Sugar and Money
Sweet Life, Sweet Finances

Eight Student Loan Lessons

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Eight Student Loan Lessons

Going to college, I didn’t plan to leave with a lesson in student loans.

I often think of the things that I would do differently if I did the whole college and student loan thing over. Since I can’t turn back the hands of time – I choose to change those regrets into lessons. In my opinion, expensive lessons but they are lessons nonetheless.

“Lesson – Something learned by study or experience” – Miriam Webster Dictionary

Going to college wasn’t free for me and honestly it wasn’t something that myself or my family financially prepared for. However, I still decided to go to college after graduating high school – everyone I knew seemed to either go away to college or enlisted in the military. Both of my brothers and two of my cousins enlisted in the Marines when they graduated high school but I selected the college route. I decided to go to a two year technical college first and figured, I would figure out the rest out later. When enrolling in college, I soon realized that college was expensive and I didn’t have enough money to cash flow college. Therefore, I was directed to the financial aid office for a solution to pay for my classes. The answer was, 18-year-old Jackie, signing on the dotted line for student loans.

However, one thing I did know was that by receiving loans, I would have to pay them back. At 18, I may have not been well educated in student loan debt but I knew that taking out a loan was a debt and therefore that debt would have to be paid back.

“Debt – something, typically money – that is owed or due”

This is my story of lessons learned while getting a handle on my federal student loan debt and learning how student loans payments are applied. All of my loans were either direct subsidized or direct unsubsidized student loans.

A couple of terms to know:

What is a Federal Student Loan?  A federal student loan is a student loan funded by the federal government.

There are two types of federal loans: Direct Subsidized and Direct Unsubsidized.

What are Direct Subsidized Loans?

  • Direct Subsidized Loans are available to undergraduate students with financial need.
  • Your school determines the amount that can be borrowed, and the amount may not exceed the student’s financial need.
  • The U.S. Department of Education pays the interest on a Direct Subsidized Loan
    • while you’re in school at least half-time,
    • for the first six months after you leave school (referred to as a grace period), and
    • during a period of deferment (a postponement of loan payments).

What are Direct Unsubsidized Loans?

  • Direct Unsubsidized Loans are available to undergraduate and graduate students; there is no requirement to demonstrate financial need.
  • Your school determines the amount you can borrow based on your cost of attendance and other financial aid you receive.
  • You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods. Meaning interest is accruing on those student loans from the time the loan is taken out until it is paid off.
  • If you choose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan).
Explanation of terms provided by Federal Student Aid.

What is interest or interest rate on my loan? Student Loan interest is the most expensive thing ever! Ok seriously, student loan interest is how much the borrower pays to the lender for the loan. On my student loans, the interest is charged daily! Yes, EVERY DAY!

Now that we have covered part of my backstory and a few definitions are out of the way, let’s dive into the eight lessons learned.

Lessons Learned

Lesson #1: Taking out more student loans than I needed. Plain and Simple right?

When I was in college and I was awarded a student loan, the college would take the tuition out of the loan and send me a check for the remaining amount. I distinctly remember reading that I could return the money to the college if I didn’t want it. However, how many 18 year olds do that? I know this one didn’t. I can even remember what I bought with my first refund check – a Sony Vaio desktop computer from Circuit City during a Black Friday sale. (I know I am aging myself with that example but its what I bought) Therefore, the refund check wasn’t totally blown on non-related college items but I can assure you all the refund checks that I received weren’t for college related expenses or even necessities – so my first lesson with student loans was taking out more student loan debt than  I actually needed.

Suggested fix: Return any excess money to the student loan company via your college or by making an immediate payment on your student loans in the amount of the overpayment.

Lesson #2: Not making payment on my student loans while enrolled in college. This lesson is pretty cut and dry. I took the student loans out but since I wasn’t receiving a true bill in school, I didn’t worry about paying on my loans during that time. I did receive statements in the mail, showing a balance but since I was still enrolled in college the statement would read that nothing was due.

Suggested fix: Treat those statements as a bill that is currently due and make a payment on student loans while still in college if possible.

