2017 Round Up

2017 marked the year I finished my final year of high-level education. I promise. I can’t afford to go back anyway. It’s honorary degrees from here on out.

In May I graduated with 12 different loans from 8 years of university. I’m actually not certain the full balance of my loans on that day, because I wasn’t keeping records. I do know it was over $206,600.44 That’s how much owed on Sept 4, 2017 when I first started this blog as a way to keep myself accountable. Between May and Sept, I actually paid off an entire loan! It was only $966, but still.

Since I started this blog I have brought my total owed from $206,600.44 to $202,304.04. That’s a reduction of $4,296.40 in 4 months. That includes paying off 1 entire loan. To achieve that overall reduction in balance I paid $7,695.72.

Overall in 2017, I paid $9,056.44 towards my student loans. Looking at that number I’m shocked. That’s a lot of money. But honestly, I didn’t miss it. Of course, money is tight, but I’m not eating peanut butter and jelly for every meal and I haven’t kept the heat off this winter. I actually even spent two weeks traveling through Cambodia.

I plan to keep up this pay off pace for the next year (hopefully I’ll get a raise and be able to increase my payments) paying at least $16,266.46 and paying off 1 more loan. Fingers crossed.

This blog has been good for accountability and tracking. In the last 4 months, I have gotten a better handle on my loans and feel more in control of my financial future than ever before.

Regrets

A list of things I regret spending money on and wish I had put that money towards my student debt instead.

1. $250 tasting menu for my 25th birthday.
2. A custom fascinator I bought as a souvenir from living in Scotland, but now never wear.
3. Heels from Harrod’s that don’t fit and I mostly don’t wear heels anymore anyway.
4. A monthly t-shirt subscription for an ex-boyfriend. He had too many shirts.
5. A few times I stayed in hotels instead of with trying to find friends or friends of friends to stay with.
6. So many cups of coffee over the years.
7. An almost $100 a month gym membership I rarely used, except post hurricane Sandy.
8. That one last drink at the end of so many nights.
9. Cable for 4 years.
10. Buying a new dress because everyone had seen my old ones, even though I’d only worn them twice or so.
11. Fabric to make Christmas stockings for the Etsy store I never opened.
12. Cabs because it was cold/late/far/trains were slow.
13. The more expensive glass of wine, because it was a “special occasion”.
14. Getting a whole bunch of travel pictures printed then never putting them up, and now realizing they are terrible.
15. So many bad, cheap picture frames.

2018 Payment Strategy

Now that I’ve successfully paid off my second targeted loan, I need a new payment strategy.

What I learned from the first strategy

Previously I was sending all my extra payments to 1 specific targeted loan in order to pay it off quickly. The strategy worked. I paid off the loan very quickly. More on that here.

During this time I was only paying the minimum due on the rest of my loans. The minimum due is less than the interest that accumulates every month. So the balance of each loan was growing a little. That sucks. I don’t want that to happen going forward.

However, the overall outstanding balance to Navient did go down because I was paying more in total towards the targeted loan, than the total interest accumulated across all my loans. Does that make sense?

I know this image is tiny and a bit blurry, but let’s compare. The overall total balance went down. If you look at the individual balance of each loan, you’ll see they each went up. Except for loan 1-10, which was my targeted loan. I paid that loan off just after this screenshot. Sure I got the euphoric feeling of paying off a loan, but I think this strategy will ultimately cost more in the long run.

New Strategy

I want to pay off the total accumulated interest on each loan every month so that the balance of each loan does go up. To figure this out I created this chart (loan numbers from 12.8.17):

I calculated how much interest accrues each day (Daily Interest) and how much accrues over 31 days (I’m using 31 days as a default for a month). My loans accumulate $1.105.91 in interest every month.

The green column is my current monthly required payment for each loan. I subtracted the Req’ Payment from 31 Day Interest to determine how much additional I need to pay towards each loan to pay all the interest every month. That comes to $669.04 additional every month.

Previously I had been paying an additional $1,000 a month on to my targeted loan. Now that it’s paid off I plan on continuing to pay an additional $1,000 a month plus the amount of the targetted loan’s monthly Req’ Payment, which was about $14 a month. For a total additional payment of $1,014 to Navient every month.

The yellow column on the above chart shows me rounding up the total additional amount I aim to pay on to each loan. I rounded up to whole, even numbers, so I don’t have to mess around with decimals, and since I make twice-monthly payments, I want those payments to also be whole dollar amounts.

However, for loan 1-01 con, I have decided not to make monthly additional payments, because the loan balance is the lowest, and the interest rate is the lowest. Though, in my 11.15.17 payment, I made an additional lump sum payment of $37.64 instead of tiny payment over a year. I could afford this because my final payment on loan 1-10 was less than my $500 normal payment.

I also have not evenly spread out the monthly additionally $1,014 across all 10 loans. I’m only rounding up a little for most loans, and putting a larger monthly payment towards loan 1-11. In a way, 1-11 is becoming my targeted loan for 2018.

To Conclude

The new plan for 2018 does two things: 1) Aims to not let interest accumulate on any loan; 2) Targets 1-11 for pay off in 15 months (on 2.15.19), barring any drop in additional payments. And hopefully, I’ll be able to pay more than this. Hopefully.

Fingers crossed.

 

 

Breaking $200k

On Friday I made another extra payment towards my Navient loans. I paid an extra $1,100. I made the payment over the phone and spread it out across 9 of my loans. I had made an extra payment of $36.74 on 11.29.17. Check out the post on my current repayment strategy.

This payment took my outstanding loan balance with Navient below $200k. It’s a joyous feeling.

However, it comes with some caveats. I know the balance will jump back above $200k very soon as interest accumulates. And I think it will dance back and forth across the $200k mark a few times before staying down.

But for now, a small reason to feel like I can do this.