Apr 27

My Current Assets and First Steps

I figured that another good way to start off would be to currently say what I actually DO have, maybe also a slightly more positive topic for myself too! In high school and throughout college, I tried to save as much as possible. I paid off my car in full and I have never carried a balance on my credit card. I now own a rewards credit car that I put almost everything on except for gas. That card gets fully paid off whenever my bill is due so that I don’t have to pay any interest. Might as well take advantage of that 1% cashback, right?

Other than my massive student loans, here is what I current have in my bank:

  • Checking Account: $2,000
  • Savings Account: $22,000
  • CD: $550

Now I know that most people reading this are probably going straight to my savings account and saying that I have way too much in there, and now I would fully agree with you. I only have an interest rate of 0.90% in my savings account. I plan on lowering my emergency fund to $15,000 and maybe even $10,000 while I am still living at home.

Next month for my loan payment I fully plan on paying off  ‘Private 3’ loan for $3,067 @ 7.92% on top of making my regular loan payments for the month. This will bring my emergency fund down to $19,000 which I’m still perfectly fine with at this time.

For retirement savings I currently have:

Employer 401k: $3,186
Roth IRA: $5,548

I’m currently contributing 6%  to my Employer 401k, and they match with 3% – the max matching I can get at 50% of employee contribution up to 6%. I’ll take that free 3% and I’m fine with my 6% contribution while I’m still paying off my loans. I maxed out my Roth IRA this year, pulling from my savings account. The money probably would have been better off going into a loan because that’s guaranteed making 7.92% interest while the chances of my Roth doing better than that are pretty low. Maybe it’s just the psychological aspect of starting to save that I enjoy though, similar to to my problem of keeping too large of an emergency fund for my current situation.

Photo Credits for this post: Ruth Bourne @ Veezzle
Apr 27

Starting A Monthly Budget

In order to figure out how fast I can pay off my loans and how much money I can allocate to actually paying them, I figured a good idea would be to create a monthly budget to see what I absolutely have to pay each month when it comes to my income vs. spending. Having a budget right in front of me (as well as keeping track of weekly expenses on entertainment and other things) will help me see how much money is being wasted on things I don’t really need.

I currently make around $2,800 a month in take home after taxes, 401k contribution, medical, etc.

My bare minimum budget for a month would look like:

Item Amount
Income $2,800
Rent ($100)
Car Insurance ($110)
Cell Phone ($20)
Gas ($75)
Gym ($20)
Entertainment ($100)
Total $2,375

 My ‘rent’ is currently $100 that I give to my parents for now, I’m taking advantage of living at home with these huge amounts of loans. Sometimes it can suck still living at home, but I’m definitely grateful of having a place to be instead of being forced to spend $800-$1200 a month on somewhere to rent.

Car insurance is around $1300 a year. I make an initial payment of $300 at the end of July and then I make a payment of $110 for 9 other months, with 2 months of paying nothing. Being under 25 as a male sucks for car insurance, and being in the Northeast makes my rates even higher. That’s with 0 traffic violations as well.

Cell Phone is $20 to my parents each month to pay for my line, I currently just have a feature phone. Ton of minutes and unlimited texting. The local gym is $20 a month, which i totally see as worth it.

Gas is around $75, but that could easily be higher if prices start to go up. My girlfriend is still in college and is about an hour and a half away, so that definitely increases my gas costs but is obviously 100% worth it! Entertainment will obviously fluctuate depending on the month as well but I would like to stick as close as I can to that target most months.

This leaves me with $2,375 money after my mandatory expenses each month.

For my private loans, the minimum payment is around $600 a month and for the government loans the minimum payment is around $300. I have been trying to pay more than that so that I can make a bigger dent into the principal each month. Interest really sucks! My next post will hopefully go more into detail about my plan of attack in paying these loans off.

Photo Credits for this post: Tax Credits @ Veezzle
Apr 24

Who I Am and How I Got Here

In my first post, I really just wanted to give an overview of my current student loans and maybe that was actually more for myself as opposed to you – the readers of this blog. Well, now I am going to tell you a little bit (maybe a lot of bit) about myself.

I’m currently 23 years old, recently graduated from school last May. I currently live in the Northeast, and I will admit that the cost of living does suck here. I’m quickly approaching my first full year of working full time post-graduation! Time definitely flies…when you’re having fun…when you’re paying off loans. Ha ha – the complete opposite in reality, but don’t get me wrong – it’s not like I don’t stay positive. I try to remain optimistic and enjoy myself as much as possible.

Back to my story…upon graduating, I had already accepted a job offer near my home for $50,000 annual base salary. I was very excited, as I know the job market has been really rough. I attended a private university with a good reputation, I had received a large amount of merit-based scholarships and compared to the few state schools I had looked at offered me much less so the cost of attending was ‘only’ the difference of a few thousand, and I figured the school’s reputation would easily pay for that difference.

I may have ended up being right about school’s reputation, and I don’t regret my decision at all. I had a great time at college and it was a great experience. I do regret the amount of debt I have taken on, which probably could have been reduced by going to a community college for 2 years and then transferring to a state school for little to nothing.

I was one of those people that just assumed that you had to go to college, you had to get this debt and it just kind of disappears once you graduate and get a job. I just clicked through the loan application and signed my life away, not realizing the consequences. I had nobody to go to ask in my family, nobody had gone to college before me. I just pretended that the debt wasn’t there as I took out another loan for each year.  I didn’t realize the absolute scale of all the money I was borrowing, or the amount of interest that would be piling up!

But I don’t like to dwell on past decisions, and now it’s time to execute my plan from where I’m currently at. I absolutely DID want to go to college, and I graduated with a degree with Technology in Business and I’m working at a great company with great people. I hope you will join me on my adventure as I work to eliminate this debt, and maybe we can even share some tips and advice with each other.

Photo Credits for this post: anshustock @ Veezzle
Apr 24

The Beginnings of a Debt Journey

Where do I start? That’s a question I’ve been asking myself pretty often and one that I will be trying to tackle throughout the course of this blog. I have a huge amount of student debt, one that makes me cringe and nervous to look at as I make the payments for these loans. I’m hoping that you will be able to follow me along on this debt journey. Maybe we can learn a few things from each other and pay off our student loans together.

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