not mine. I like the hybrid approach you’re taking. That’s kind of what R has been doing, as he paid off his other 2 loans. We’ll have to do some more math on the numbers!

      Reply
  6. Melanie @ Dear Debt October 30, 2014 at 2:08 PM

    Girl, I hate those 6.8% interest loans — I also have some at 7.9%! Ugh. For a long time I had a lot in savings and decided to deplete it to pay off loans. That is what felt right for me at that time. I am now trying to balance saving and paying off debt as a freelancer. It’s tough, but you have to do what makes you sleep best at night. My opinion is to get rid of higher interest debt first, and maybe go to a one-car household in the future. Just keep on making payments. Consistency is key!

    Reply
    1. Erin M. October 30, 2014 at 3:16 PM

      Oh sheesh, 7.9% is ridiculous. :/ I’ll probably feel a little more confident about putting even more savings toward debt so long as our cars hold out. If we do decide to go with one car, it will probably be early next year, as they’re due for inspection in April. It’s kind of silly to pay $52 for insurance every month for R, but thankfully that’s all it costing us (for now).

      Reply
  7. Syed October 30, 2014 at 3:03 PM

    Nothing wrong with making minimum payments for a little while. There are plenty of people out there that don’t even do that. But I do have to say getting a student loan balance to 0 is one of the best feelings in the world. I won’t have that for a while since I’m working on the biggest balance loan I have at the moment, but just looking forward to that feeling is worth it. We’ll get there!

    Reply
    1. Erin M. October 30, 2014 at 3:13 PM

      That’s true, Syed. I guess I feel a little extra pressure as my student loans are what motivated me to start this blog! We will definitely get there, even if it takes a bit longer than we expected.

      Reply
  8. Natalie @ Financegirl October 30, 2014 at 5:28 PM

    I absolutely love reading other people’s student loan stories and journeys. As part of that, I always have to remember my priorities are different than other people’s priorities! Personally, I’m trying to pay off $157k (started at $206k) in under 5 years – that’s pretty crazy to a lot of people! But I don’t have competing goals / priorities right now. In fact, I’m pretty much locked into my day job or need to make more until I pay off all my debt. I’m not sure what you should do, but I will say that I live by the motto “do with your money that which makes you feel powerful.” I hope that helps! Oh, and p.s. – I also love getting down to the next thousand :)

    Reply
    1. Erin M. October 30, 2014 at 10:20 PM

      Your dedication to paying off your student loans is admirable, Natalie! Your attitude toward them is great as well. $28k is paltry compared to $157k (let alone $206k!), but yep, it’s all relative, and our priorities are all different! That’s why I also love reading other blogs. It’s interesting to see different stances taken.

      Reply
  9. Katelyn @ Diaries of a Wandering Lobster October 30, 2014 at 8:04 PM

    Student loans suck! But 28k between the two of you isn’t bad! I graduated with a total debt load (both undergrad and grad school) of $44k. I’m now under $30k. It takes time (and it sucks!). I had an old car up til March when it died. In the past 2 years I had put in over $3k of work into and when it died in March I was done with it. Not worth the investment. If you think you can get more life out of it, I say go for the repair!

    Reply
    1. Erin M. October 30, 2014 at 10:14 PM

      I know, I know, compared to most people, we got off pretty easy! Well, R’s original balance was probably somewhere around $28k alone, and mine was around $18k I think. The problem is, the progress seems so slow when you’re actually living it. I think we need to take a look at how far we’ve come in the past 2 years.

      Oof, $3k in repairs is a lot! Can’t blame you there. Last I looked, my car was worth about $3.5k, and R would be lucky if he could get $500 for his, so we’re taking that into consideration as well.

      Reply
  10. Tre October 30, 2014 at 9:56 PM

    I’ve just recently started putting a lot of money towards paying off my student loans. I wish we had done it sooner, but we didn’t have as much income then :-) Everyone’s financial situation is different and you need to find the repayment schedule that works for both of you.

    Reply
    1. Erin M. October 30, 2014 at 10:12 PM

      “I wish we had done it sooner, but we didn’t have as much income then.” That’s half the problem for us, too. I would love it if we could live on one income, but thankfully freelancing has gone decently and we’re at least covering our expenses now. I hope we’re making a little more next year! At least you’re making a lot of progress now. =)

      Reply
  11. kay ~ frugalvoices.com October 31, 2014 at 4:39 AM

    It sounds like you have a well thought out plan. I know when we got married, we did not. I wish you all the best, Erin. :)

    Reply
    1. Erin M. October 31, 2014 at 4:27 PM

      Thanks Kay! We can try to plan, but of course we never know what life has in store for us.

