2011 Debt Update and 2012 Resolutions

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Happy New Year everyone! Last year sped by so fast, and although I do not feel like I made much of a dent in my students loans over the year, I did hit a major goal and my networth is slowly increasing.

So as I’m reflecting on the past year and making personal resolutions, I figured this is a good time to think about financial goals and what plans I can make to eliminate my debt.

Looking back at 2011

The year started out on a positive note with two part-time jobs, one of which eventually became a full-time job with benefits, finally ending two years of under and unemployment. With my new regular income, I started getting serious about paying down my ridiculous student loan debt.

Here’s what I’ve achieved:

  • Monthly payment amount dropped from $1024.70 to $996.97.
  • Paid $7100 towards my principal, dropping my private loan about to $91K.
  • Rebuilt my emergency savings from $300 to $2400.

I’ve made some good progress this year and I’m happy. Obviously I’d love to do more, but with my income, this was the most I could do for 2011.

Goals for 2012

I have a few very lofty goals for 2012. I don’t entirely expect to reach them unless I have some unexpected (positive) surprises, but I figure that if I work as vigorously as I can towards these two goals, whatever outcome I get (even if I fall short) will be fantastic.

Goal 1: Reduce my private student loan debt to under $80K.
I’m currently owe Sallie Mae about $91K. Though $11K seems like a small amount, my interest rates are high, and if I make just the minimum payments each month, only about $350 goes towards my principal balance. So for 12 months that’s only $4200. I want pay off more than double that, which means a lot of extra payments from me.

During 2011, I paid about $7100 towards my principal, so the goal isn’t too unreasonable. I just have to focus all extra money I have in my budget towards paying on this debt.

Goal 2: Reduce my monthly payment amount to less than $900
I slayed my 2011 goal to reduce my monthly payment amount to below a grand, but this goal isn’t quite so easy. During 2011, I reduced the amount by $27.73. To hit $900, I’d have to reduce it by about $97, more than three times what I did last year.

Will I meet this goal? Doubtful, but I think I can achieve a lot with the right mindset. An interest rate drop would help too, but I haven’t had one of those since 2008, so I won’t hold my breath.

Goal 3: Increase emergency savings to $3000
This is achievable. I had to give myself one easy one. I plan to contribute $50 a month to my savings, plus 25% of any bonuses and refunds I get during the year (the other 75% will go to my student loans, of course). Just my monthly contribution will get me to $3000, so everything else is just gravy.

What kinds of goals do you have for 2012?