2012 Student Loan Debt Update and 2013 Goals!

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Happy New Year everyone!

So, 2012 is over, and what a crazy year it was. I’m not sure how it passed me by so fast. The last half of the year was very busy for me between a lot of extra work at my day job (including some overtime) plus a side project eating up all of my time. Fortunately both opportunities allowed me to funnel some extra money towards my student loans.

Looking back at 2012

Last year I set some financial goals for myself that I thought would be realistically achievable. How did I do?

Goal 1: Reduce my private student loan debt to under $80K.
So…I got so close to this goal! After my December payments processed, I was at $80,702.53. Just $700 off.

At then end of 2011, my Sallie Mae loan balance was $90,962.54, so I paid off $10,260.01 (plus a TON of interest) over the course of the year. I didn’t hit the goal, but I am proud that I was able to eliminate $10K of debt.

Goal 2: Reduce my monthly payment amount to less than $900
Well, I doubted my ability to reach this goal when I set it, and I didn’t reach it. This was partially because I didn’t expect Sallie Mae to suddenly start postponing my monthly payment due dates instead of lowering my payment amount.

At the end of the year my monthly payment amount was at $953.67, a reduction of $43.30 from last year’s payment, so not too shabby.

Goal 3: Increase emergency savings to $3000
BAM! My current emergency fund is $3,059.21.

SLAYED IT!

2013 Goals

2013 should be a fun year. There’s a lot of things that are up in the air right now:

My Take Home Pay – With all of the fun things going on with taxes and increase in health insurance costs, my take home pay will probably go down. I should be getting a raise this year, but it’s unclear when or how much. I also am doing some freelance writing on the side of my day job which should earn me some extra cash, but how much remains to be seen.

My Monthly Student Loan Payment Amount – I haven’t made any payments on my federal student loans because my income has been so low (thanks 2 years of unemployment!) since graduation. This should be reassessed this month and I think I make enough now that they will require me to pay something. Until I get that bill, I won’t know though. This will mostly like take away from the extra amount that I usually send to Sallie Mae, so while I have the money, I don’t like the idea of it cutting away from paying down that high interest debt.

With those variables in mind, here are my goals for the year:

Goal 1: Get my total student loan debt under $100K
So I don’t ever talk about my federal loans on the blog, since I don’t have to pay them right now. Since that will probably change this month, I have to start thinking about them and figuring them into my budget and goals.

My total student loan debt is over $105K. While my Sallie Mae balance goes down each month, my federal loan balance goes up because I’m not making payments, but some of the accounts are still accruing interest. The interest rates are 1/2 to 1/3 of my Sallie Mae rates though, so I would rather focus my money on that while I can.

I think this goal is very achievable–it’s something I’ve been working towards since I graduated with about $130K in student loan debt and interest. I can’t wait to reach it!

Goal 2: Reduce my monthly payment amount to less than $900
Yep, I’m just rolling this goal over from last year. This means reducing the payment by $53.67. I can do it! Right?

Goal 3: Increase emergency savings to $4,000
Yeah, that’s only an increase of $1,000, but the budget is going to be a little bit tighter for me this year. Everything is going up and my take home pay is going to be less than it was last year. Hopefully side projects and a raise at work will make up some of the money, but that remains to be seen.

So that’s it! Hopefully when I sit down to write this post next year, I’ll be writing about success.

What are your goals (financial or otherwise) for 2013?

October 2012 Sallie Mae Student Debt Update

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Well, it’s 2013 already. Where did all of the time go?

It’s time (past time) for my quarterly student loan update.

Again, I’m two months behind for the debt updated for October. In July, Sallie Mae dropped my monthly loan payment to $962.77. Between July and October I paid $1420.73 extra on my loans, including $190.73 in earnings from Upromise.

My new monthly payment is: $953.67

That’s a difference of $9.10 per month. I’m still paid way ahead on my loans, which is kind of screwing up these numbers, but I’ll take any reduction I can get and I will continue to pay extra each month. I’m focusing all of my extra payments on the loan with the largest interest rate (and coincidentally the largest balance). During the last quarter I finally got it under $30K, so that in itself is a mini achievement.

Here’s the stats for October:
Total Sallie Mae Debt: $82,792.95
Months of Payment Left: 144 (12 Years)
Original Monthly Payment: $1,024.70
Current Monthly Payment: $953.67
Total Pre-Payment Savings: $10,544.75

Stay tuned for the year in review post…

July 2012 Student Loan Debt Updates

But Tiffany, it’s October, why are you doing the July update now?

