Month 11: -$113,546.61
I can’t believe it’s been almost a year since I switched my focus from paying off my credit cards, to paying off my student loans! Every month that I update this, it motivates me to conquer debt and improve my future! I hope it helps you as well.
If you want more detailed information, check out November’s payoff report. Remember, calling this “Month 11” is a misnomer. This is year 5 & Month 11 of payoff. Two months ago I made my first ever principal payment on these loans, thanks to refinancing them, and last month the overpayment for the refinance credited to the balance. I’m so excited!
Extra Income This Month
Affiliate links are used in this post, and most posts here on WMSB. If you click on a link and make a purchase, WMSB receives a small commission. You don’t get charged a penny more for this, but it keeps WMSB running, and makes my debt repayment happy.
Amazon Affiliate: $0.00
SiteGround Affiliate: $0.00
Day Designer Affiliate: $0.00
Ebates Cash Back: $0.00 sent quarterly
Sponsored Posts: $300.00
Side Hustles: $186.00
Expected/Unexpected Reimbursements: $901.78 – Reimbursement for the overpayment of my student loan when I refinanced; $98.26 Cash back match for the last year of my Discover Card
Where My Payments Went
Law School Refinanced Loan: $950.00 = My monthly payment + a little extra* + $901.78 (above) = $1,851.78
Extra Blogging Expenses: $35 for a giveaway; $38 for an instagram loop; $12, shipping last month’s giveaway prize
Discover Card: $727.80 – read more about how I screwed up my 0% interest repayment plan here. Seeing this amount makes me excited, though. I simply put a lot of extra money toward this debt, and didn’t really notice it was missing. Now that I’ve corrected my 401k mistake, I can get back on track.
Extra Yard Service: $50.00 I have a yard guy who comes and makes my yard look amazing. It’s $50 every 2-3 weeks in the spring/summer. Worth every penny. On his last visit, he also cleaned up the appearance of the bushes in front of my house for an extra $50.
Total Payments: ~$1714.54, ~$2,714.58 if you count the reimbursements.
*I made this payment early. I get paid every two weeks and it’s sort of gone off schedule from how I normally pay my bills. They’re separated, naturally, by one check paying the mortgage and the other check paying my student loan. It works out really well. So when the dates get a little off track, it’s harder to organize. In order to not having the money sitting in my checking account for too long, and pay some principal sooner, thus resulting in less accruing interest, I made this payment early. Then, I discovered that DRB/Laurel Road doesn’t require you to send a fancy letter saying all extra payments should go toward the balance and still take out my standard autopayment amount.
This meant that if I didn’t suspend autopay, I’d be paying ANOTHER $932.05. That obviously wouldn’t work. So I paused the autopay on the last possible day, and set up a system to transfer the monthly payment to a different checking account I have. That way, the money will always come out of that account, I don’t have to worry about accidentally spending it in my regular checking while I wait for the due date, and I won’t have to suspend autopay. Having autopay set up provides an interest rate discount. So for about 5 days, I lost that discount. I don’t want to do that again. I’m excited to see how the process goes this month, coming from the other account.
Interestingly, my monthly payment amount dropped too. Now, instead of being $932.05, it’s $923.94. I really like that Laurel Road lets you pick an overpayment amount as well. I’ve rounded my auto-debit amount to $935.00 so it will always take that out instead. Every dollar helps!
You’re going to see my 401k reduce again soon. If you don’t follow me on instagram, I have exciting news!!
J and I are engaged! We shook hands in agreement to not put the wedding on a credit card (gah!). I’m so glad we did that. It is going to really keep me focused and on track, and has already made a difference in how I’m spending money on the small items we’ve already purchased. For example, I almost bought a box of thank you cards on amazon. They were $15 and seemed like a good deal. But I figured I’d check out what Target had. They had a similar sized box, a little more our style, for only $9.99. That’s $5 more to go somewhere else that I would have just spent if it weren’t for our focused goal!