Lesson #3: Not paying on student loans while not enrolled in school. To piggy back on Lesson 2, I also didn’t pay on my student loans during the 6 month grace period post college or periods of not being enrolled in college.

Suggested fix: Make payments on student loans during the grace period or periods of not being enrolled in college.

Lesson #4: Electing forbearance or deferment when I didn’t need to. Post graduation, for approximately two years, I elected forbearance or deferment because honestly the income wasn’t there to pay the bill. However, the fix would have been to make more money even if it was a second job to cover the bill.

Suggested fix: Earn more income to pay my student loan bill. Don’t allow forbearance or deferment to be an option.

Lesson #5: Electing the Income Based Repayment (IBR) plan and staying on the IBR plan for 2 years. This had to be one of the most costly lessons during this whole student loan process. I applied for the Income Based Repayment plan because my income qualified for it based on the amount of debt I had at the time. The payment was manageable and I paid it on time, however, it took me over a year to realize that the balance on my loans wasn’t even going down. Imagine how mad I was when I found that out. In this situation – the payment wasn’t covering the interest that was accruing daily/monthly. My loans was accruing $10/day in interest which would total $310/month in just interest and I was paying around $200 a month. So every month my balance was increasing versus decreasing even though I was paying my required bill monthly. Big Lesson Learned Here!

Suggested fix: Ask more questions about payment plans. Also not elect the Income Based Repayment Plan. Instead, I would have selected the Standard Repayment Plan and worked to earn more money to satisfy the monthly payment.

Lesson 6: Not being aware of all the interest accruing from Lesson #5. Approximately $5000 accrued in interest during that timeframe.

So, all of that interest that wasn’t being paid because of the Income Based Repayment Plan went somewhere and basically it was accruing in the “background”. A total of approximately $5000 in interest capitalized on my loans. Honestly, I was not aware that it was accruing. I just didn’t know.

Same suggested fix as before: Ask more questions about the interest.

Lesson 7: Changing your payment plan causes accrued interest to be due or capitalized onto the balance of your loan. This hurt!

Yearly, I was required to reapply for the IBR and during this time my salary and family size is required. Since I received a promotion at work since my last approval for IBR, I knew that I wouldn’t be approved for it going forward because of my new salary. Therefore, it was time to change my payment plan and my options were Standard Repayment Plan, Graduated Repayment Plan or Extended Repayment Plan. I elected the Graduated Repayment Plan and the customer service representative on the phone, told me about the approximately $5000 of interest that needed to be satisfied either by paying it or it could be added to my loan. At that time, We actually had the money to pay off the accrued interest but we had also just moved to Arkansas and even though I was employed, my husband wasn’t employed yet so it wasn’t financially wise for us to deplete our savings account by $5000. Also, It was such short notice so we decided for it to be added to my loans.

Suggested fix: Ask questions ahead of time about switching payment plans.

Lesson #8: Call the student loan servicer soon and often to get a good understanding on student loans. Ask any and all questions to get all the answers you need. This is so important because assuming that student loan debt is just like any other debt is an assumption that will cost you money, possibly a lot of money – in interest!

Mandatory Fix: Call your student loan company anytime you have a question. Period. No question is stupid when it comes to your money. Call them.

Bonus Lesson: Making student loans an option. Honestly, If I could turn back the hands of time I would have done all I could to not take out student loans. Ideas that come to mind: more scholarships, save money that I made when working in high school, working while in college to pay my way through college, etc.

However, I want to end on a good note – Best Thing I did thus far: Consolidate all of my loans with Nelnet. This way, all of my loans are with one servicer and Nelnet breaks all my loans up into individual loan groups so I can pay on loans individually to pay them off. At the writing of this blog post, I have 4 loan groups to pay off and I started with 10. My total debt is under $35,000 and at one point it was nearly $65,000. I am making progress and I am committed to paying my student loans off.

So, let me know – Do you have a lesson to share about student loan debt? Did any of my lessons surprise you? Did any parts of my college journey surprise you? Let me know in the comments.

PS: I was the first of my family to obtain a Bachelor’s Degree. I have an Associates Degree is Office Systems Technology and a Bachelor’s Degree in Communication.

