Tell All Tuesday – Bye Bye Student Loan Edition
Well, my spouse’s student loan, anyway.
October is a three paycheck month for both my spouse and I (I get paid at taekwondo on the same schedule my spouse gets paid at his job). Since I budget on a monthly basis based on two paychecks for each of us, in the two months a year we get three paychecks I treat those as an extra paycheck each. So instead of incorporating them into our budget, I use them to further our financial goals. My spouse got three paychecks in April, but that was the month our furnace died, so instead of that extra paycheck going towards debt, it went towards a new furnace.
I treat the first paycheck of the three-paycheck month as the extra one, so it shifts us into handling future months better. So on October 3rd we each got our “extra” paycheck. I sat on them at first, moving them into savings and thinking about what I was going to do. Then I decided I was going to be crazy and go ahead and do a big thing. I moved the money back into checking, added that to our budgeted minimum payment for my spouse’s student loan, and added all the money I’d saved to snowflake in the past month. I was going to pay off my spouse’s student loan. It was kind of crazy to do so right this second, because my spouse is out of town this week on business, and it wouldn’t hurt anything to wait a few weeks and be sure. But I am crazy like that, so this morning, I logged into Sallie Mae and authorized the payment to pay off the student loan in full.
When I logged in and looked at the 10-day payoff number, it said $2601.54, so I clicked on the “Make A Payment” button on the dropdown menu to make that payment. But on that page, it told me the 4-day payoff was $2599.76. So that is what I authorized to pay. $2599.76. I know it isn’t official yet because it takes a day or two to process, but it feels official. One student loan – gone. One more student loan and a little bit of a car loan to go. Things will be very tightly controlled, money wise, the next two weeks until we get paid again because this was a big stretch to do even with the extra paychecks and the snowflake money, but if something comes up for my spouse in California (where he is on business this week) we do still have the $1000 emergency fund to fall back on. I’m reasonably confident it won’t come down to that, but just in case.
With that, here’s what the numbers look like:
- Debt at start of blog (6/19/07) : $36,451.71
- Current total as of 10/07/08: $12,458.06
- Principal paid to date $23,993.65
- Broken down into:
- Credit Card: PAID OFF 2/7/08
- Student loan (at 7%): $11,084.68
- Spouse student loan(at 9%): PAID OFF 10/7/08
- Car loan(at 4%): $1373.38
- % of debt paid off according to NCN Network Chart: 65.82%
So next month, that’s $437.59 ($200 credit card budgeted minimum and $237.59 student loan minimum) that I used to be paying to my spouse’s student loan that gets snowballed into the next target debt payment. Which debt that target is, is still under discussion, but I can hardly wait to make things happen. 
October 7th, 2008 at 2:41 pm
WOW! That’s so great to read! You’re inspiring hundreds (thousands?) of folks out there to get to work and knock out that debt. Bravo!`
October 7th, 2008 at 2:43 pm
Woo hoo!!! Way to go. That must feel so good. You inspire me so much, I almost wish I had debt so I could kick its butt the way you do
October 7th, 2008 at 2:52 pm
That’s awesome, it must feel great! Congratulations!
October 7th, 2008 at 2:55 pm
congrats! having one less payment to make makes such a difference in the way you feel about it, doesn’t it? the number of debts is getting so much smaller! good for you!
October 7th, 2008 at 2:59 pm
Congratulations!! That’s got to feel SO GOOD! I can’t wait to have my student loan paid off (my last non-mortgate debt). I should be finished with it soon, and your post today makes me even more excited about it. Congrats!
October 7th, 2008 at 3:06 pm
Yay for you! You’re doing great.
October 7th, 2008 at 3:07 pm
That’s very exciting! Congratulations!!!
October 7th, 2008 at 3:08 pm
Awesome, so inspiring!
October 7th, 2008 at 3:10 pm
Great job on paying off that student loan!
October 7th, 2008 at 3:16 pm
Congratulations! I can only imagine how good it feels!!!