Because I didn’t have a wedding savings already, and because I run a 0 based budget, I made some decisions on how to afford cash-flowing a wedding. One of them was to reduce my 401k contributions. I know, I know. Future-Me is a little annoyed too. My employer’s match has already been met for the year, I’m still contributing to it, just by a smaller amount, and I’m still contributing to both my Pension and my IRA. My employer also contributes to a separate pension. So this decision is not made with total disregard for my retirement. But as I’m sure you can tell, I agonized over it for a long time. ugh. However, I will pretty happy on the morning after our wedding when I wake up and don’t have a $10,000-$20,000 bill for the party we threw the night before!
Current Law School Student Loans Balances
Paying off six figures of student loan debt feels like a bottomless pit. But seeing the numbers in a graph and chart form helps to see that there really is progress.
You can see that I paid a little over $200 in interest. That’s from making my payment early. There is already about $500 in accrued interest for next month, since it’s been accruing for longer, and includes a few days where I wasn’t getting the .25% autopay discount. Ugh. Well, it was informative to try that method, at least.
I’m keeping track of how the per-day interest is impacted because I’m really curious to see what a difference making principal payments makes, and also determine what kind of daily impact refinancing my student loans is having on my life.
Before Refi Per-Day Interest: $20.34
Last Month’s Per-Day Interest: $15.62
Current Per-Day Interest: $15.08
I refinanced with Darien Rowayton Bank. I wrote all about it in the Complete Guide to What it was Like to Refinance My Student Loans. The interest reflects the overpayment made on my federal loans. DRB is rebranding their student loan branch into “Laurel Road.” So if you hear me talking about Laurel Road in the future, that’s why. Perhaps they heard my point that DRB is a really unfortunate acronym for a bank.
To create this chart, you can see in red that I combined the total of my bar exam, subsidized and unsubsidized loans, so that the progress can still be tracked over time and it doesn’t look like I’m starting over. In my opinion, keeping momentum in debt repayment (and being kind to yourself if you get off track) is key to long term success.
Since last month, I’ve been talking to the people at CommonBond about their service. I didn’t apply at CommonBond because based on the three rate quotes I received, DRB/Laurel Road was already pretty low and I was ready to start the process. I learned that CommonBond has a process of beating the rate of a competitor if theirs isn’t already lower! CommonBond and WMSB have teamed up to give you an exclusive $200 cash bonus if you refinance your student loans with CommonBond using this link!
Financial Goals Now:
There are still things to accomplish, and goals to achieve that I’ll discuss below. But we definitely need to take the time to celebrate the wins we achieve throughout the payoff process. If we don’t, we will burn out or get discouraged. I’m speaking from experience here.
My Debt Repayment Goals
1) Pay off my car. 3) Pay off the Bar Exam Student Loan. I stuck with the snowball method, to pay off the bar exam loan, and it totally worked! 4) Re-evaluate my savings and retirement plan. 5) Tackle the accrued interest from my income based repayment plan. CHANGE OF PLANS! Refinance my Student Loans.
6) Reduce Student Loan Balance by $10,000 to $104,500. I’m coming for you, law school student loans! It’s strange to not have a snowball anymore. So I’m tracking my repayment in increments.
7) Reduce Student Loan Balance to less than $100,000. When I hit that $99,999.99 mark, I think we should celebrate!
Here are answers or insight into a few common questions that have come up during this process:
- September 2016: Progress Report #1 -$125,136.26
- What is the Snowball Method?
- How I Paid Off $11,000 in Credit Card Debt + my car at the same time
- Do you hate your career? I did for a long time too. Here are 4 Changes I Made to No Longer Hate Being a Lawyer
- A Review of the Hosting Service I Use for Blogging – which allows me to earn extra money by blogging
- This article at Clear Point gives fantastic advice about how to tell your loan servicer how to process your payments. I would highly recommend reading the post and the comments if you’re dealing with student loans.
- The Real Life Tracking Sheet I use to track my financial, health and self development goals.
- The Complete Guide to Refinancing Federal Student Loans – My experience from start to finish applying with DRB, SoFi and Earnest to refinance my student loans.