A few resources:

Federal Student Loan Basics for Students PDF 

 

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August Debt Payoff Report

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August Debt Payoff Report

August was a great month because I paid off another Student Loan Group. Yes! Student Loan Group D bit the dust. When this loan was disbursed to me in college, it had a balance of $4,934.00 but due to interest that accrued while I was on the Income Based Repayment plan (that didn’t cover all the interest) an additional $1,151.24 was added or as the student loan people like to say, “capitalized”. So a balance of $4,934 became $6,085.24

Income Based Repayment Plan: This is where your monthly payments will be either 10 or 15 percent of your discretionary income (depending on when you received your first loans), but never more than you would have paid under the 10-year Standard Repayment Plan.

Capitalization: This occurs when the lender adds the interest to the principal balance of the loan. Then the capitalized interest becomes principal.

When I started targeting this loan in May of 2018, the balance was $5,901.05 ultimately it took about 3 months to pay if off.

Drum Roll Please

My payoff for the month of August wasn’t as large as other months but progress is still progress. I paid off an additional $425.00 this month which paid off Loan Group D and started the payoff process of Loan Group H which is starting with a balance of $5,889.34. The goal for paying off Loan Group D is December 31, 2018.

Just Say No

As with all months, there were somethings that I had to say no to but it was completely fine and life still went on. I don’t believe that you can yes to everything, everyone, every event and still achieve your financial goals. Therefore, the following things received a no from me:

  1. Recommended car repair of $700.00
  2. Taco Crawl event – $100 because of event cost and cost of babysitter
  3. On the Run Tour with Beyonce’ and Jay-Z – $100-$200

Debt Recap

Currently I only have student loans and a mortgage – 5 student loans to be exact and at one point I had 10. The snowball method is the current strategy for paying off my student loans.  I pay the minimum required payment on my student loans via monthly auto debit and then throw all remaining money on the student loan with the lowest balance. This plan will continue until I get down to the last two loan groups. When I get to the last two loans and will have one loan with a 2.125% percentage rate and one with a 6.3% percentage rate. I will pay off the 6.3% interest rate loan first and then the 2.125% interest rate loan, even though the balance will be lower on the 2.125% loan. Therefore, the last two loans will be paid off using the avalanche method. The avalanche method is where you pay off the debt with the highest interest rate first. This will save me some money on interest.

How do I pay on a specific loan group?

When making monthly payments on my student loans, I pay the extra money by group and my servicer is Nelnet. Nelnet provides an option to pay by group. Of course, any accrued interest would be paid first and the remainder will go toward the loan’s principal. Sometimes I make large payments, usually around payday and other times I make small random snowflake payments. August payments looked like a month of snowflakes:

3rd 16.95

9th 200.22 – This paid off Loan Group D

15th 110.00

27th 82.83

28th $242.58 (Standard monthly payment – not included in payoff total)

29th 15.00

 

2018 Numbers and Progress YTD:

January – $2450.00 – Last Credit Card Payoff!

February – $900 .00– Paid off Student Loan Group G. YAY!

March -$126.00 – Cash flowed a beach house rental for April, purchased spring/summer items and cash flowed some other expenses that came up. Honestly, just did a lot of spending this month.

April -$899.00- I planned to pay $1000 but I didn’t fully submit the payment so it was added to May’s payoff amount.

May – $2000.00 – This payment put me under the $50,000 mark! It was great to see $49K….

June – $1175.12 – I set a goal to pay off $1350.00 and honestly, I am a little disappointed that I did not meet that goal. Even though, I was only off by $174.88, I was still off! But now I am super focused to meet my goal for July – which will include the payoff of a loan group so there will be strict budgeting for July and saying, “No” to more events and non-essential shopping. However, I am a real believer of making  short-term sacrifices now for long term successes in the future.

July – $1200 – I set a goal to pay off $1447.83 – Which would have paid off Group D and it was a stretch but I wanted to try. Group D will definitely get paid off in August.

August – $425.00 – Group D paid off and started on Group H and my total balance is under $47,000.

The numbers reflected show payments made above the minimum payment required.  The payoff amounts show actual debt reduction.

