Student loan payoff update

by Nick on October 5, 2010

As longer-term readers already know, I plan to save up enough to pay off my student loans by the end of 2011.  It’s an ambitious goal, but that’s OK.  I have a plan.  And I’m on track. 

So here’s a quick update.  Almost two months ago I updated you and was almost 10% of the way to saving up enough.  How have I done the last two months?  Pretty good.  Here are some more details:

Through my normal monthly payments I’ve reduced my principal to $86,408.15.  It was $86,985.11.  That’s $576.96 paid down in two months just making the normal payment.

I’ve also increased my savings to $12,023.08.  I sold some more “stuff.”  I ate a few more PB&Js; than I usually do.  And I’ve been focusing on cheap and free things to do with the family like free museum weekends and vegetable picking.  It’s actually been much more fun than I expected. 

Also, I worked a ton of overtime though 2010 and accumulated what I expect to be a HUGE bonus that gets paid in December.  So we’ll see how that shakes out.  My work says it’s guaranteed, but I don’t believe it until it’s in my account.  Supposedly I “locked in” a good chunk of cash that I have set in my plan. 

So that’s a total of $12,600.04 saved up / paid off and $74,385.07 to go ($86,408.15 minus the $12,023.08 I have set aside).  Not bad!  But it’s a lofty goal and I’m certainly going to need to find some big-ticket items to sell.  Hmmm…. (looking around the room). 

I think I’m going to have to kiss my motorcycle and drum set that I’ll never use again goodbye.  What else, what else, what else?  I’m sure I have a ton of stuff to sell.  I just need to get more creative.  Maybe I’ll have a sidewalk sale… (I don’t have a yard or garage…).

Go me!  October should be a good month.  I had an expense in September that resulted in a little less savings than planned.  That’s OK.  October should be better and I may actually get some of the September expense back to add in.

Until next time, put your credit card down and slowly step away from the mall!

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Student loan payoff update

by Nick on August 13, 2010

I’m still catching heat from my friends and coworkers for my plan to save up enough to pay off my 2.5% interest rate student loans by the end of 2011 (that’s over 23 years earlier than the scheduled payoff date!). 

I’ll have the last laugh.  I’m already well on my way.  I detailed my reasons in the original post, so I won’t bore you with them here.  Now for the update.

Here’s what I’ve done:

  • I sold a few things (I don’t want to talk about it!  This hurt!  But I’ll buy them back (without paying 2.5% interest on them and pay cash to hopefully get a greater discount);
  • I saved a lot more than usual (Some would say is tough because I’m generally perceived to be cheap by those who know me.  I prefer to call myself frugal (as in not “wasting” money) rather than cheap (as in not “spending” money).  But this also involved, in part, bringing my lunch to work every single day.);
  • I dedicated one savings account that had about $4,000 to my goal;
  • I dedicated the remaining balance (less what I budgeted to need over the next 30 days) in my checking account to my goal;
  • I opened up an Ally Bank savings account as a temporary holding account and deposited the money from the activities described in the first bullets; and
  • I bought two – yes two – Ally Bank 5-year CDs with an APY of 2.89 and only a 60-day interest early withdrawal penalty to have this money earning a little bit more – maybe getting me there a little bit faster.  (It’s worth the 60-day penalty for the higher APY to me.).

How far did that get me?  Almost 10% of the way there!  I’m not going to lie to you – it’s been tough.  But it’s also fun to see how quickly I can “rally the cash” together and how different my thought process is when I have an aggressive, but attainable written goal - and a plan.  Go me!

Until next time – put the credit card down and slowly step away from the mall!

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