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:
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.