Sugar and Money for the Month of July

Sugar for the Month- Moments with my family and friends to include a family beach trip to Isle of Palms, brunch boat ride with friends and rewarding myself with the 2019 Erin Condren Deluxe Planner!

Money for the Month – Paid off $425

Now Let’s Imagine… What could I have done with $425 if it didn’t go toward debt…

Sugar – We would have went to see the On the Run Tour in Atlanta, GA and made a weekend trip out of it.

Money – Continue funding the imaginary Roth IRA that I would have opened in May. I could add $425 to it and I would only be $700 away from the 2018 contribution limit of $5500.00.

 

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In Conclusion:

For the month of August, I paid off $425 from my student loans and I know the number could have been higher. However, every month won’t be a high payoff month in the sugar and money household because some months there will be more sweet living than paying off debt. I’m currently targeting Group H which now has a balance of $5,783.64. My current total balance on my student loans is now $46,771.17 – Under $47,000! I remember when my balance was $61,000.

A Question for you and Thanks…

Do you have any Student Loan Debt? If so, how much and do you have a plan in place to pay it off? Do you even plan to pay it off? Are you on a repayment plan?

Thank you so much for reading and all of your support!

Recommended books to get you started paying off debt and taking charge of your personal finances:

The Richest Man in Babylon

The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness

Girl, Get Your Money Straight: A Sister’s Guide to Healing Your Bank Account and Funding Your Dreams in 7 Simple Steps

Rich Bitch: A Simple 12-Step Plan for Getting Your Financial Life Together.Finally

My blog on creating a budget and setting a monthly goal:

How to Create a Budget in 6 Easy Steps

July 2018 Debt Payoff Report

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July 2018 Debt Payoff Report

At times July seemed to creep by and then BAM it was over! With July came the normal expenses but also a birthday and an anniversary gift but nothing too far fetched. I did say No to few things that if I wasn’t in debt, I would have definitely said Yes to. This month, I set a big goal – which was to pay off the remainder of Student Loan Group D! At the beginning of July the balance was $1447.83 and being the goal orientated person that I am, I set out to pay it off this month. I admit $1447.83 in a month would be a stretch but I was up to the challenge. A constant thought of mine is that each day, each payment, each month is just getting me closer to be Magical Land of Student Loan Debt Freedom!

Drumroll please…

It pains me to write this but I didn’t pay the targeted Student Loan Group off. The goal was big and ultimately proved to be a little too big. However, I did pay off $1200 of that balance and I am definitely proud of that. Which leaves me approximately $247.83 away from paying off Group D and I will pay that off on August 9, 2018 – first thing in the morning, as soon as the direct deposit hits my account!

Just Say No

There was only one big thing that I said No to this month and it was that one of my friends renewed her wedding vows in Jamaica and yes, I wanted to go but said No. Last year the planning started and initially I said Yes to the trip.  There was a payment plan available and an all inclusive trip to Jamaica with friends sounded awesome but I just knew that each of those payments could go towards my loans so ultimately we decided to not take the trip. I also said No to a few things that I wanted out of Target because I didn’t truly need any of those items so they stayed in the store. Honestly, I know I could have said No to more things in July (like eating out) which would have possibly allowed me to pay off Group D but no need to beat myself up about it now.

I have found that saying No is getting easier and easier when the event or item is taking away from my goals.  I also know that saying No is a short term sacrifice for the long term success that I am setting myself up for. Of course, I am not perfect. True friends and family understand why I am saying No. Since, I am weighed down with $47,000 in student loan debt and I want to get out of it as soon as possible, I have to say NO sometimes now so I can say YES to more things later.

Debt Recap

Currently I only have Student Loans (no car loan/no revolving credit card debt, but we do have a mortgage) – 6 loans to be exact and at one point I had 10. The snowball method is the current strategy for paying off my student loans.  I pay the minimum required payment on my student loans via monthly auto debit and then throw all remaining money on the student loan with the lowest balance. This plan will continue until I get down to the last two loan groups. Then I will have one loan with a 2.125% percentage rate and one with a 6.3% percentage rate.  At that point, I will pay off the 6.3% interest rate loan first and then the 2.125% interest rate loan, even though the balance will be lower on the 2.125% loan. Therefore, the last two loans will be paid off using the avalanche method. The avalanche method is where you pay off the debt with the highest interest rate first. This will save me some money on interest.

