Welcome to my July 2019 student loan debt progress!

If you are new here, every month, I post the progress I’ve made on paying off my student loans. I’ve done this since I first started paying down my loans in July 2017 and it has been so worth it.

I do this to hold myself accountable and to share my debt progress with others who are also facing debt payments of their own.

Debt paid this month: $6,190.89

Debt remaining: $71,783.04

I house every month’s debt progress from the very beginning here if you want to check out the progress so far.

Debt Updates for This Month

So it’s official! Exactly 2 years since I started this mission to pay off my student loans back in July of 2017, I have paid off $100,000 worth of student loans! 

Told you I’m a summer girl. Summer has always done me well. 

If we’re getting all technical, I’m actually  ~$400 short of having paid off $100k, but for the big picture round up, I started with $171,000 in July 2017 and now I am down to $71,000!

Of course, in reality I’ve made more than $100,000 total payments. Since my first student loan payment I’ve actually contributed $106,195.

So really I’ve washed more than $6,000 down the drain to interest payments.

Honestly, this number would have been much bigger had I not applied for the REPAYE program which is why I highly recommend it. 

In 2017, I had just graduated and was pretty much making zilch that year which allowed me to use my 2017 tax return to apply and quality for $0 minimum payment in 2018 and get interest subsidy. This meant that for the whole year, the interest on my subsidized loan were fully covered and half of my interest on my unsubsidized loan were also covered.

Plus, all interest accrued would not be capitalized and added onto my principal balance every month.

As reference, when I first started entering repayment around December 2017 after finishing up the grace period, I was quoted ~$600 minimum payment on a 25-year-extended-graduated payment plan. The representative I spoke to actually told me this minimum payment wouldn’t actually be enough to cover the interest I’d be accruing each month which was ~$650.

Imagine if I kept paying that minimum with that accrual rate. I’d have accrued $650 x 24 months = $15,600 today in interest.

And since that’s not even enough to cover my interest every month, I’d have made NO DENT in my student loans.

I’d actually be over $171,000 in debt and have thrown away $15,600 in the last 2 years and have nothing to show for had I followed the plan that this representative had laid out for me.

Paying off my loan aggressively was always part of the plan but I am glad I stumbled upon the REPAYE program. And to think I only did more research on it after I was laid off and was looking to lower my monthly payments while I find a new job.

I guess it’s true, some things really do happen for a reason.

So let’s check out this massive $6000 payment I made this month. It was all due to me cashing out some of my Robinhood investments after a huge rally mid-July. 

I talked about my love for Robinhood here but I am also looking to move my investments to index funds for a more passive growth with less volatility. 

Especially now that I am on the lookout to buy my first home (goal of 2020), I am looking to take out my volatile positions on Robinhood and hoard cash or only invest in index funds. 

July Budget

Fixed Spending

Nothing much here, just the usual expenses. I live at home but pay rent to my parents and am also paying back my personal loan to them at $500/month.

Other than that, my cell phone bill and Netflix make up the rest of my fixed spending.

Variable Spending

Ugh, I’m way over-budget again. I had some expenses due to a friend’s wedding and dining out with some friends who came into town for said wedding.

I also made some travel booking for a Labor Day Weekend trip.

Last month, I wrote about feeling down and trying to combat that by enjoying life more even if it means having to spend more.

I definitely did the “spend more” part this month, but I don’t believe that spending more = key to happiness.

While I will still allow myself to enjoy life a bit more even if it means spending more, I will definitely be more cautious of my budget next month.

Other

Booking my Labor Day trip definitely got me over-budget. The other item on my Other list is actually renewing my domain for this blog!

I must say, having had this blog for 2 years now, it has been so worth every penny.

It’s therapeutic, fun, and motivating for me to write about some of these topics, especially money issue, that sometimes is still taboo to talk about openly in real life.

Investment

I maxed out my Roth IRA! This was mostly just from pulling investments from Robinhood into my Roth.

I decided to put $3k all at once and max out my limit for 2019 so I wouldn’t have to worry about it and can focus all my efforts on paying down my student loans and saving for a home.

Goals for Next Month

I am conflicted when it comes to my August goals. On one hand, I really want to keep putting down at least $2,500 to student loans each month.

If possible, I’d like to put down $3000 per month and be in the $50k’s by end of the year.

And yes I’m aware, this is already a modified goal from my beginning of the year stretch goal of getting to the $40k’s by the end of 2019. But hey, that’s what a mid-year assessment is for right?

Realistically since I’ll be putting my day to day expenses to my 0% APR credit card until next year, I should be able to put most of my take home pay to my student loans.

The only damper to that plan is that, I want to buy a condo! This has been a dream of mine since this post from the very beginning of 2018. 

After 2 years of living at home, I can honestly say I’m ready to move out.

As I currently have no significant other, I plan to buy a very modest 1 bedroom or studio condo. 

Anything bigger would just be a hassle for me to have to spend to decorate and clean.

In the event that I start a family in a couple of years, I will most likely use the property as a rental so I am not as worried about finding my forever home.

I just want a cozy home to finally achieve my dreams of living on my own at the last stretch of my 20s.

What this all means is that I have to up my saving game! Or more correctly, start a saving game since all I’ve done for the past 2 years is pay my student loans.

My hope is to find a home in the <$300k range (I think I’ve said it before, I live in a HCOL area) which means I need to save at least $60k to cover my down payment and extra costs for the buying process.

When the time comes, I do plan on pulling my Roth IRA contributions which I’ve maxed for the 2018 and 2019 year which means I have $11,500 saved up right now. 

Starting my next paycheck I plan to automatically deposit $500 to my savings account for a total of $1000/month saving.

The problem is, when I do the math, if I save only $1,000 to my savings account each month for the rest of the 5 months left this year, I’d only have $5,000 + $11,500 = $16,500 saved up by the end of the year.

This is far from my $60,000 goal which would take me almost another whole year to save up for. Taking into account that the actual buying process will then take several months, very likely under this approach I wouldn’t have a home till 2021.

And that’s simply unacceptable in my eyes. So I am still debating on the best approach to balance paying off my student loans and saving up for a new home.

Guess you’ll just have to wait till next month to find out what I decide to do!