Welcome to my June 2018 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 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: $6,000

Debt remaining: $110,806.26

Check out my debt progress so far from the very beginning here.

As I predicted, I made fewer contributions to my loans this month compared to last month. I was, however able to put $1,000 more than my original plan of paying $5,000 in June.

I am still driving on the momentum that brought me back to tackling my debt after a setback and am hoping to keep it up until the end of the year.

FYI: I am on the REPAYE program which allows me to make $0 minimum payments each month until 2019 hence why I am able to only make payments to one loan without having to put in minimum payments to all my other loans.

What Worked

Admittedly, I didn’t do anything differently this month than last month. I am simply implementing all the strategies I wrote about last month. Just so I don’t sound like a broken record, I will refer you to my May debt progress on the details.

These were the four things I did this month to contribute $6,000 to my student loans:

1.  I had a concrete short-term goal in mind.

Last month I created a stretch goal of lowering my student loans to under $100,000 by October 2018.  Realizing this is a huge goal to tackle, I broke this goal down into a short-term goal of contributing $5,000 to my student loans every month.

Well, it worked! It’s amazing what having a goal to work towards can do for your mindset. Before I created monthly goals, I kept telling myself I would just contribute whatever money I had left in the bank after my paycheck to my student loans.

But not having a goal led me to get complacent. Having a concrete goal kept me motivated and it fueled my competitive spirit. Not only did I want to meet that goal, I wanted to exceed it, hence why I contributed an extra $1,000 over my goal.

2.  I made payments to my student loans as soon as I receive my paycheck.

Robert Kiyosaki’s book Rich Dad, Poor Dad introduced me to the concept of paying myself first which made such a deep impression for me. It was the first book I ever read on personal finance and it is absolutely life-changing. If you’ve never read this book, you need to read it right now.

If you’re looking for a book to give you a step-by-step guide on how to get rich, this is not it. But what this book will do is change the way you look at money. It gave me a new mindset of how I should view money and one of the lessons I learned from reading this book is to pay yourself first.

I prioritized paying my debt and now, rather than waiting till the end of the month to see how much money I have leftover, I make sure to budget and put in my loan payments as soon as I receive my paycheck.

By making my debt a priority and paying it first, I’m forced to stick to my budget rather than falling into the trap of spending money that I don’t have and end up making minimal contributions to my debt.

The constant low balance on my bank account further fuels me into working harder rather than falling into the false sense of security that I actually have money when I really don’t.

3.  I worked a lot. I made sure to pick up any available shifts even on weekends to get extra cash.

Just like last month, I continued to work a lot this month, including picking up extra shifts nobody wanted and dog-walking on my free time. It’s a bit disheartening to have to work on weekends when everyone else is having fun. But I realize that if I don’t keep myself busy with work, all I’m going to do is spend my money on eating out or shopping so working on the weekend is almost like killing two birds with one stone. I get to make money and stop myself from spending money.

4.  I charged my expenses to my 0% interest credit card to allocate the majority of my income to loan payment.

I talked about this extensively on my May debt progress and I even wrote about it separately on How I Don’t Pay Off My Credit Card and It Saves Me Money. So I won’t go into further detail on this method.

Basically, I charge my monthly expenses other than rent and my phone bill to my 0% APR credit card. For reference, I charge ~$500 per month to my credit card. I do this so I can instead allocate that extra $500 to my student loans.

Now, just to make it clear, I am in no way using the credit card to pay off my student debt. I am still using the majority of my income to do it. I just charge some monthly expenses like food and gas to it.

I periodically pay it off to make sure my credit card utilization stays below 30% to prevent my FICO score from plunging.

Goals for July

I really like the idea of having goals for each month to keep myself on track and motivated so I create goals for the following month on each debt progress report.

The goal for July is to keep tackling my last 6.2% interest rate loan (my highest interest rate loan) since I am using the debt avalanche method. It will be my last loan with an interest rate > 6% so I am hoping to tackle it as quickly as I can.

This loan has a balance of $17,400. The stretch goal of contributing $5,000/month I made last month motivated me to work hard and hustle this month so I am keeping this goal.

I am $10,806 away from getting to under $100,000 debt! So if I can hopefully contribute ~$5500 for July and August I will officially be able to shed my 6-figure debt identity and become a 5-figure debtor in 2 months!

We will see if that can happen as my hours at work are being cut down for the July and August month. Hopefully, I can get some side hustle going so I can continue on this momentum I am on.

If I can get to under $100,000 by end of August, I will be exceeding my own stretch goal I set last month to get it done by October.