Author Topic: Student Loan Challenge (2019 Edition)  (Read 658 times)

marblejane

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Student Loan Challenge (2019 Edition)
« on: December 31, 2018, 04:57:43 PM »
I'm killing the student loans this year....who's with me?

Current balance: $19,885.67 (variable rate, 4.68% and rising)

Background:
Graduated MBA program in 2013 with ~$160k in student loan debt (plus an underwater mortgage, and some credit card debt)
Found MMM a few months later, buckled down, maxed out the 401k, sold the house, paid off the credit cards, refi'd the student loans

Plan:
Make regular $865/mo payment, put 100% of any annual bonus (due to be paid in March) to loan balance, and cash flow the remaining amount.

zeli2033

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Re: Student Loan Challenge (2019 Edition)
« Reply #1 on: January 01, 2019, 11:15:39 AM »
I'm in! Bringing over my stats from the 2018 thread.

2/28/18: $63,221 [Starting Balance]
3/8/18: $62,846
3/20/18: $60,722
4/2/18: $59,399
4/18/18: $58,372
6/30/18: $ 58,175
7/13/18: $ 55,929
8/12/18: $54,868
8/15/18: $53,821
9/5/18: $52,622
9/18/18: $50,941
10/2/18: $46,212
10/17/18: $42,804
11/6/18: $40,746
12/4/18: $38,695
12/31/18: $36,419

We just made some adjustments to our 2019 retirement contributions to kill these a little sooner - if things go according to plan, hoping to have them paid off in April 2019.

haypug16

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Re: Student Loan Challenge (2019 Edition)
« Reply #2 on: January 02, 2019, 02:11:05 PM »
I'm in! Thanks for starting the 2019 thread.

Beginning Balance:
January 1st 2019 - $46,919.36

Goal for the end of the year is to pay off $17,000 and finish around ~$30,000. Depending on how much my bonus is this year I may be able to pay off a few grand more which would be great.


mckaylabaloney

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Re: Student Loan Challenge (2019 Edition)
« Reply #3 on: January 04, 2019, 12:17:23 PM »
I'm starting at:

1/1/2019: $146,280.17

If that sounds terrifying, just know that I started at more than $213K in 2018, so $146K is nothing! Just kidding it's a horrifying garbage fire BUT I am feeling good about the progress I've made. I'm not sure whether I'll do as well this year -- (1) I need to spend the next couple of months building up my emergency fund rather than paying down debt, and (2) most of last year's debt paydown came from my year-end bonus, and assuming I get a similar bonus this year, I may need to use it for other goals. (I might switch jobs and/or leave my current city in 2020, so I may need that cash for something like a down payment -- long story but given certain elements of my law school's loan repayment assistance program and other life and housing market details, buying a house in the location I'm most likely to settle in would probably be the wisest financial choice even if my loans are still in six-figure territory.) So! I'm going to set a goal of paying off $20K without considering my bonus, and then hopefully I will also have some funds to spare from my bonus.

I've been considering eliminating my 401k contributions this year (we don't have a match, just profit sharing that occurs whether or not I contribute) and devoting that money to my loans, but it's tough to think of sacrificing like $6000 more to taxes (plus missing out on additional gains over the years, etc.). The reason I'm thinking about it anyway is that it's a very very high priority for me to have the freedom to leave my current job in the next year or two, and in all likelihood my next job will pay less. So obviously the less debt I have, the more freedom I have to switch careers.

Another option is to eliminate my monthly contributions and then see what kind of bonus I get and what my 2020 cash needs might be, and potentially just max it out for the year out of my bonus.

Where have you all landed on investing vs. paying down debt?

Jim Fiction

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Re: Student Loan Challenge (2019 Edition)
« Reply #4 on: January 04, 2019, 07:56:33 PM »
Hi all. I graduated from the 2018 thread back in September, but I wanted to pop in and wish you all the very best of luck in the challenge this year!

zeli2033

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Re: Student Loan Challenge (2019 Edition)
« Reply #5 on: January 05, 2019, 07:20:59 AM »
Where have you all landed on investing vs. paying down debt?

Last year when we were looking at the math to determine what to do, the math definitely said for us to decrease 401K savings and increase debt payoff but it was simply more emotionally and psychologically appealing to max out retirement while still doing damage on the loans.

This year, we just decided to decrease our 401K contributions to the employer-match levels so that we could accelerate the payoff of these loans. We have some other life stuff to plan for that the eventual and additional cash flow for 2019 will help with once we've paid these off in Spring. Still hard to swallow given the stock market being on sale but it's the right move for us...and if all goes to plan, it will be the last time we have to make that decision :)

Malkynn

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Re: Student Loan Challenge (2019 Edition)
« Reply #6 on: January 05, 2019, 08:23:54 AM »
~$80,000 in student debt remaining here.

