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.
I originally wrote Our Debt Pay Down Strategy to explain where my fiancee and I are in terms of debt. Currently we only owe for her student loans, the townhouse mortgage and our single family home mortgage. We just recently got engaged, but we aren’t married yet so we keep our finances separate.
We aren’t going to go into crazy insane debt payoff mode where we only eat rice and beans, never go out to eat and cancel our cable. We’ll be taking a more balanced approach. We also do not plan to pay our mortgages off prior to their due dates, but that may change later down the road.
Student Loan Debt Update – April 2013
A lot has changed since our last debt update in March. I feel like I say that every month but life has its way of throwing curveballs. Since our last update we have closed on and moved into our new house! We even signed our death pledge!
After closing on the house we ran into another speed bump which I can’t talk about yet. Nothing major, but I’ll be sure to update you as soon as I can.
We’re still working to aggressively pay down the student loan debt, but we won’t be able to have it disappear before the end of 2013… unless we get INCREDIBLY lucky. We’re now shooting for the end of 2016 as a realistic goal. Now I think it is about time we got on to the update… don’t you?
Currently there are six groups of student loans that have balances on them.
Private Student Loan 1 – 8.0% Variable
The current balance on this student loan is $4,827.30. This is a decrease of $783.45 since the last debt update. We are paying this loan off first because it has the highest interest rate and is also a variable rate. It originally was well over $20,000 when my girlfriend began paying this down after college in 2011.
Federal Student Loan 1 – 6.55% Fixed
The current balance on this student loan is $7,723.11. This is a decrease of $58.11 since the last debt update. This will likely be the 4th student loan we pay off.
Federal Student Loan 2 – 6.55% Fixed
The current balance on this student loan is $7,257.30. This is a decrease of $54.86 since the last debt update. This will probably be the 3rd student loan we pay off.
Federal Student Loan 3 – 6.8% Fixed
The current balance on this student loan is $3,956.55. This is a decrease of $44.66 since the last debt update. This will be the second student loan we pay off because it has the second highest interest rate AND the lowest balance. On top of that, we hate the bank this loan is through so it gives us even more reason to pay it off.
Private Student Loan 2 – 5.75% Variable
The current balance on this student loan is $22,572.29… ouch! This is a decrease of $94.83 since the last debt update. This is the highest balance loan but it has a lower interest rate for now. Unless interest rates start rising we’ll wait to pay this loan off until the federal loans are paid off.
Private Student Loan 3 – 4.75% Variable
The current balance on this student loan is $8,263.96. This is a decrease of $25.53 since the last debt update. This is the lowest interest rate loan and, unless interest rates rise, this will likely be the last loan to be paid off.
Total Balance – $54,600.51 (-$1,061.44)
As I had mentioned in the past, I had saved a large chunk of money help my fiancee pay her student loans when we combine our finances after we get married! Then plans changed and we decided to use it for a down payment on a house.
We had hoped to have the student loans all paid of by the end of this year but with the changes of plans this has changed to the end of 2016. Hopefully we can beat this goal, but for now 2016 seems most realistic.
Do you have any debt you’re trying to pay off? Do you have a goal for when you want it paid off by?