Student loan payoff plan 2015
I’ve said many times that my goal this year is to pay off my highest interest student loan, which has a balance of a little over $6,000 at this point. I didn’t make any plan as to how much I would pay at a time, so that I would just pay it off as quickly as possible.
The problem is that I haven’t put any extra money (besides my monthly payments, which are $100 above the minimum) toward that loan at all so far this year. There are two reasons for this:
- I have failed to earn (or even really try earning) side income
- Extra expenses keep popping up
I’m at a point where I could put a sizable payment on my loan, but since extra expenses keep appearing, I don’t want to drain my savings. But each month, I have extra money. That money just seems to vanish.
So I decided I’m not putting that extra money in savings anymore. I’m also not going to take the money currently in savings out. It’s a nice safety net.
With 9 months left in the year, I need to put about $700 a month toward that loan in order to pay it of in December. December’s payment will be less, though I haven’t calculated exactly how much, because of interest and the fact I’m an English Major and it’s best if I stick with round numbers.
I went into my budget spreadsheet and changed my monthly payment to 700 (it’s currently 250). Much to my surprise, that didn’t put my month’s total in the red! It made my current spending freeze pretty mandatory, but it leaves a tiny bit of money for extras. I mapped out my budget for May and June as well. If I don’t take any unpaid days off work, then I actually have an extra $100 more next month than this, and $100 more in June.
So that’s my plan- I’m not saving anymore. I’m spending the money immediately (on my loan payment). That way, I’m making the monthly progress I need to be done by December.
As a side note, this is the month I’m going to actually work on gaining side income. I’ve mapped out daily tasks and deadlines. Any money I earn on the side will go toward unbudgeted expenses (which, as history has shown, are sure to crop up), and saving for a car.
Yes, I also want to buy a new car by December. I’m not going to finance it, so it will need to be used, but I have a few standards I’m not willing to budge on. It will take a while to find something in my price range, but that’s alright, because I don’t actually have the money that is my price range yet.
Since my side income is now my “car fund”, I’m going to be pretty motivated to improve my efforts- that is, make an effort.
For fun, tomorrow I will write a bit about my standards for my future vehicle, and the reasoning behind them.