It’s that time again! Time for another student loan update. If you’re new around here, you may not be familiar with our particular story. Allow me to fill you in real quick.
Our Student Loan Debt Situation
You see, I graduated from college without any student loan debt. I have a cosmetology diploma, an associate’s degree in business administration, and a bachelor’s degree in business administration. I chose affordable state schools and took most of my classes online, so I didn’t even have to pay for expensive student housing.
That’s a good thing because Josh had enough student loan debt for the both of us! He didn’t exactly have the same support system that I had. He didn’t have anyone there to help him pick an affordable school, so he ended up at a very expensive for-profit university.
Don’t get me wrong. We’re very grateful for his education. His bachelor’s degree is in computer information systems, so he was able to get a good job one month after graduating. But that education came with a hefty price tag, one that he wasn’t fully aware of when he signed up.
In all, he ended up with $75,000-$80,000 in student loan debt. We aren’t sure what the exact amount was because he had been making payments toward the private student loan before we got married. I didn’t keep track of his payments back then, and he doesn’t remember how much he paid from March 2014 to August 2014.
When we got married that September, I took over paying the bills and started keeping meticulous payment records. At that point, we paid off the remaining $11,000 private student loan out of our savings account and focused all of our energy on the federal loan, which totaled $64,000.
Since then, I’ve been keeping track of our total yearly payments. It’s kind of cool to see how much we’re able to pay from year to year. Here’s what our payments in 2014, 2015, and 2016 looked like:
Which brings me to today!
Student Loan Update: October 2017
As of this morning, Josh’s student loan balance was $44,526.40.
We paid $2,500, which lowers the balance to approximately $42,026.40. This is just an estimate because interest still accrues while our payment is in transit (usually one to three days).
As for the total amount we’ve paid on the loan so far this year, here’s our progress:
We’ve already surpassed last year’s total payments! That’s what I call a win. We’re working so hard to keep our expenses low so we can make larger payments each month. You can read all about the different ways we save money in this post.
We also recently switched to a cash budget.
This whole time I’ve been thinking that we had a good grip on our finances.
Was I ever wrong!
I didn’t realize just how many little things slipped through the cracks. A restaurant meal here, home decorations there, a video game or two for Josh. We didn’t have a solid plan for our money at the beginning of the month, so we ended up wasting a good bit of it. We’d get to the end of the month and wonder where all of our money went!
I’ve been a Dave Ramsey fan for years, but I never really “got” the importance of cash until now. It really does hurt to see it leaving my hand! That pain point just isn’t there when swiping a card.
And it’s a real eye-opener to see the cash disappearing as the month wears on. I know that I have a limited amount of cash, and when it’s gone, it’s gone! No more spending. I’m far more aware of my purchases when I know I have a finite amount cash in my wallet.
In the very near future, I plan to write an in-depth post about how to switch to the cash envelope method of budgeting. It’s pretty straightforward, but there were a few things I had to learn the hard way.
After talking to several people about cash budgeting, I’m convinced that it’s really the best way to go if you’re ready to take control of your finances. I’ve been so happy with our progress so far, and I’m confident it would be beneficial for you too.
So there you have it, folks! We’re so close to being below the $40k mark. Hello, thirties!! I just love seeing that number get lower and lower.
- Student Loan Update: August 2017
- Student Loan Update: September 2017
- How We Cut Our Spending to Maximize Our Student Loan Payments
Do you have student loans? If so, are you trying to pay them off early?
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