Welcome to my April 2019 student loan debt progress!

If you are new here, every month, I post the progress I’ve made on paying off my student loans. I’ve done this since I first started paying down my loans in July 2017 and it has been so worth it.

I do this to hold myself accountable and to share my debt progress with others who are also facing debt payments of their own.

Debt paid this month: $2,191

Debt remaining: $82,072

I also house every month’s debt progress from the very beginning here if you want to check out the progress so far.

Debt Updates for This Month

The time has come. Say goodbye to even, whole number debt payments. More significantly, say goodbye to $0 minimum payments.

After recertifying my REPAYE income driven payment plan with my 2017 tax return, my new minimum payment was calculated to be $221.

I talked more in depth about recertifying and how I came about to have such low minimum payment based on my debt in my January debt progress post.

So what does this mean? It means that I now cannot make payments to the one loan that I’m currently focusing on, but must make a minimum to each of them, even the ones with lower interest rate.

My interest subsidy (which I mentioned was my #1 reason for going on REPAYE)  is still there but it will only apply to outstanding interest not covered by my monthly minimum payment.

The good (but actually if you think about it, bad) part is that my minimum payment actually does not fully cover the interest I accrue every month. So I will still get a 50% subsidy for my unsubsidized and 100% for my subsidized loan interest accrued minus the interest covered by my monthly minimum.

Whew, if that whole interest subsidy issue was somewhat confusing, I talked about it more in depth in this post on why I decided to go with REPAYE payment plan.

The other “good” news is that because I am now required to make routine monthly payments, I qualify for Auto Debit every month which comes with the perk of reducing all my loan interest rate by 0.25% per Nelnet (my student loan servicer).

Nelnet would not allow me to Auto Debit before this when I had $0 minimum payment nor will it let me change my Auto Debit amount to anything else but the minimum payment.

So my plan for this month and going forward is to still make extra manual payments to my loan of choice (highest interest rate first per debt avalanche method) while enrolled in Auto Debit to get the 0.25% interest rate reduction. Hey, every dollar counts!

I put down $2000 towards my student loans this month to my highest interest rate loan and had to make the $191 minimum payment to all my other loans (which sadly doesn’t even fully cover the interest I accrue each month, let alone actually make a dent in my principal balance).

April Budget

Fixed Spending

Nothing much here, just the usual expenses. I live at home but pay rent to my parents and am also paying back my personal loan to them at $500/month.

Other than that, my cell phone bill and Netflix make up the rest of my fixed spending.

Variable Spending

I’m over-budget in a lot of my categories especially food and entertainment this month. Gas-wise, there’s not much I can do about the rising gas prices. Girl gotta drive to work, so no other options there.

I talked about my struggle before between making the most of everyday and living my best life versus saving up for the future.

While I’d like to think I have it all balanced out, the truth is it’s still a daily struggle. And hate to admit it, but I’m nothing special.

Like most mid twenty-somethings, I love going out with friends, trying new food and activities but it definitely costs money.

It doesn’t help that I’m not exactly a picky person and I’m usually open to most ideas and to try out new things. So it’s really hard to resist my friends’ invitations.

I just have rein it in and remember my goals which is why these monthly check ins are so important for me to do.

Plus I’ve added a new travel goal of a Europe trip in 2020 so I need to start saving up. Yes, unfortunately I’ve caught the travel bug.

Other

Uncle Sam got me. I owed $518 in federal taxes that I had to pay this month. I did get some state tax back last month when I filed so overall I owed ~$200 this year.

Investment

No contributions to Roth IRA this month.

My plan for 2019 is to max my Roth IRA so I plan to contribute $1,000/month and get to the $6,000 limit ASAP at which point I can switch my attention to putting extra payments for my student loans.

Goal for Next Month

Pay off credit card debt before 0% APR promo ends! I talked about this in depth already on last month’s check-in.

I paid down $2000 this month in credit card debt hence the no Roth IRA contribution.

I currently carry ~$6000 balance on this card which I will need to pay off in the next 2 months so my plan is to put down $3,000 in May and June to finish paying it off.

I’m not too worried because I do have ~$6000 saved up already in a high yield savings account that I can access if need be. But my hope is to not have to dip into that.

That wraps up my April 2019 debt progress. Here’s to hoping May will be one heck of a thrifty month.