How do I pay on a specific loan group?

When making monthly payments on my student loans, I pay the extra money by group and my servicer is Nelnet. Nelnet provides an option to pay by group. Of course, any accrued interest would be paid first and the remainder will go toward the loan’s principal. Sometimes I make large payments, usually around payday and other times I make small random snowflake payments. July payments looked like this:

5th $30.00

12th $500.00

16th $21.57

20th $15.40

27th $586.36

28th $279.27 (Standard monthly payment – not included in payoff total)

31st $46.67

 

2018 Numbers and Progress YTD:

January – $2450.00 – Last Credit Card Payoff!

February – $900 .00– Paid off Student Loan Group G. YAY!

March -$126.00 – Cash flowed a beach house rental for April, purchased spring/summer items and cash flowed some other expenses that came up. Honestly, just did a lot of spending this month.

April -$899.00- I planned to pay $1000 but I didn’t fully submit the payment so it was added to May’s payoff amount.

May – $2000.00 – This payment put me under the $50,000 mark! It was great to see $49K….

June – $1175.12 – I set a goal to pay off $1350.00 and honestly, I am a little disappointed that I did not meet that goal. Even though, I was only off by $174.88, I was still off! But now I am super focused to meet my goal for July – which will include the payoff of a loan group so there will be strict budgeting for July and saying, “No” to more events and non-essential shopping. However, I am a real believer of making  short-term sacrifices now for long term successes in the future.

July – $1200 – I set a goal to pay off $1447.83 – Which would have paid off Group D and it was a stretch but I wanted to try. Group D will definitely get paid off in August.

The numbers reflected show payments made above the minimum payment required to show actual debt reduction.

Sugar and Money for the Month of July

Sugar for the Month- Moments with my family. We purchased a membership to our local zoo so we started taking advantage of the membership immediately. We enjoyed watching, “Lion King” at the zoo’s amphitheater and also visited the zoo on a separate day to see all the animals. I went to a comedy show with my Mom and cousin AND my husband and I squeezed in 2 date nights! July was filled with great experiences.

Money for the Month – Paid off $1200 and even cashed in some coins to help with my debt payoff. I attempted to sell some children’s items to a local store but the offer was to low to accept.

Now Let’s Imagine… What could I have done with $1200 if it didn’t go toward debt…

Sugar – A Vacation! There is no doubt about it, we would have loved to take a vacation during the month of July.

Money – Continue funding the imaginary Roth IRA that I would have opened in May. I could add $1200 to it and I would only be $1125 away from the 2018 contribution limit of $5500.00.

In Conclusion:

For the month of July, I paid off $1200 from my student loans. I am currently targeting Group D which now has a balance of $247.83. My current total balance on my student loans is now $47,278.

As always the goal is to be as transparent as possible without disclosing our income. After all, it’s not how much money you make but how much you save, spend, give and invest.

A Question for you and Thanks!

Do you have Student Loan Debt? If so, how much and do you have a plan in place to pay it off?

Thank you so much for reading and all of your support!

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10 Ways Finances and Fitness are Alike

finances, fitness

Recently, I started back working out and eating better to get some weight off but to also have an overall healthier lifestyle. One day in spin class it came to me that my debt free journey and physical fitness journey are very alike. I didn’t always think they aligned so much but they do. I have listed 10 ways below:

10 Ways Finances and Fitness are Alike

 1. It’s going to take time.

You didn’t gain the 20 or 30 pounds overnight and you won’t wake up 20 or 30 pounds lighter after one salad and cardio session. Which is the same thing with paying off debt or building a saving account, you won’t reach your goal with one payment or deposit but all journeys start with taking the first step.

 2. You must decide.

One of my favorite quotes is, “Nothing happens until you decide” which I read in Oprah Winfrey’s book, “What I Know For Sure” (a really good book that I need to re-read) and that is very true with physical fitness and with finances. You have to decide that you want a change and you will do what it takes for that change to occur. 

