If you’re new to Money Manifesto, in December 2012 we decided it was time to open up to you, my readers, and shared our very first debt update.
As always, our lives are constantly changing. Since the last student loan debt update, Tori has returned to work! YAY! This is big news for us because she’ll no longer be getting just a partial paycheck through disability. She’ll now be earning a full-time pay which will definitely help us put more money toward debt destruction.
Tori’s full-time employment means that we can use the extra cash we were saving just in case her job didn’t come through. This knocked a big portion off the debt total this month. There has been another huge change in our lives as well, but I’ll be revealing that when I can in a week or two.
Well, no more waiting. Here is this month’s results in our debt destruction journey.
Private Student Loan 1 – 8.0% Variable DESTROYED!
This loan was originally over $20,000 but was destroyed in the August 2013 update.
Federal Student Loan 3 – 6.8% Fixed DESTROYED!
This was a smaller loan than the first, but it too was destroyed in the August 2013 update.
Private Student Loan 2 – 5.75% Variable
The current balance on this student loan is $10,751.31… woohoo! This is a decrease of $10,036.71 since the last debt update. Clearly this is a huge stride toward student loan debt destruction. We’re so excited by this huge result this month.
This is the highest balance loan but it has a lower interest rate for now. After running the numbers, we decided paying the variable interest rate loans off first would only cost us minimum amount of extra interest. To us, the piece of mind of getting rid of a variable rate loan is worth it.
Private Student Loan 3 – 4.75% Variable
The current balance on this student loan is $8,105.43. This is a decrease of $27.21 since the last debt update. This is likely the second loan we’ll be getting rid of due to its variable rate nature.
Federal Student Loan 1 – 6.55% Fixed
The current balance on this student loan is $7,371.25. This is a decrease of $62.47 since the last debt update. This will likely be the last student loan we pay off.
Federal Student Loan 2 – 6.55% Fixed
The current balance on this student loan is $6,925.13. This is a decrease of $58.96 since the last debt update. This will probably be the 3rd student loan we pay off.
Total Balance – $33,153.12 (-$10,185.35)
Our realistic goal was to have the student loans completely dead by the end of 2016, but things have been going well lately. Now we’re thinking we can pay of the debt much more aggressively. The end of 2015 is the absolute latest that we think the debt will be paid off. I think we might be able to do even better though and get the student loan debt destroyed by the end of 2014. I can dream, right?
Lance Cothern, CPA holds a CPA license in Indiana. He’s a personal finance, debt and credit expert that writes professionally for top-tier publications including U.S. News & World Report, Forbes, Investopedia, Credit Karma, Business Insider and more.
Additionally, his expertise has been featured on Yahoo, MSN, USA Today, Reader’s Digest, The Huffington Post, Fast Company, Kiplinger, Reuters, CNBC and more.
Lance is the founder of Money Manifesto. He started writing about money and helping people solve their financial problems in 2012. You can read more about him and find links to his other work and media mentions here.