Welcome to my January 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: $133.65

Debt remaining: $54,432.44

I 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

I find myself suffering from a debt payment drought this month. For the first time in 18 months (since April 2018 when I was laid off), I’ve only made the minimum payment on my student loan!

And worse yet my minimum payment doesn’t even cover the interest I accrued for the month so my balance actually went up this month! 

But do not despair, at least the reason this time wasn’t that I was laid off. It’s actually part of a good news. I’ve finally gone through with my student loan refinance (see here, here, and here about all the times I’ve talked about my goal of refinancing since 2 years ago)! 

I’m actually going to detail my entire refinancing experience with First Republic Bank (spoiler: so far so good) on a different post since the entire process is not fully complete.

I’m now on the longest part of the process, which is waiting for the payoff to come to Nelnet (aka my soon to be no longer student loan servicer). Actually that’s a lie, I didn’t fully refinance my $54,433 balance, so I’ll actually still have $4,433 of my lowest interest rate loan (if things go accordingly) left with Nelnet.

And the reason for that is to get my 2.2% interest rate with First Republic, a prerequisite is having $5,000 or 10% of my loan balance in a checking account with them. I didn’t want to put in any more than $5,000 so I limited myself to the $50,000 loan.

My current minimum payment with Nelnet is $133 which is what I paid this month, but after doing my annual recertification, it looks like starting in April, my minimum payments will rise to $631.

This isn’t a big difference from my to-be new minimum payment with First Republic of $881 so I felt truly right in refinancing this time around and lowering my interest rate by half!

Take a nice look at this debt statement excel because this is probably going to be the last time this chart is going to look like this. 

With my refinance, all my loans will be consolidated into one giant $50,000 loan and maybe just 1 leftover at Nelnet.

I’ve stared at my debt statement every month for longer than I’d admit but looking at more and more lines going to the red and seeing my balance go down has truly been such a motivating factor. It’s weird that such a measly little chart could do so much but it truly has made this payoff journey into a little “game” that kept me motivated.

I use each loan group as a marker, getting ever so excited whenever my balance on that loan is coming closer to zero even if my entire loan balance was still in the six figures (at one point).

But alas all good things must come to an end. It’s time to say goodbye to the debt statement I’ve had since I first started my debt journey in 2017. It’s truly the end of an era (I’m not crying, you’re crying!).

Now I will probably be marking off my progress through each $10,000 I pay off.

January 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.

Entertainment/dining out – It’s hard for me to really separate these two categories since my main form of entertainment with my friends is to eat out. I celebrated a couple of birthdays this month so that’s where the dining out spending went and my entertainment spending mostly went to gifts.

Groceries – Over budget from stocking up on alcohol this month. Should last me a couple of months.

Shopping – bought a couple of shoes on sale at a Macy’s that was closing down.

Miscellaneous

Auto insurance – decided to add on emergency roadside assistance with Geico (only $10 for the year!) and cancel my AAA that was costing me $80/year. Well worth it, since I ended up using it this month (will talk about it in my February recap).

Car service – had to get oil change and car maintenance due to this month with my local mechanic.

Travel – paid for AirBnb and car rental for an upcoming weekend trip in February.

Savings

No savings this month. Everything stayed in my account to make sure I had enough money to move around between having to open a new checking account with First Republic and having to fund it.

Goals for Next Month

Hopefully everything with my student loan will have settled by mid February. I’m looking forward to starting the grind back to maxing my Roth IRA, 401k, and HSA.

I’m a firm believer that time in the market is > timing the market so I plan to max my Roth IRA and HSA as soon as possible and will continue to fund my 401k throughout the year once the student loan refinance settles.