3. You will have to say No – A lot!

Examples will be saying No to foods that are outside of your eating plan/diet. Saying No to things that are outside of your budget, unnecessary purchases, impulse buys, etc. You can’t continue to eat the same way that caused you to gain weight and just pray and hope that the weight falls off. Same with finances, you can’t keep spending more than you make or spending everything and not saving for a rainy day and expect to have a fat bank account or a thriving investment account. You will have to do the work for the weight to come off, debt to get paid off, savings account to grow, and that work will include saying No to some things.

4. Planning becomes very important.

You will start planning out your meals so you eat what you are supposed to eat- some people may call it eating based on your macro’s or maybe you are counting calories either way you will probably start packing your lunches and/or meal prepping. With your finances, planning can come in the form of creating your monthly budget and sticking to it. Scheduling time to review your budget and purchases. Some prefer the envelope method to control spending while others may prescribe to creating digital envelopes with multiple bank accounts. I love using my Erin Condren deluxe monthly planner for laying out my bill due dates and scheduled workouts.

 

planner, finances, debt, bills

5. Celebrate milestones.

Yes plan for celebrations when you reach a certain goal. Now don’t go overboard, but a small ice cream cone, slice of pizza or budgeting extra spending money for a Target run for something you’ve been eyeing could help you stay onboard. 

 6. Remember this is your personal journey.

Your journey is your journey and someone might be doing better than you but that’s okay. I can’t remember how many times I have been in a workout class and one of the other ladies is killing their workout, spinning faster than me, dancing harder and more on beat than me in Zumba or passing me while running laps. Guess what? It is going to happen but I don’t quit. It actually makes me go harder and realize that if she can do it, so can I. Same with paying off debt or seeing someone’s investment account numbers. They could be paying off debt faster than me, accumulating more wealth than me, etc but again that’s cool. Everyone’s journey is different but just stay focused on your journey and don’t you dare quit.

7. Don’t put it off any longer.

Plain and simple – the choices your present self make directly affects your future self. So make the needed changes now for Future You! You only have body and one life to get it right so start now. Think about “your retired self” and how you want to live.

8. Get an accountability partner.

It helps to have someone that you are accountable with. This person might workout with you at the gym or maybe you text them when you are thinking about making a bad food choice and they talk you out of it or suggest a healthier option. Same with your finances. Have someone that you can talk with about your finances because more times than not, your selected accountability partner will be happy that you asked because they need accountability also. They may have the same struggles you have or maybe they can solve a problem that you have. If you don’t want to talk to a friend then there are numerous Facebook groups that you can join for free for accountability or even Instagram because Instagram has a large community of people that talk finances, debt, weight loss, diet, etc.

 9. Write down your goals, create a plan and start!

Plain and simple write down your goals clearly and look at them often. Create your plan and then start. Two books that I recommend for creating a financial plan is, “Total Money Makeover” by Dave Ramsey and “Rich Bitch” by Nicole Lapin. However, remember my motto – Take what you need and leave what you don’t because I don’t believe that personal finance is one size fits all plan.

10. Don’t give up until you reach your goal.

I’ll say it again for the people in the back, DON’T GIVE UP UNTIL YOU REACH YOUR GOAL! If you give up then you will have to start over so you might take a break at times on the journey if you need to but DON’T GIVE UP!

BONUS: Follow the path of someone that has achieved what you are working to achieve.

There is no need to reinvent the wheel, they are numerous books on financial topics and also physical fitness/diet. There has to be a plan out there that will work for you or get you started on your journey. Just start researching online or head to the library or bookstore to read up on the appropriate topic to reach your desired goal.

 A few books that I like as it relates to finances:

Total Money Makeover

Rich Bitch

Girl, Get Your Money Straight

Richest Man in Babylon

Think and Grow Rich

One book that I like as it relates to physical health is:

The New Abs Diet

Only one because this is the one book that I followed in the past and helped me to lose 20 pounds in 6 weeks! So I always sing the praises of this book because it worked for me.

What do you think of a connection between personal finances and fitness?

Please subscribe to this blog if you haven’t already.

