Debt Pay Off Update – February 2013

In December 2012 we decided it was time to open up to you, my readers, and gave our very first debt update.

As a quick review, 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 and the townhouse mortgage.

We just recently got engaged, but we aren’t married yet so we keep our finances separate. We plan on paying off her student loans as fast as we can.

However, 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 mortgage off prior to its due date, but that may change later down the road.

Student Loan Debt Update – February 2013

In late January my girlfriend was able to go back to work after her foot surgery. While she was out of work she was receiving a percentage of her income from disability but was not getting her normal full paychecks.

She had saved some money in advance of her surgery and now she’s back to making her normal paychecks again. We were able to take some of this extra buffer from her disability, as well as her income tax refund, and pay down another large chunk of her student loans this month.

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 $6,205.20. This is a decrease of $2,409.90 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 – 6.8% Fixed

The current balance on this student loan is $7,839.04. This is a decrease of $51.86 since the last debt update. This will likely be the 4th student loan we pay off.

Federal Student Loan 2 – 6.8% Fixed

The current balance on this student loan is $7,366.75. This is a decrease of $49.00 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 $4,030.98. This is a decrease of $46.92 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 $22,866.07… ouch! This is a decrease of $93.65 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 $8,318.13. This is a decrease of $25.30 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 – $56,532.30 (-$2,676.85)

As I had mentioned in the past, I’ve been saving a large chunk of money help my fiancee pay her student loans when we combine our finances after we get married!

In total I have saved $36,863.99 to contribute toward this goal. This is an increase of $5,272.21 over last month… well, kind of… Right now the plan for this money is to use it to pay down the student loans when we get married later this year.

I’ve calculated this money the same way as last month but I made another change to increase this balance. The way I budget allows extra money in each category to roll over to the next period. Because of this I had some crazy balances in some of my budget categories.

This was a good thing because I could transfer all of this extra money into my massive cash account which will get us closer to our goal.

We have a long way to go but if everything goes according to a pretty aggressive plan we hope to have the student loans all paid of by the end of this year! There are only 10 months left this year… Aggressive, but completely possible!

Net Student Loan Debt – $19,668.31 (-$7,949.06)

Do you have any debt you’re trying to pay off? Do you have a goal for when you want it paid off by?

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About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.


  1. I like your attitude and the way you are going about it. Paying off debt is as much about your mindset as it is about anything else.

  2. Great month! It’s cool to watch your plan in action as you head toward the finish line on the debt.

  3. You can do it! With the way it sounds like you’ve been saving money, I don’t see you having many challenges paying it off by the end of 2013.

    I still love how you’re not combining finances (or helping he pay down debt) until you’re married. I think that’s brilliant by the way…

  4. Great work and awesome month! I love your attitude in paying off the debt as it’s as much about that as it is anything else. I also love that you’re not cutting back to living on a bare bones budget. Life is meant to be fun and eating rice and beans will only make it more difficult in the long run.

  5. You guys are doing great! I can’t believe some of your interest rates! My federal (canada) loans are the highest at 5.5% but some are as low at 4%. 8% is criminal!

  6. Impressive progress! I wasn’t aware that the interest rates would be that high in this environment of low interest. Can she consolidate and get a lower interest?

  7. All I can think of when I read this is how badly those loan companies are ripping off college students. Piranha ….

  8. You’re doing well here and the decisions are two – pay the highest interest rate loan off first or the smallest loan so it is out of the way? Then how much to pay – you want a life and as you are young yet and getting married, you want to have some life. Of course it may be sensible to look for some loan consolidation if that is possible but it may not be worth the time and effort.

    Money is stored work and debt is the anticipation of work to come. So take it at a reasonable pace and continue to invest in yourselves and your futures. Good luck!

  9. Both of my sons will graduate with about 40k in student debt. It is hard to be the children of a lower income single mom. Education is important to financial success but they will both be making 50k to 60k when they graduate and it will take years to pay the student debt and that will slow their start at saving for a home and saving for retirement.

    • It does stink that they’ll start in debt but if the play smart and continue living like a college student for a couple years they’ll be able to pay them off pretty quick.

  10. This is great. That’s a really impressive goal. I’m so excited for yall to get married. I hope you will post about the wedding and any money saving techniques you used for it!

  11. Those are great numbers to see Lance. It is nice to see a downward trend. Keep it up.

  12. Great job not rushing into things. I hope you knock it off before the new year.

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