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.
Student Loan Debt Update – June 2013
June was another interesting month for us. Tori, my fiancee, is still using her short term disability insurance since she can’t even walk at this point. As you may remember, our ex future tenant backed out of renting our townhouse, too. Between Tori not being able to walk (or work) and the extra expense and time involved to fix up the townhouse, it has been a busy and expensive month for us.
Luckily, we’re still in pretty good financial shape even with everything that is going on. Tori was able to make an extra payment this month, which is pretty awesome in my book. Of course, once things do finally settle down, the townhouse gets rented out and we’re married, we plan to kick things up a notch. We’re considering getting a 0% balance transfer credit card to try to save some money on interest. I think we’d be able to save at least a few hundred dollars that way. It is a tricky move, but we would make sure we don’t transfer more than we can handle.
We’ll also be combining finances, which means we can use some of my surplus and business income toward paying down her loans. At that point, things should really start taking off! We can’t wait until the loans are gone for good!
Private Student Loan 1 – 8.0% Variable
The current balance on this student loan is $3,997.22. This is a decrease of $685.10 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 fiancee began paying this down after college in 2011.
Federal Student Loan 1 – 6.55% Fixed
The current balance on this student loan is $7,606.05. This is a decrease of $117.06 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 $7,146.80. This is a decrease of $50.22 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 $3,898.53. This is a decrease of $29.47 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 $22,337.65… ouch! This is a decrease of $95.78 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 $8,211.53. This is a decrease of $25.73 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 – $53,237.78 (-$1,003.36)
Our realistic goal is to have the student loans completely dead by the end of 2016. However, if things continue to go well with my side business and Tori doesn’t have to continue having more foot surgeries, we may be able to get this debt paid off much sooner than anticipated… more news on that in the coming months.
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.