The 2015 Goal ($91,493)

This is a big goal, but here it is: I want to pay off $20,000 in student loan principal in 2015. In 2014, I only reduced by about $8,600, but here’s why I think it may be possible:
– Now that I’ve refinanced my largest loan, I’m paying less interest, and a higher monthly payment each month (because I switched from a 25 year term to a 15 to get the lower interest rate). Of my $555 monthly payment, over half goes to principal. For all of my loans, my current payments reduce principal by about $700 a month. ($8,400 for the year)
– My balances are, slowly but surely, going down. I hope that my bonus is big enough that I can pay off UG4 and (fingers crossed) a chunk of UG5 in February. This will free up $225 a month to start going to my “law school loans” at 5% (the refinanced loans are also from law school, but aren’t services through ECSI). Lower balances–especially reducing them towards the beginning of the year–mean marginally lower interest payments. Even if this results in only $10 more a month going to principal, it’s still something–I’m never going to pay more interest than I’m currently paying because all of my rates are fixed.
– I’m hoping for a small raise. I may bump up my 401(k) contribution a little, so I’m not expecting much more per paycheck, but maybe for the year this will mean another $500 towards my loans.
– My mortgage payment gets rounded up to $1,400 a month. I pay this whole thing from my paycheck, and have been saving the $700 a month we receive from our tenant as a “House Emergency Fund.” Now that the fund is a decent size, I’m going to start putting some of this money towards my loan. I hope I’m being conservative in figuring I’ll be able to put $4,200 of this towards my loans.
– We’re having our wedding ceremony this year. I’m putting a lot of money towards this that could instead be going towards my financial goals (but not planning on going into any further debt). My tax return, most of my bonus and some savings are earmarked for this. But everyone tells me I can expect to receive a bunch of monetary gifts. I’m not planning on relying on any kind of number here, but I will say that most of any gifts we receive here will go towards my loans.
– Lastly, since we bought the house and moved in together, we’ve been a one-income household. I’m optimistic that this will change in September. The man agrees that paying off my loans is a big priority, and we’ve successfully been living off one income this whole time, so I expect that about half of his take home will go to my loans. Because we both had chunks of time where were weren’t contributing to any kind of retirement plan (him while he was either not working or in school, me while I was either irresponsible or in school), I’d like to really step up both of our 401(k) contributions once he’s working again to try to make up for some lost time. Again, because we haven’t been relying on this money, I’m hoping we won’t miss it.

So that’s my goal, and I’m now accountable to the whole blogosphere. I might look into adding some kind of progress tracking bar to the bottom of my posts throughout the year. Any thoughts on how to do that are welcome!

Advertisements

5 thoughts on “The 2015 Goal ($91,493)

  1. I love this post! I too have a student loan that started out over 100,000 (and it was all undergrad- darn those private universities!) and I’ve just about killed off my smaller loan and have been tackling the big one for some time. Thanks for your honesty and for breaking down all the numbers for us. I know you can do it!!

  2. After tinkering around, I created some html that you can add to the bottom of your posts to insert a progress bar. Contact me at tim.mcmurdo at apprisen dot com and I can e-mail it along with an explanation to you.

  3. Sounds like a great goal for 2015! Knocking off $20K in a single year will definitely create great momentum to debt freedom! 🙂 We would love for you to join The $1,000,000 Challenge http://wp.me/p5sK1l-KK, over on my blog. 🙂 Best wishes to you in the new year!

  4. Exciting! You broke down your student loan debt repayment in much the same way that I did, and I’m looking to pay down about the same amount as you in 2015. Good luck!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s