      Reply
  12. Holly@ClubThrifty October 31, 2014 at 6:51 AM

    I think it makes sense to tackle your loans together if you’re engaged. After all, your debts will belong to both of you once you get married. Might as well become a “team” now! =)

    Reply
    1. Erin M. October 31, 2014 at 4:26 PM

      It really does make sense. I think in the past, R felt a little guilty, being that his student loans were so much more than mine. But I think he has paid more off than I have, and I don’t mind. While seeing our joint number is a bit more anxiety inducing, I feel better knowing we’re in it together.

      Reply
  13. Kassandra October 31, 2014 at 6:56 AM

    I can relate to having debt but student loans was not part of my issue so I’ve never had to deal with that particular beast. It’s important to stabilize your living/financial situation before really tackling the debt so by temporarily paying the minimum but working on gaining surplus income is a good strategy.
    I know you and R think about things very carefully so whatever you decide will make sense and deliver a positive impact on your debt.

    Reply
    1. Erin M. October 31, 2014 at 4:25 PM

      Thanks for the vote of confidence, Kassandra! I have no doubt we’ll get there eventually, I just happen to be very impatient. =) This year has been a rollercoaster with the move and me making the switch to self-employment, and I guess I thought I would have figured everything out sooner. I have to remind myself of how far we’ve come in other aspects of life, not just debt!

      Reply
  14. Ms. Mintly October 31, 2014 at 10:51 AM

    Oh, man – achieving balance is what it’s all about!

    I agree with you on all the points you made – sometimes you simply have to make minimum payments, even if you know your interest rate is not good (really, no interest rate is good unless it’s working in our favor – ha!).

    Like you, I keep having to look forward and remind myself that even if we’re not getting rid of the debt as quickly as we’d like, we’re making progress and sometimes other goals are more important. Just keeping in mind that things are always changing (so the balance always looks a bit different) from year to year helps, but it also makes me aware that paying off debt is a YEARS-long process (which can be disheartening).

    I think combining finances including debt is not just important emotionally when you get married, it’s also just practical. I mean, you could spend the time categorizing one person’s paycheck as paying for his loans and then splitting your living costs between the two of you, but that’s just a hassle in the end, when you’re really a team working together to create a great life for the both of you.

    Always enjoy your posts, Erin. :)

    Reply
    1. Erin M. October 31, 2014 at 4:23 PM

      Thanks for the comment, Ms. Mintly (and the compliment)! I think I tend to get a little caught up in the progress others are making. There’s all of these amazingly inspirational stories out there of paying back more debt than we have in 2 years or less, and I wish we could do that. It’s half our own fault; while we don’t make a bunch, we’re also not willing to drive ourselves crazy trying to earn more. So we’ll have to settle for this.

      That’s very true. We used to pay our loans out of our separate bank accounts, but now it’s all coming out of the same place. There’s no reason to look at it as “his” and “mine”, even if they’re two separate accounts!

      Reply
  15. Andrew@LivingRichCheaply October 31, 2014 at 10:55 AM

    I have student loans but fortunately they are super low interest rates. Some around 4% and some even as low as 2%. So I’m not in a big rush to pay them off. It makes sense to tackle the debt as a couple now that you’re planning on getting married. We took a chunk of our savings to pay off all of my wife’s student loan as they were 6.8%.

    Reply
    1. Erin M. October 31, 2014 at 4:20 PM

      So jealous! I wish our interest rates were that low. I do think we’ll end up putting the $2k (or whatever we can manage) toward his 6.8% loans. It’s what makes the most sense!

      Reply
  16. Kayla @ Shoeaholicnomore October 31, 2014 at 11:35 AM

    I think I would continue paying the minimums on all the loans (yours and his) but pay extra toward one of his 6.8% loans. If you are already engaged and have (mostly?) joint finances, it would make the most sense to pay all extra toward the highest interest rate loan. Just my two cents :)

    Reply
    1. Erin M. October 31, 2014 at 4:19 PM

      Agreed! We’re planning on having a more in-depth talk about our plans for our loans. For some reason he wants to focus on my 6.8% loan, but since it’s “bundled,” I don’t think it will be as useful.