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June Student Loan Payoff Details

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June 2018 Student Loan Payoff Details

Just like that another month has passed by and we are halfway through 2018. As each month passes, I can’t help but think that I am one month closer to having no student loan debt. I look forward to the magical land of ZERO balance. However, which each payment and each month there are hard decisions to be made. There were two big things that I said, “No” to. One was essentially a free trip to beach. We had a free place to stay but we would still have to cover gas, meals and any extras that might pop up. This was a hard decision to make because I love going to the beach, I mean L-O-V-E. The next “No” came when I declined a trip to Essence Festival in New Orleans and trust me, I wanted to go. However, when I considered the costs of my plane ticket, meals, concert tickets, transportation, etc – the decision was, “I will pass this year.”

Sometimes saying “No” is the easy part and the hard part really comes in the action. The action of making those extra payments. Because I don’t know of anyone that truly finds joy in paying off debt or I dare to say any bills – or is that just me. True it is a great feeling to make progress monthly towards becoming debt free and also knowing that your electricity, water and cell phone bill is paid but that doesn’t mean that you like paying bills. I would pick spending my income on experiences or investing over paying off debt any day but its good to know that the fun stuff will come soon.

If you are new to my debt payoff story – currently I only have Student Loans (not including mortgage) six loans to be exact and at one point I had ten. The strategy that I am using to pay off my student loans is the snowball method where I pay the minimum required payment  on all groups and then throw all remaining money on the student loan with the lowest balance. I plan to continue with the snowball method except for when I get down to the last two loan groups. Then I will have one loan with a 2.125% percentage rate and one with a 6.3% percentage rate.  In that case, I will pay off the 6.3%  interest rate loan first and then the 2.125% interest rate loan, even though the balance will be lower on the 2.125% loan. Therefore, the last two loans will be paid off using the avalanche method. The avalanche method is where you pay off the debt with the highest interest rate first. This will save money on interest.

2018 Numbers and Progress YTD:

January – $2450.00 – Credit Card Payoff!

February – $900 .00– Paid off Student Loan Group G. YAY!

March -$126.00 – Cash flowed a beach house rental for April, purchased spring/summer items and cash flowed some other expenses that came up. Honestly, just did a lot of spending this month.

April -$899.00- I planned to pay $1000 but I didn’t fully submit the payment so it was added to May’s payoff amount.

May – $2000.00 – This payment put me under the $50,000 mark! It was great to see $49K….

June – $1175.12 – I set a goal to pay off $1350.00 and honestly, I am a little disappointed that I did not meet that goal. Even though, I was only off by $174.88, I was still off! But now I am super focused to meet my goal for July – which will include the payoff of a loan group so there will be strict budgeting for July and saying, “No” to more events and non-essential shopping. However, I am a real believer of making short-term sacrifices now for long term successes in the future.

The numbers reflected show payments made above the minimum payment required to show actual debt reduction.

Sugar and Money for the Month of June

Sugar for the Month- a weekend trip to Atlanta for a women’s conference. The women’s conference was worth the ticket price and more (To save money, the ticket was purchased during an early bird special and the hotel stay was split with a friend) Personal development is definitely worth the cost.

My husband and I also took a weekend trip to Richmond, VA to celebrate a friend opening a store front for her boutique. Thankfully, we were able to stay with our friends for free and our main expenses was only food and gas. Celebrating with friends and a low cost weekend getaway is a win -win in my book.

Now Let’s Imagine… What could I have done with $1175.12 if it didn’t go toward debt…

Sugar – Two tickets to see the off Broadway theatre show “Hamilton” when it comes to Charlotte, NC in October, which would be right around the time of my birthday.

Money – Continue funding the imaginary Roth IRA that I would have opened in May. I could add $1175 to it and I would only be $2325 away from the 2018 contribution limit of $5500.00.

Next Steps with Debt Payoff:

Currently targeting Group D with a balance of $1,447.83 and my current overall balance on my student loans is now under $49,000. Hello $40’s and now I am gunning for the $30’s.

As always the goal is to be as transparent as possible but I won’t disclose our income. After all, it’s not how much money you make but how you spend what you make.

Feel free to share a sugar and/or money moment of the month below.

Let me know of any questions or comments and Thank you so much for reading and all of your support!

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