Day 216 | $16,087.54 paid | $55,988.04 to freedom
Annual Milestone #1 met! 216 days ago I set the goal of paying down $5000 in principal of my student loans before the end of the year. Now, one month before that deadline, I’ve reached the goal and then some. Looking back, I thought that my goal was overly ambitious – I was only planning on being able to knock down $350 in principal per month at first. With some discipline, focus and a renewed energy and investment in my financial well being, knocked off nearly $700 in principal last month.
It’s kind of amazing when you think about it. I was perfectly oblivious to the fact that I was paying down my student loans at half the rate that I could afford to. Part of me wants to say “what if you did that earlier,” however I’m a glass-half-full kind of guy. I’m more excited about what I can do in the future, knowing that accomplishments I can pull off.
The Brass Tax
- $1,000 paid
- Principal reduced by $693.53
- $496.19 over 2013 annual goal – as of now!
- $300 in addition income
At the current pace, I am paying down about $700 a month – that’s a $1,000 payment. It’s a little more than my budget really allows. I have been receiving additional income since September, however that will run out after my December paycheck. I am hoping to find a way to keep making $1,000 payments, but I might have to drop down to $850 again. Either way, I should end 2013 about $1200 past my goal. If I apply that excess to my 2014 paydown goal, it means I would have an additional $10,800 to pay off in 2014.
2014 in $850 payments
$6,600 in normal payments = $4,200 short of $10,800.
2014 in $1000 payments
$8,400 in normal payments = $2,400 short of $10,800.
Needless to say, keeping that payment at $1,000 will be crucial. In both circumstances, I put myself within reach of my goal, give or take additional income that can be applied. This year my additional income came in over $5000, however I anticipate it to be down next year. Of course, the higher payments also mean a slightly quicker decrease in the amount of payment that heads towards interest, which sits at about $300 per month currently.
Looking forward, holiday season is coming. That means I’ll have an increase in spending, but unlike in years past, I have a plan. My coaching stipend in December will be $200 larger than the previous three months, plus a few gifts have added to the size of the holiday fund. Hopefully I won’t have to dip into my normal budget too much!