      Reply
  17. Jessica October 31, 2014 at 6:28 PM

    I think it’s a great idea that you and R combined your debt. Marriage is a collaborative effort and since you guys are officially engaged then starting early doesn’t hurt one bit. Don’t feel bad about only paying the minimums I’m sure you’ll eventually hit a point where you can put more towards your loans. Plus, it’s only a matter of time before your freelance earning start to increase.

    Reply
    1. Erin M. October 31, 2014 at 7:41 PM

      Thanks Jess! I have definitely seen an uptick in freelance income since I started, I just have to work toward getting more clients and work and I’ll be able to make more payments. It’s always good to have the motivation!

      Reply
  18. Autumn @ The Barefoot Budgeter October 31, 2014 at 6:38 PM

    I’m kind of in the same boat – I’m in super savings mode and feel guilty that the student loan debt is still hanging around. Every month I’m tempted to take what I’m putting in savings and throw it at our student loans instead. I’m paying a little more than the minimum and I know once we’re settled we can go crazy with the payments, but it’s hard to be patient. So I don’t know what the answer is, but I can most definitely relate. :)

    Reply
    1. Erin M. October 31, 2014 at 7:37 PM

      It does sound like we are on the same page! I think it’s smart that you’re saving, though, and I would as well. Patience is NOT one of my strong suits!

      Reply
  19. Jason @ Islands of Investing October 31, 2014 at 7:07 PM

    Sounds like you’ve been making great progress in other areas of your life Erin, so to keep making your minimum payments is a great thing! After 9 years of work, I finally paid off my student debt, but it wasn’t a huge amount, and each year I had a pay rise, they automatically took a bigger proportion out of my salary. Was so much easier having things on autopilot, meant I didn’t really think about it often, and when it was finally paid off, it was getting a nice little pay rise! Maybe adopting a similar strategy of adding to your repayments as income increases could work for you?

    Reply
    1. Erin M. October 31, 2014 at 7:23 PM

      That’s awesome you paid your loans off, Jason! We do put any additional raises/income toward our student loans. When R used to have monthly bonuses, most of the amount would go toward his loans. I’m hoping to reach a consistent amount with my freelancing to feel comfortable adding on to the minimum payments next year.

      Reply
  20. DC @ Young Adult Money October 31, 2014 at 11:37 PM

    I think it’s most important that you are on the same page. We are currently paying the minimum on our loans and we are pretty comfortable with that. We will probably review them sometime within the next couple years and might put more towards them, but right now we are focused on saving money, getting $ in our retirement accounts, and slowly investing in our house.

    Reply
    1. Erin M. November 2, 2014 at 10:19 PM

      It really kills me that I’m not focused on getting money in my retirement account! That’s been on my mind as well. I invested an initial amount earlier this year, but I’d like to contribute more to it. R and I did agree to scale back and pay the minimum so we could put more toward our car fund, but I think we’ve reached a decent point with that.

      Reply
  21. How To Save Money November 1, 2014 at 8:50 AM

    It’s great that you face your debt as a couple! Way to go to you guys!

    Reply
    1. Erin M. November 2, 2014 at 10:17 PM

      Thanks – we’ve always been in the battle together regardless, since student loan debt is the only debt either of us have, and we both strongly dislike it!

      Reply
  22. Tennille November 1, 2014 at 10:54 AM

    Personally I think since you have merged your bank accounts your bills should also merge. I wouldn’t worry so much about what loan comes first but instead start with the lowest one and get that out of the way and pay minimum payments on everything else.

    As the debts begin to fall off you’ll feel the wiggle room in your budget start and for me at lease that was very motivating. So I would think that it could/would be motivating for you two as well.

    Reply
    1. Erin M. November 2, 2014 at 10:16 PM

      For the most part, the rest of our bills are “our” bills – we pay everything together since it comes out of the same account! Through all of these comments, I’m seeing the sense in thinking of our loans as one big loan together, instead of all these separate accounts.

      I can see how that would be motivating!

      Reply
  23. Melissa @ Sunburnt Saver November 1, 2014 at 10:56 AM

    Hey, we’re in the 6.8% club together! I think I have two student loans that are 6.8% interest. I HATE it. I think it’s ridiculous the government gets to make money off my hard work (brains) AND I have to pay income, sales, state, local taxes… but that’s not the point of this post, I know. ;)

    I’m really impressed that you cover your student loan debt here. I am totally ‘ashamed’ of my debt (quotes because I’m not ashamed I educated myself, but it seems to be a shameful thing to have in the PF community, or maybe that’s my perception) and therefore haven’t covered it yet. I don’t want to be labeled ‘irresponsible’ for buying things when I ‘should’ be paying down debt. So MAJOR props to you for having the chutzpah to cover it, unashamedly! You’re inspiring to lots of people (like me!) who have student loan debt and feel bad about paying the minimum too.

