Recently, a few people have asked me how the heck I’ve been able to decrease my student loan debt in such a short period of time … so I figure I’d blog about it instead. :)
My goal from the moment I first took out a student loan was to pay everything back one year after graduating. I heard stories of people taking 15 or 20 years to pay it all off, and I did not want that weight on my shoulders, even though I knew it was “good debt.”
I didn’t actually start paying off my student loans until July 2006, when I got my first pay cheque from my first job after graduating.
My full-time job paid me approximately $2,100 monthly after tax. But from Sept-April every year, I have a part-time job which yields probably about $200-250/month. Not a lot, but every little bit counts. I decided to put at least $1,200 of my income towards my debt every single month, sometimes more. After rent, groceries, RRSP contribution, putting money into savings, and other miscellaneous things, that didn’t leave me with too much left over, but I was okay with that.
In October, I decide my full-time job needed a huge upgrade, so I started applying for other positions. Miraculously, I landed a job I really didn’t have the educational qualifications for (I had the skill-set they were looking for, at least), and at a much higher salary. So now, I was making over $3,000 after tax each month (crappy higher tax bracket!) … since November, I’ve been putting $2,000 or more towards my debt every month ($1,000 bi-weekly).
When I’ve told my story to other people, they seem to think I’m some crazy budgeting queen who must have to sacrifice every last penny in order to make it work. But I haven’t. I enjoy Quicken as much as the next person, but I’m not psycho about it. Since I was a student for so long, and working a part-time job that only gave me $200/month, it’s not like it was a huge life change I had to make. I went from going to school full-time and having a part-time job, to going to work full-time and having a part-time job. I guess I just never got out of poor-student mode, which is good for me, because once I finish paying off my debt, I’ll have an extra $2,000 worth of income every month I can stash away for a down payment for my condo. And that’s income I never really utilized to begin with, so it’s not like I’ll be missing it.
I didn’t receive any monetary “gifts” or anything like that, and it’s not like I’m making a ridiculous amount of money either. It was good ol’ fashion budgeting, and the determination to meet the deadline I had set for myself. So there you have it! The story of my student loan debt. I only have a little ways more before it’s out of my life forever! Let the countdown begin!
This is strange. So I bought my computer last Sunday. A few days later I went to check my Visa online. I saw that the entire $3100+ was pending, and the available credit reflected that amount. But it hadn’ t actually posted the transaction yet. That seemed normal. However, now all of that credit has been released (the CC is back to its original amount of ZERO), and I don’t have any money pending. What happened? How did it go from reflecting the purchase on my card, to no sign of the purchase at all? And according to FedEx, the package has been shipped and is set to arrive on Tuesday, so my payment must have gone through (otherwise they wouldn’t have shipped it) … maybe it’s too early in the morning, but I’m in total WTF-mode.
Maybe my wildest dream has really come true – there was a glitch in the system, and I’m really going to get the computer for free! Oh, wouldn’t that be the greatest thing in the world? Sigh, but it’s probably not true. Visa’s probably just teasing me. Damn you Visa, DAMN YOU!
I got paid today (hoorah!), so I updated my totals on the sidebar. You might notice that my line of credit is still sitting at 0% paid off. I put my new computer purchase of $3,152 onto my Visa card last week, with the intention of paying it all off with my line of credit. However, the transaction has yet to post to my Visa, so it leaves me in financial limbo at the moment. As soon as it posts, I’ll transfer the entire balance over. But since it hasn’t for this pay cheque, I’m not going to make a huge payment to my LOC, which currently has a zero balance. So instead, I put $1,000 towards my student loan debt, and now it’s over 80% paid off! w00t! In 2 weeks when I get paid again, I’ll make up for it by putting $1,000 towards the line of credit debt.
My direct transfer contributions to my RRSP and my Condo Down Payment fund will happen tonight, so I”ll post the updated numbers tomorrow. Hopefully the TSX isn’t such a bitch today.