Well, dear reader, this was a busy busy summer. And I wanted to get these numbers down before Sallie Mae updates my monthly payment amount after my October payment.

So I’ve continued my trend of paying as much as I possibly can each month, though I took a dip in available income because my pet rabbit had a medical emergency that required hospitalization and ended up costing a pretty penny in vet bills over most of the summer. He’s a-ok now and I have no problem paying whatever it takes to keep my pets healthy and happy, but that did set me back a bit in how much money I could pay towards my loans.

However, since then I’ve started working on a few side projects in hopes of bringing in some extra income to help me with paying down my debt, so hopefully that will give me a big boost for my numbers.

In April, Sallie Mae dropped my monthly payment to $973.17. Between April and July I paid $820.78 extra on my loans, including $15.78 from Upromise.

My new monthly payment is: $962.77

That’s only a drop of $10.40, but I’ll take it.

Last time I talked about how my billing is a bit screwed up because I paid so much extra that Sallie Mae advanced my due date. Well I talked to customer service about it and they basically told me there’s nothing they can do to fix that so it shows the amount due normally. It will just keep saying $0 due unless I just don’t make a payment for a month–which I’m definitely not going to do!

So I’ll just deal with it and keep making the payments.

Here’s the stats (all for where I was in July):
Total Sallie Mae Debt: $85,258.80
Months of Payment Left: 147
Original Monthly Payment: $1,024.70
Current Monthly Payment: $962.77
Total Pre-Payment Savings: $9,234.35

April 2012 Student Loan Debt Update

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Yep, it’s May. I’ve been crazy busy for the past two weeks, so I’m only getting around to writing this post now. It also doesn’t help that this latest debt update is a little disappointing (and not because of anything I did).

In January Sallie Mae dropped my student loan payment to $982.89. Since then I paid an extra $2117.21 (thanks to a hefty tax refund) and received $57.99 from Upromise.

My new monthly payment is: 973.17

That’s a huge disappointment. It’s only a drop of $9.72. So what happened? This happened:

Sallie Mae advanced my payment due date by two months. This is silly because I am signed up for automated debit, so they take out a payment anyway. When they recalculated my loans and the monthly payment, they took into account two months of a $0 payment, so that number didn’t drop as much as it should have.

I have to contact Sallie Mae’s customer service and try to get them to adjust my account to reflect normal payments. It’s a pain, but doesn’t really effect things for me too much at this point.

Here’s this month’s stats:
Total Sallie Mae Debt: $87,137.80
Months of Payment Left: 150
Original Monthly Payment: $1,024.70
Current Monthly Payment: $973.17
Total Pre-Payment Savings: $7,705.55

Hopefully I can get this mess cleared up before the next payment update and have happier news to report.

Sallie Mae’s New Online Pay System – Pay Extra on your Principal

I don’t know when Sallie Mae started this, but I didn’t discover it until February. Previously if you made extra payments beyond your monthly amount due and you wanted it applied to specific loans, you had to make all of your payments by check with written instructions telling them how to apply the extra amounts. Not only is that a pain, but most people I’ve talked to say that Sallie Mae never, ever, ever applies the amount correctly.

Finally, they’ve decided to actually do something useful for those of us who are trying to get out of debt. Previously if you made extra payments online, Sallie Mae just used some fancy math to divide up all of the extra money between all of the loans. This is how it works now:

When you go to enter your online payment, if you enter an amount larger than what is due, it now takes you to a screen asking you if you want to apply the extra amount to your principal balance (yay!) or toward your next payment due (which is pointless, because you’re basically just giving them an interest free loan of your money for a month. Never do this!).

Once you select to apply it toward your principal balance, it then takes you to a screen that shows all of your loans along with their interest rates and tells you exactly how much extra money you are sending.

Then you can type in how much of the money you want to apply to each loan, or leave it blank and let Sallie Mae do something of their “magic” math. My recommendation is that you apply ALL of the extra money to the loan with the largest interest rate, because that’s where it will save you the most money. Unfortunately for me, my loan with the highest interest rate also has the highest balance, so it doesn’t feel like much of a gain, but I know it does the most good over the long run.

Now, this process is trickier for people (like me) who have their payments auto-debited from their account. Since you make the extra payment separate from the amount that is auto-debited, the system isn’t smart enough to recognize it as an extra payment. You have to submit the payment on the same day that your bill is due and the auto-debit transaction occurs and then it will recognize that the sum is in excess of the amount that’s due. It’s a pain to do, but once you get access to that screen, the payment will be processed the way you request.

Now that I have this tool to aid me in my debt payoff, I almost have some positive thoughts about Sallie Mae. Almost.

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