This month I threw a lot towards my student loans ($4971.00). The $971 is my minimum monthly payment, and the additional $4000 was due to my tax refund. There are differing thoughts behind putting in more money throughout the year from your check, and receiving a tax refund versus putting less in, and breaking even or potentially owing. Now that I’m being more intentional about my money, my goal is to break even. The government should definitely receive the tax money I owe, but they don’t need to keep an additional $4000 interest free for me either. This breaks down to approximately an additional $333 extra per month that I could be putting towards debt monthly. That being the case, I will be adjusting my withholdings in hopes that I can bring home more monthly and potentially putting these extra funds towards my debt. I also will be stopping my 401k contributions and taking that additional income and putting that towards debt also. This would allow me to have closer to an additional $500 towards my student loan debt. Starting in April, my minimum payment of $971 will be adjusted to $1500 (original payment of $971 plus $29 more dollars out of my budget, and an additional $500 for tax adjustments and stopping 401k contributions).
As of April 3, 2017 I owe $76,013 left on my student loans. Another area of savings I have been considering is having my payments to be automatically deducted saving me .25% interest monthly. This is an area of fear stemming from the fact that I don’t really like anyone having that type of access to my accounts. However, the monthly savings are something I’m willing to see if it makes a difference, especially considering I’m accruing approximately $16 daily in interest. I’ve been brainstorming ways on how can I achieve the goal of being completely student loan debt free by December 2018. The reality is I won’t just stumble into it. I have to have a clear plan in place, and make my daily decision making based on that plan. Right now there are 20 months and 27 days left before the payoff date. That’s approximately $3620/month that I would need to throw at the debt to reach the goal. I have almost half of the goal monthly ($1500) that I can manage now to put towards the debt out of my monthly income. I now have to figure out how can I generate an additional $2120/month or come up with the additional $44,500 needed to reach the goal by December 2018.
If you’ve had success generating additional income to put towards your debt definitely leave a comment.