That's down $340K from a combined starting debt of $420K between DH and I in early 2014.

I'm not in the US and my "student debt" isn't federal, it's always been with a private bank, and it's now technically a professional loan. I can make additional payments, but my monthly payments stay mandatory until it's gone. No flexibility.

My rate is ~3%, my minimum payments are $2400/mo +interest. If I only make minimum payments, it will be gone in 3 years. I could pay it all off 1-1.5 years sooner if I threw everything at it, but it's not worth it.

Until last year, a big chunk of our combined debt was higher interest smaller loans and LOCs, so we put almost everything towards those and have saved very little- less than 100K, but this doesn't include DH's pension contributions.

Now that we're down to 5 digits of low interest debt with no real benefit for extra payments, we're DEFINITELY now focused on investing over accelerated debt repayment.

My tax rate is fairly high, so even though there's no "match" because I'm self employed, the tax savings are still worth it.
Plus I'm pretty sick of throwing everything at debt, I am far more motivated at this point to actually have some money and have it start working for me.

When it comes to the pay-off-debt vs invest debate, go with whatever motivates you most. For some people, tackling the debt motivates them to throw every spare $5 they have towards it. Examine what motivates you most and plan from there.
« Last Edit: January 05, 2019, 08:27:38 AM by Malkynn »

Cool Friend

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Re: Student Loan Challenge (2019 Edition)
« Reply #7 on: January 05, 2019, 08:52:01 AM »
I'm in!

As of Monday, I'll have $7,000 remaining at 5.125%, coming from $20,000 in January 2018.

To slay it, I'll need to put in $583 a month, which I think I can do!  I'll be debt-free if I do, to boot.

appleseed

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Re: Student Loan Challenge (2019 Edition)
« Reply #8 on: January 05, 2019, 12:22:12 PM »
Copying over from the 2018 thread:

DB1 - $1,467 @ 3.25%
DB2 - $1,569 @ 3.25%
N1 - $3698 @2.625%
N2 - $3231 @2.625%

Total as of 12/30/2018 - $9,965!! These are my husband's graduate loans from *ugh* 2005 (I took over finances once we got married in 2010, so I'm not positive about total to start but probably $80k ish).

As of today -  Goal was to have them paid off by July 2019, which is doable at the rate I paid them this year. Unfortunately we do also have $27k in a personal loan from my mom that is next in line for paying off that may be prioritized for the overpayment above the two navient loans. I'm still planning on snowballing the payments from d1 and d2 to n1 and n2 though. The goal of getting rid of the student loan debt in 2019 continues though hopefullyby the end of the year unless we get a windfall. The first 2 I'll pay off by my husband's birthday in April (that's his present lol).   

We are doing uber frugal January and meal planning, etc. more than usual to squeak anything extra to throw at our debt.

Happy New Year! Let's destroy debt in 2019.

outdoorsyfreedom

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Re: Student Loan Challenge (2019 Edition)
« Reply #9 on: January 06, 2019, 06:28:18 AM »
Im joining this challenge! I was hopinng to do this anyways and I think the accountability will help.

Current balance: $58,245 at 3.15%. I have refinanced my loans twice to get to this rate

This is down from about 190k when I graduated from pharmacy school in 2015. I have always paid extra over the minimum payments, although how much extra has slowly increased overtime. At my current rate of payments, I will have these paid off by the end of November. Ideally, I will get this paid off sooner.

I noticed some thoughts about investing vs. paying off debt and I just thought Id share mine. Both my husband and I max out out 401ks, but other investments have been minimal. To us, the mental stress of this debt, especially when it was such a high amount to start, has been a motivator to pay off  the debt over investing beyond 401k. Of course, after it is gone, most of what we put towards the payments will be put in investment accounts, some as extra towards our mortgage, and some put aside for house improvements we would like to do.

Good luck to you all!

mckaylabaloney

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Re: Student Loan Challenge (2019 Edition)
« Reply #10 on: January 07, 2019, 10:18:34 AM »
When it comes to the pay-off-debt vs invest debate, go with whatever motivates you most. For some people, tackling the debt motivates them to throw every spare $5 they have towards it. Examine what motivates you most and plan from there.

Thanks to you and everyone else who's weighed in; this is helpful.

My strategy for the past year+ has been to max out my tax-advantaged accounts, then throw everything else at my loans, and I think I'm going to stick with that for now. I know I would look back and regret having passed up the opportunity to contribute to my 401k (especially since I wasn't able to start a 401k until I was nearly 30). Ultimately, I'm willing to hang onto my debt a touch longer if it means retiring a little sooner; hopefully that choice won't have a material impact on my near-term options.

