Welcome to my April 2020 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: $880.77

Debt remaining: $52,737.52

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

Updates for This Month

I decided to change my monthly debt progress post to a general monthly financial progress post since I’m no longer aggressively paying down my debt anymore. Don’t get me wrong, I am still making $880.77 minimum payments every month which in my book still counts as a lot of money.

The only big change is now I am more focused on increasing net worth through a combination of both saving and debt repayment rather than only on debt repayment as I’ve done the last 2 years.

I’m still reeling from the fact that I debated on refinancing to a private loan for over two years and the month I decided to finally finalize the process, the government decides to give 0% interest rate for the next 6 months to federal loans.

Of course, no one could’ve predicted COVID-19 and its ramification, but me being me, I can’t help but still count my losses. I could’ve saved ~$540 had I stuck it out with federal loans during this time. At least I received a $300 cash back bonus from my refinance so that cut my loss by a bit. Oh well, no use crying over a spilled milk. I’ll get over it.

Although I am still planning to finish paying off my student loans in less than 4 year, I’ve made it clear since the beginning of 2020 that my goal this year is to increase my savings as I plan to purchase my own home in the near future. So for the time being, I will continue only with my $880.77 minimum payment to my private loan.

It looks like Nelnet has finished adjusting my balance to reflect the 0% interest rate so my current balance actually decreased from last month even though I made no payments to my federal student loans.

I definitely have no plans on repaying my federal loans until at least October 2020 which is when the 0% interest rate ends.

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

Gas – I now use a prepaid gas card that I buy $200 every other month so I average out $100/month in gas spending. Gas prices have been outrageously low and due to the current situation, I’m not exactly going out meeting friends so I’ve really only been driving to and from work which keeps my gas spending at $75, lower than my monthly average.

Entertainment/dining out – $0 spending on both categories. Quarantine is really doing a heck of a job with keeping me under-budget! I haven’t met up with my friends in over a month so there’s really no eating/going out happening for me to spend my money on.

Since the quarantine happened, I’ve been only eating grocery food and since I’ve been the one buying groceries for the whole family, on the special occasions that we do get take-out, my parents have been paying for that hence the $0 dining out.

Groceries – Over budget from grocery food and COVID-19 necessities. I raised my grocery budget this month since I’ve been over-budget since the beginning of this year and it’s looking like nothing will be changing anytime soon so it looks like it was time for me to tweak the budget a bit.

While I still went over my new budget, I’m anticipating that it will lower next month. For the entire month of March and April, we’ve had an additional family member from abroad quarantine with us since COVID-19 hit and he couldn’t go back home so that had added to the budget. It should go down as he plans to travel back in May.

Shopping – bought some skincare products and clothes. 

Miscellaneous

Donation – donated to a coworker’s GoFundMe for a tragic event. I’m lucky to be in a position where I still have my job (fingers crossed that it stays that way) and this donation really allowed me to reflect back on the past few years of my life.

Sometimes I feel like I’m not moving fast enough to where I want to be financially but reflecting that 3 years ago I wasn’t just living paycheck to paycheck, but I was literally living off my student loans, I realized that I have come a long way.

It’s nice to know that I have come far enough to have the cash flow to do something like donate to a friend in need.

Savings

April was a 3-paycheck month for me so I continued my automatic contribution of $500 per paycheck to my savings account and $500 per paycheck to my Roth IRA for a total of $3,000 to savings.

Goals for Next Month

Same as last month, I’m going to continue to take it easy. Grateful that I still have a job and hopeful that this pandemic ends soon. I’m going to try to continue to see the positive during this quarantine. While I really miss going out with my friends, once again, I am under-budget this month due to the quarantine so I am going to take this opportunity to continue to save. 

My 0% introductory APR for my credit card is ending in June so I will be paying that off in May before I am hit with the interest. As a refresher, for the last 3 years, I have been using 0% APR credit cards for a year each time to take advantage of the 0% rate to put more money into paying off my student loans that previously had interests as high as 6.8%. I’ve written about the process here. 

Of course I’ve always paid it back before the introductory period ends and it has really done me well these past few years. Now I am debating if I want to continue on this course and find a new credit card or to stop and just pay the full balance on my credit card each month now that I am not paying off my student loans so aggressively. 

We will see my final decision on next month’s update.