I’m well overdue for providing a Student Loan Debt and Savings Update. June 2020 is here and I think we can all agree that this isn’t how we expected the middle of 2020 to be going. However, I am thankful to be still here, healthy and well. This is actually my first debt payoff update since August 2019. I stopped posting about paying off debt in August because there was a shift in my financial goals. I shifted to saving more money with the goal of saving up a 6 month emergency fund and that’s just what I did.
Read: August Debt Payoff
There is a certain money expert that believes that you should pay off all of your debt (besides mortgage) before saving your 3 to 6 months emergency fund. However, personal finance is personal because everyone’s financial situation is different. Therefore, I decided to up my emergency fund to be able to cover 6 months of living expenses in the middle of my debt free journey and I don’t regret it.
Back to Paying off Debt
Fast forward to January 2020, I resumed my journey of paying off my student loan debt. On my statement dated January 7, 2020 – my balance was $34,814.46. January I paid a total of $779.31 and $1,579.31 in February. Then March arrived and that is when the world changed as we know it due to the current pandemic that we are in. March’s payment was much smaller because we spent more more on groceries due to stocking up. I also did my first round of Whole30 so March was an expensive month especially in the food category. However, in March I did pay $429.31 towards my student loans. March is also when the CARES Act was signed and part of it allowed for federal student loan interest to stop accruing and also for payments to be waived. Halleluiah! Therefore, no payments are due for 6 months due to the pandemic. (Through September 30, 2020) April I paid $1,203.17 on my student loans and then $960.00 in May.
At the end of May, my student loan balance reached $29,950! Meaning I was finally out of the $30,000 range and it felt so darn good to see that number! I remember owing about $64,000. As of today (June 26th) my balance still remains $29,950 and that is by design.
June: None – Instead – Pivot to Savings $1,229.31 Saved.
Total Paid Towards Student Loans YTD: $4,951.10
As I stated above, Due to the CARES Act, Student Loan payments are paused and interest isn’t accruing on my student loans because all of my loans are federal student loans. There are no payments required for 6 months and I don’t have to make payments through September 30, 2020. The interest rate on my student loans is currently at 0% and that started on March 13, 2020 and will remain in effect through September 30, 2020.
Pivot to Savings
Starting this month and lasting through the end of September, I will save all money that would typically be paid on my student loans. For example, for the month of June, I saved $1,229.31. $229.31 is my required minimum payment and $1,000.00 would be the additional payment. I am choosing to save the money instead of making the payments because there is just so much unknown with employment, wellbeing/health and the world due to this pandemic that I feel more comfortable saving the money for now. Approximately September 25th, I will schedule a snowball payment on my student loans so that payment is applied and credited to my account before September 30, 2020.
Sugar and Money Moments
I always like to mention a Sugar Moment and a Money Moment because this blog is all about living a sweet life while having sweet finances.
The first part of the year started with several sugar moments including a girls ski trip in West Virginia, attending Oprah’s 2020 Vision Tour. However, the most special moments was celebrating Lauren’s 4th birthday and Lauren’s performance in her school’s Black History Month Program. All of these events took place in January and February.
The biggest money moment for us has been saving on daycare fees since school is closed. That is saving us $600 a month and that money is being split between our saving account and paying off my husband’s truck. We’ve also saved money in the areas of dining out, travel and clothing due being home so much more.
Worth the Read: Stimulus Checks: Here’s 12 Ways to Spend It
That sums up the first 6 months of my year with my debt payoff journey. If you are on a financial journey, how has the first 6 months of the year treated you? What are you most excited about for the last 6 months of the year?