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Hope’s Debt Update – End of July, 2020

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As we end the last month of summer, we are tightening our belts again. And heading into a no or at least minimal spend month. Beauty and Gymnast start back to school within the week while Princess’ school has delayed their start date until the end of August.

I’m not sure what is going to be required as far as school supplies go so I’m staying a little flexible on that. Otherwise, we are planning for a typical no spend month…our groceries and household supplies are well stocked, we are as planned as we can be with the unknown of school and COVID-19 around us. I for one am ready to get back into the school routine…especially since I no longer have to drive kids to school on a regular basis!

And I am super excited about my debt update…I have been on it!!!

Creditor
Original Debt
Last Update
Current Balance
Interest
Min. Payment
Student Loan #1$17,000.00$8,993.60$7,460.012.88%$0
Student Loan #2$21,750.03$19,536.55$19,433.432.88%$0
Honda HRV$21,200.00$17,335.27
$17,128.61
3%$250
Total$59,950.03$45,865.42$44,022.05$250
I even paid a bit more toward my student loan than I thought I would be able too. And it feels so good.

Tuition – almost paid!

At the same time, I have been paying a bit here and there towards Princess’ tuition. I only have $400 more to pay and her entire senior year will be paid for. Woot, woot!

I’m still not clear on what “senior” expenses will look like, but I am confident that I have the savings to cover it in my slush fund so will not be including it in my ongoing budget any longer.

Moving Out

Sea Cadet will return from his summer as camp nurse in Virginia in the next couple of days. He still has his part time job here as an EMT for our local county. And anticipates having a full time firefighter/EMT job for the next county over within the month.

The hiring manager was his instructor during his EMT program. And plans to have an in-person interview before finalizing an offer. With that being said, Sea Cadet is planning to move out immediately. He will be moving into a spare bedroom in another firefighter’s home. This has been planned since early in the summer. We are all excited about this big step for him. (And yes, I am a bit relieved that we don’t have to squish one more person into this house.)

With Gymnast staying, the two girls and History Buff and I…let’s just say it’s a bit tight. (But we would make it work if we had too, we are good like that.)

History Buff has moved into the living room, giving up the small single room for Gymnast in anticipation of him moving out as soon as he finds a place/roommate situation. This was decided some time ago, if Gymnast was to return, and I didn’t want a big upheaval once school started.

Moving Up Our Loan Payoff Date

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We made our first automatic student loan payment last week for the first time since we entered forbearance in March for the pandemic. It went through on the 22nd like usual, but I noticed afterwards that it wasn’t the usual amount.

Instead of $2,302.49, it was $2,268.04. I guess we should be grateful it didn’t catch us off guard by being more, but why $34 less?

Re-Amortizing Win

I contacted Earnest, our student loan company, to understand why. They said, “Our servicing platform will re-amortize loans that have any sort of payment protection applied, such as forbearance, deferment, skip-a-pay, etc. This is to ensure the minimum payment does not cause any borrower to make more payments than what was chosen in the original loan agreement, essentially exceeding the terms of the loan. Since you had forbearance for a few months, your loan was re-amortized upon exiting forbearance.”

Ah, gotcha. But here’s what they wrote that made my heart sing: “However, you’ve made extra payments which meant that your minimum payment didn’t increase like it does for most people who miss payments, but rather decreased.” It’s nice to know that this forbearance didn’t make matters worse for us!

I’m going to change our auto-pay back to $2,302.49, and keep trying to make extra payments each month. But all this got me thinking about payoff dates.

Calculating Exact Payoff Dates

I use a calculator on NerdWallet.com to see how many months until payoff. I wondered what would be the difference in payoff time if we went with that lower number and made no extra payments. After all, it’s only $34.45 difference. And this time, I figured out WHICH month of WHICH year.

Our principal balance is currently $282,386.71.
– If we paid $2,268.04, the payoff date is in 165 months, or March of 2034.
– If we paid $2,302.49, the payoff date is in 162 months, or December of 2033.

So three months. Not a huge deal. Heck, last July we were still making infinite payments, only paying off interest and rarely any principal. By August 2019 our payoff date was down to just 667 months, or 55 years, 7 months. We would have paid it off in 2075 when we were in our 90s. OH MY GOSH.

Sara's Student Loan Repayment History as of July 2020

But in the end of 2033, we’ll have a 23-year-old, 21-year-old, and 19-year-old. Our kids will be moved out and we’ll be in our 50s. I know it’s better than being in your 90s, but I just don’t want to wait that long to be student loan debt free!

Moving Up that Payoff Date with Extra Payments

I found this cool calculator on DaveRamsey.com that unlike NerdWallet, it includes the month and year of your loan’s Payoff Date. It will even produce your Full Payment Schedule. The greatest part, I think, is it also calculates what happens if you make extra payments. It compares your current timeline to the extra payment timeline.

So I calculated what would happen if we paid $500 extra each month on top of the $2,302.49:

Payoff Calculator with Extra Payments

 

We’d pay it off 3 years earlier in December of 2030, and we’d save $21,659.85! Dang, ya’ll.

Knowing the actual payoff dates makes this more concrete and real. I’m feeling a fire lit under me right now. I don’t want to be messing with this loan in the 2030s. We’ve already shortened our payoff schedule, and now I want to shorten it even more.

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