    Reply
    1. Erin M. November 2, 2014 at 10:12 PM

      It is sad that the 6.8% club could be a thing … I absolutely hate interest with a passion.

      I don’t think student loan debt is a shameful thing to have in the PF community! There are quite a few of us paying off our loans, and still more who have paid them off (but blogged about it along the way). I don’t think I’ve seen anyone actively shun those who find themselves paying for their education after the fact.

      The last part is true, though. I am acutely aware of the fact I have student loan debt whenever I want to buy something that isn’t a necessity. I do weigh the purchase against money that could be going to student loans/savings, so I try to be as irresponsible as possible.

      Reply
  24. Natalie @ Budget and the Bees November 1, 2014 at 1:07 PM

    I know this is easier said than done, but don’t feel ashamed. It would be one thing if you were being reckless and irresponsible, blowing boat loads of money going out and living it up. But you’re not. You’re thinking through your options and carefully weighing them. Just because it’s not in the cards to pay down the students loans right now, it doesn’t mean you’re ignoring them or doing the wrong thing.

    Reply
    1. Erin M. November 2, 2014 at 10:08 PM

      Thanks Natalie! It’s silly to say, but in a way, I do feel like there’s a bit of pressure to make more progress as I document it all here. I started my blog with the intention of getting out of student loan debt sooner rather than later, though I couldn’t foresee all of these life changes happening!

      Reply
  25. Alicia November 1, 2014 at 7:11 PM

    No need to confess. You are actively paying your minimums, and doing so on an unsteady income at the moment. That should be commended. Sure it’s hard switching gears from gung-ho, especially when so many PF bloggers actively document their debt crushing, but you’re doing all the right things :)

    As for the freed up money, it would be nice to clear a full loan off with it. So I say one of R’s loans. :)

    Reply
    1. Erin M. November 2, 2014 at 10:07 PM

      Thanks, Alicia. The unsteady income is certainly impacting my ability to pay more, which is why I’m glad we have our savings, but I wish I could join everyone else in making bigger strides!

      That is what I’m leaning toward as well. I really wish my 6.8% loan wasn’t grouped with another, but since it is, R’s loans make the most sense to target.

      Reply
  26. Rob @ MoneyNomad.com November 2, 2014 at 11:58 AM

    Congrats on getting engaged and on slowly digging away at those loans!

    I certainly agree that knocking out those 6.8% loans right away is a good idea. I would definitely make that I high priority.

    I wonder if there is any company out there that refinances student / personal loans at a more reasonable interest rate. Probably not – the risk is to high.

    Regardless, I enjoy your updates and keep up the great work!

    Reply
    1. Erin M. November 2, 2014 at 10:03 PM

      Thanks Rob! There are actually several companies and banks out there willing to consolidate/refinance student loans. I’m not sure it’s the best option for us yet, but I have been looking into it.

      Reply
  27. Myles Money November 2, 2014 at 4:59 PM

    You can’t beat yourself up about not making the progress you would like to with the student loans, Erin. You’re on top of it, but other things have taken priority… that happens. But it’s not like you’re ignoring them, is it? You’re dealing with the debts responsibly and as your freelance income starts to increase you will be able to pay off those 6.8% loans and bring things more under control. For what it’s worth, I think you’re doing great!

    Reply
    1. Erin M. November 2, 2014 at 10:02 PM

      Thanks, Myles. It could be worse, that’s for sure. I originally thought we would have picked up steam by now, and since we haven’t, it’s a little disheartening. Again, it was my choice to start freelancing, so I can’t really complain!

      Reply
  28. Untemplater November 3, 2014 at 1:41 AM

    There’s no right or wrong answer as every couple is different. There are benefits to doing some things jointly and other separately when it comes to finances and paying down debt in my opinion though. It’s good to feel united while also having independence.

    Reply
    1. Erin M. November 5, 2014 at 1:45 AM

      I agree that there’s no right or wrong answer – I completely respect couples that manage their finances separately, or have a hybrid of joint and separate. You have to do what works for you! We’ve always functioned as a team, though, and we both want our student loan debt gone, so it makes sense to be in it together.

