I 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
I 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.
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?