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Shame is very Motivating

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In continuing my Student Loan saga, based on my research, I am more determined than ever to get rid of this debt. The realization of my complete ignorance in getting into their much debt, let alone, letting it hang around my neck for over 17 years…well, no more. I broke down the details in my last post and explained where this debt is from and more importantly how long it has been here.

Ugh! As of today (5/1/2020 when I am writing this post,) my student loan balance is $33,893.20.

The Plan

Since both loans are being charged the same interest, and the unsubsidized or subsidized doesn’t matter since I am out of school. I think my best bet to is focus on paying the lowest balance loan first.

I realize that keeping them listed as Loan 1 and 2 doesn’t really matter, but having a loan paid off or seeing one’s balance go down significantly faster will be a mental boost for sure.

Thoughts of this plan?

When Not Deferred

When not deferred due to the virus, the required monthly payment is right at $306. So what I’d like to do is start designating that payment to the lower balance loan immediately. It is already in my budget.

Once the deferment period is over, which is currently set for the end of August, they payment will be split between the two loans. Based on my last payments, the split designates approximately $130 of each payment toward this loan.

But for now, I can make some progress on the smaller of the two. The current balance of the smallest loan is $14,131.

Lofty but Achievable Goal

Using very basic math, I divided the current balance by 12. To pay the smallest of these two loans off within the year, I need to pay $1,178 every month on it. And that doesn’t take into consideration the $175ish that is paid to the larger loan every month (when not in deferment) or the interest that will continue to accrue.

So, my dream goal…pay off the smaller two of the loans by May, 2021. Is it possible based on my average income from the past year…yes. But it will be a stretch. In every way.

But with the shame motivating me. I believe I can do it.

And having the next 3 months will the payment solely focused on that loan will help tremendously.

I am glad I went to grad school. I learned a lot, made some amazing life long friends and it definitely has made a difference in my career and earning potential. But there is no word other than STUPID and IGNORANT for how I handled the finances. In hindsight, I would have gone more slowly. I would have paid cash for it.

And I am having these discussions with my children on a regular basis. I do not want them shackled by debt especially when there are ways around it.

The Big Beast

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We celebrated our 3-year debt free anniversary recently. We spent those years building our emergency fund, replacing a vehicle, and buying two trailers (bought one, sold it, replaced it). We traveled. We had fun. When you have two working adults and no debt, it’s amazing how quickly you can do those things.

We committed last December to tackle our mortgage. At the time, our mortgage was $320,000. It’s a Beast but it seemed doable looking at what we were able to accomplish in such a short time the previous years.

Life changed. The construction work we thought my husband would have didn’t materialize and the part time night job went to pay other things.

There isn’t a lot to throw at the Beast and it’s hard to stay motivated.

I was supposed to get a promotion and a raise in June. We’d been holding on to hope we’d be able to start throwing larger chunks then but thanks to the coronavirus, it’s not happening (for now anyway).

We’ve paid the Beast down to $311,800 but it’s nowhere near where we hoped to be at this point and we’ve slammed on the brakes on extra payments since my job is unstable. Adding to the pile, my parents had an emergency plumbing problem they couldn’t possibly afford to fix. My dad had his income reduced by 50%. We covered the cost of the parts and materials and my husband did the work. When they asked how much the parts cost, we told them $100 (my parents would NEVER accept $0 as an answer). They have no idea it wasn’t anywhere near $100. Considering how much they watch my kids, we consider it cashing in on a lot of IOU’s we’ve written them over the years.

The Beast won’t be getting smaller for months.

There is some good news coming from this. I’m gaining perspective. I’ve paid off my debt (TWICE) and I felt a little judgmental of those who couldn’t do it. I mean really, what’s the big deal?!?! Spend less than you make! But as we start to tackle this huge Beast and it feels like I’m gaining zero traction, I’m understanding why people give up. I’m understanding the lack of motivation. The frustration. With a huge debt to income ratio, it’s a hard mountain to climb.

I refuse to quit…but I’m tired right now. Sometimes, you’re going to get tired.

Just.

Don’t.

Quit.

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