      Reply
  29. Amos November 3, 2014 at 3:32 AM

    I think merging your bills is a great idea. It makes it easy for both of you to a central point of evaluating and paying your loans
    I like the Idea of paying a minimum, that absolutely makes sure that you keep other goals as a more priority.
    I am sure you can have an investment that can enable you pay off the loan even with much less effort.

    Reply
    1. Erin M. November 5, 2014 at 1:43 AM

      Yes, the point of paying the minimum was to be able to save more for other things! But I think we’ve reached a good point with our savings goals, so hopefully we’ll be able to pay more toward the loans now.

      Reply
    1. Erin M. November 5, 2014 at 1:40 AM

      Agreed! We originally wanted to be completely debt free before getting married, but we’ll have to settle for a little less.

      Reply
  30. Done by Forty November 4, 2014 at 9:55 AM

    Hi Erin! For what it’s worth, the missus and I started using joint finances (and joint debt payoff…er, her money helping to pay off my debts…) very early in our relationship.

    We also made the transition to a single car household and the savings are awesome: fewer repairs, less insurance, more carpooling, possibly less gas (depending on which car you keep). I highly endorse it, as I work from home too. It proved to be easier than we thought it’d be.

    Reply
    1. Erin M. November 5, 2014 at 1:39 AM

      That’s great to hear! My goal was to transition to being a one car household once I was sure freelancing was steady. I didn’t want to sell one car and then end up needing it for work! For now, R has primarily been using my car to get to work, and being that I’m a homebody, I don’t mind not being able to run out for things until he gets home.

      Reply
  31. anna November 4, 2014 at 3:36 PM

    For what it’s worth, I think you are way more responsible than most people even my age (maybe even me!), so no need to feel ashamed. You had a great plan when stepping into the freelancing world, and I think your approach made a lot of sense and was very thoughtful. I was the only one with any sort of debt in our relationship, but I do agree with some that it would make sense in your situation to tackle it together what with the merged accounts, engagement, and just being more of a team in general. I also agree with tackling the higher interest rates one, as well – $47 in just interest is no bueno. Keep us posted on what you decide – these loans will be gone way faster than what ‘normally’ occurs with others, so see the positive light in that on how financially responsible you are. :)

    Reply
    1. Erin M. November 5, 2014 at 1:33 AM

      Thanks for the compliment, Anna! It’s hard to feel that way with so many other bloggers making headway on their loans, but I have to stop comparing. I really hate that so much of my payment is going toward interest, but R’s is probably worse overall since he has a higher balance. Ick. We’ll likely be targeting his and hopefully paying all of the 6.8% loans off next year!

      Reply
  32. Laurie @thefrugalfarmer November 4, 2014 at 4:55 PM

    You guys are committed to spending your lives together, time to tackled those loans together. I’d take the extra you have available to put toward the loans and split it right down the middle, with half of the extra going toward R’s loans and the other half of the extra going toward your loans. That way there’s no way one of you might be feeling like you’re getting the short end of the stick, you know? Keep on moving along, my friend: those loans will be gone in no time. :-)

    Reply
    1. Erin M. November 5, 2014 at 1:32 AM

      Thanks for the encouragement, Laurie. I actually wouldn’t mind focusing on R’s loans and paying the minimum on mine right now. As long as we’re able to pay one of them off, I’ll be happy!

      Reply
  33. The Roamer November 10, 2014 at 6:33 PM

    I think its great that you are analyzing your finances. There have been a lot of kudos thrown around but I have to say the general tone I’m getting is it really isn’t a priority.

    The reason I’m getting this feeling is because you are saying stuff like ” you hate paying interest,but you are not willing to drive yourself crazy to earn more ” ( I’m confused those seem contradictory) I have to ask why not? If you can why wouldn’t you work like crazy to pay it all off?
    Plus the interest. How much do you spend a year just on interest?

    I really want to say send me your numbers please! I want to see if it really is as you make it sound. You are making it sound like its out of your hands. I have a work sheet I developed to run multiple scenarios
    I would love to help you out.

    The thing about life changes is they are always going to exist. So saying you’ll pay more in the future won’t help. Like you said you can’t bank on that. Its best for it to be an awesome surprise. If I were you I’d calculate how long it would take at your current rate. I would use the 2k to pay off RL6.

    I really hope to hear back from you

    Reply

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