October 7th, 2008 at 4:23 pm
That is so awesome! I let out a cheer when I read this.
Pay off that car loan next! It’ll be gone before you know it and then you’ll only have one loan to worry about….
October 7th, 2008 at 4:37 pm
Congrats! Hopefully I can say the same someday, just a few years down the road to knock off the first one.
The remaining debt should be eliminated much faster now with more payments snowballed.
October 7th, 2008 at 5:31 pm
Having just got off the phone with my student loan company that is currently screwing us I wish I could say the same. But we are saving up for a new to us car first as it would be at a higher interest than our 3% and 5% student loans.
October 7th, 2008 at 5:38 pm
Once again, so inspirational to those people with debt. That is awesome! Looking forward to the “No More Debt At All” post in the future!
October 7th, 2008 at 6:22 pm
Congrats! That’s so exciting, one more down.
I remember how great it felt when we paid off Mr Chiot’s student loan. Because of wise choices and sacrifice we were able to do it the year after he graduated.
October 7th, 2008 at 6:41 pm
Congratulations…you are making huge strides! Good for you!
October 7th, 2008 at 7:35 pm
Hello, I’m pretty new to your blog but I just wanted to say WOO HOO!!!!!!!!!
October 7th, 2008 at 7:50 pm
Congrats!
Why there would even be a discussion about what debt to pay off next though is beyond me.
October 7th, 2008 at 7:53 pm
Hooray! Your snowball is about to get really really big! The way this is going for you, 2009 is going to be the year you become debt-free. woo!
October 7th, 2008 at 8:09 pm
Interest order… balance order… we like to discuss.
October 7th, 2008 at 9:37 pm
Congratulations! Two down, two to go! Awesome!
October 7th, 2008 at 9:46 pm
Congratulations! I have about 12K on my students loans and I’d love to be in your shoes right now!
What a great feeling you must be experiencing.
October 7th, 2008 at 10:33 pm
It feels great doesn’t it? Congratulations!
October 7th, 2008 at 10:51 pm
@ Rhetor – since my student loan still has over $11K we are in the same shoes
hee hee
we can all do it!
October 7th, 2008 at 11:32 pm
Congratulations! I can understand the impatience where you have the money and you just WANT TO PAY IT OFF ALREADY! I bet that was an amazing feeling. I can’t wait to get there myself and pay off student loans, but it’s a ways out still. Thank you for being an inspiration.
October 8th, 2008 at 3:27 am
Congratulations! Your progress is so inspiring!
October 8th, 2008 at 5:32 am
Hurray! Come on, knock out the car loan next!
October 8th, 2008 at 5:46 am
Plus that would bring your debt snowball up to about 650. That’s 2/3 of your 1000 EF every month to throw at the last debt or to have in your monthly budget in case of emergency.
October 8th, 2008 at 6:17 am
The next debt to pay off shold be the student loan for 2 reasons.
1 – the interest rate is higher so you will get debt-free faster paying it first
2 – student loans will follow you to the grave. Any other debts disappear in bankruptcy while student loans continue to accrue interest.
My vote is for the student loan.
October 8th, 2008 at 3:17 pm
Happy Dance! Happy Dance!
Long term money wise it is more prudent to pay on the student loan.
However… if something were to happen to one income, it would be so much easier if you were rid of the monthly payment on that car loan. Plus you’d get that Happy Dance so much sooner to keep you inspired. Sometimes cash flow talks! Especially right now.
The best part is that since you started this you have not added any new debt to the mix (except the interest, of course) Great going!
October 8th, 2008 at 7:30 pm
Congrats! What a great feeling when you get a debt paid off, especially a student loan.
October 8th, 2008 at 9:07 pm
Congratulations!!
October 9th, 2008 at 5:12 pm
Wow congrats, I can’t wait to pay off my student loans too! Unfortunately I have a LONG way to go but reading this post inspires me.
October 9th, 2008 at 8:13 pm
Way to go!!!! You’re almost there!!! Continued success!