Around the last week of December I was tweeting with Candice about student loan debt and more. Sharing how that year I had paid off $30,000 worth of debt. Well, thats the same plan this year. Paying off $30,000 worth of student loan debt. The exact amount is $28,667.89 which comprises of 5 separate loans. As mention in this article on tackling debt while a small business owner, I have a amassed a stupid amount of debt before I was even 25 and I am fixing it now. If all goes to plan I will be debt free before 32.
Let me note I have two other huge student loans that amass $40,000+ but right now I am trying to knock out these 5 loans and thats what the focus will be on today.
Here are my student loans:
So, first let me break everything down for you. Things you will need for doing on your own;
- Estimated 2016 Income
- Total of all your student loan or general debt
As mentioned before a plethora of my money is already accounted for before I even spend it. 10% to God 10% to personal savings and 10% to business savings. I have been doing this for the last three years adding the savings part. I have always tried to pay my 10% tithes. Last year, I did 30% of my income, not really sure what I will be doing just yet this year. Everyone is different when it comes to this. There are people who put 20% all the way up to 80% of income towards paying off debt. I am be honest, you need to do whats best for you in this situation.
So, as stated before I kept accountable by people knowing I was paying off my debt from my banker, guys I dated to social media friends. It makes me very conscious of what I am doing because I don’t want to fail them. Not even fail me because I can live and learn from that. I want to make sure others know they can do it to.
All payments for my student loan are automatically schedule to come out on the first of the month. Make sure you automate your payments this is a very important aspect. This way you know your payments are being made and no check needs to be mailed. In addition to that, my student loan payments come out of a totally different bank account. Around the end of the month I withdraw money from one bank and take it to another.
My goal is to have these completely paid off by 12/31/16. I will be using the Dave Ramsey snowball effect to knock out the debt and writing everything on my Debt Plan Tracker. This really helps me stay focus. The $2,688.70 monthly payment is $50.48 a month. However, I am about to throw around $1500 a month on it. That has it paid off by February. Now the $50.48 I was paying towards that debt goes to the $4,568.88 debt. All extra money made will be thrown at that debt until its paid off. Always, note the minimum payment is being paid on all these debts.
This will be my plan of action for 2016. There is a line item in the budget stating student loan debt. Its a high item not an after thought. Too many times we make things after thoughts then let the debt mount up and annoy us. Make sure you create a realistic plan for your student loan debt or general debt now verse later.