UnexpectedExpenseExpector

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Re: Student Loan Challenge (2019 Edition)
« Reply #11 on: January 07, 2019, 05:04:50 PM »
I'm in!  Bringing over progress tracking from the 2018 thread.

2018
Jul: 34,235.29
Aug: 31,126.76
Sep: 30,670.30
Oct: 29,554.17
Nov: 26,987.46
Dec: 25,869.79

2019
Jan: 23,886.93
...

2019 Jul: 0.00 (GOAL)


The goal is to knock these out by end of July.  We are also aiming to max all tax advantaged accounts for the first time in 2019 so this goal may slip a bit to make sure the tax advantaged accounts get topped off. 

Good luck to all!

TyGuy

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Re: Student Loan Challenge (2019 Edition)
« Reply #12 on: January 13, 2019, 11:26:30 AM »
Hello,

Thanks for starting this thread, I will be sharing my progress, hopefully paying off my loans by the middle of 2020 (depending on if I land a new job that I am currently interviewing for). Additionally, I will be making a minimum payment of $1000 a month (self-enforced minimum, actual is ~$350), adding whatever additional funds I have to the principle.

1/12/19:
NGA $3,751.61 @ 3.86%
NGB $811.80    @ 3.86%
NGC $4,779.69 @ 4.66%
NGD $2,397.55 @ 4.66%
NGE $5,814.59 @ 4.29%
NGF $2,271.61 @ 4.29%
NGI $5,520.77 @ 4.45%

H1&2 $18,415 @ 5.00%

Total: $43,762.76


I am excited to knock these loans down significantly this year and look forward to tracking my progress with you all!

bbates728

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Re: Student Loan Challenge (2019 Edition)
« Reply #13 on: January 14, 2019, 12:50:35 PM »
Hi everyone! Finally a thread that makes sense for me to contribute to :). Let's get these suckers paid off!

A little background: I am a 25yo CPA that moved to a HCOL last year and found MMM in July. Since then I have read the blog and made WAY too many spreadsheets. I am just now starting to make a foray into the forums. My wife and I have been frugal by nature throughout our marriage and have thrown money at these loans which started at $110-$120k but we didn't keep as good of track of them as we are now. These loans are entirely mine but my wife has no issue with working together to take them out. Her schooling was thankfully paid for by her parents. I have been out of school for a little over 2.5 years. Together we bring home roughly 97k after tax and 401k. We budget to put $4k to loans each month and put any surplus from our budgeting towards them as well (this month an extra $500!).

July '18: $70,870.81
Aug '18: $67,102.62
Sep '18: $63,319.24
Oct '18: $59,834.55

Goals:
Dec '18: $51,674
Dec '19: $4,712
Jan '20: $0

TLDR: Loans are stupid and we will get rid of them.

Let's keep the good times rolling. I moved across town in December so had less capital to use for loans to end the year. You will see that I recouped a large portion of those expenses in January and was able to right the ship plus a little extra.

 Note: I am changing my reporting method to show balance after each month's payments instead of the balance at the beginning of each month.

Nov '18: $55,479.02
Dec '18: $54,781.60
Jan '19: $43,620.29

New goal Nov '19: $0

PS: How do I end a bolded section?

haypug16

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Re: Student Loan Challenge (2019 Edition)
« Reply #14 on: January 14, 2019, 01:28:14 PM »
@bbates728
[/b] - ends the bold section


I'm changing my goal this year from $17,000 to $10,800. I will be putting more money towards maxing out my 401K. If I happen to do that and then have a bunch of money leftover (not too likely) then I'll put it towards paying more of the SL but the plan for now it to just pay the minimum which is about a little over $900 a month.

zeli2033

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Re: Student Loan Challenge (2019 Edition)
« Reply #15 on: January 15, 2019, 05:22:09 AM »
Solid plan, @haypug16 - I really enjoyed reading up on your Ask A Mustachian thread about coming to this decision!

zeli2033

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Re: Student Loan Challenge (2019 Edition)
« Reply #16 on: January 15, 2019, 05:25:13 AM »
2/28/18: $63,221 [Starting Balance]
...
12/31/18: $36,419
1/15/19: $32,900 (-3519)

Hoping to make another similarly-sized payment at the end of this month. Currently on track for payoff in April.

haypug16

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Re: Student Loan Challenge (2019 Edition)
« Reply #17 on: January 15, 2019, 07:37:20 AM »
Solid plan, @haypug16 - I really enjoyed reading up on your Ask A Mustachian thread about coming to this decision!

Thanks, I always forget about that section of the forums. I'm glad I remembered and decided to ask. I think it's going to make a big difference with my overall financial plan.