Welcome to my March 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: $53,528.43

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

My first month of repayment started with First Republic Bank, the first of 60 months of $880.77 minimum payment if I stay with my 5 year term. As I mentioned last month, due to my refinance, I am technically not due for any payments with my remaining Nelnet loan until 2024.

I was debating last month if I should just pay off the remaining ~$4,300 debt left on Nelnet just to get rid of it. Good thing I procrastinated on making any decisions because as we now know, due to COVID-19, federal student loans are not only on hold, but it is on hold with 0% interest rate!

In March, I only made my minimum payment to my private loan. No contributions to my federal loans. And boy, am I glad I didn’t repay everything in the beginning of March. Especially since I’ve been faced with a series of bad timing.

First, I refinanced my federal student loans for a lower interest rate in February, one month before the 0% interest rate for the next 6 months would be announced for federal loans. 

Instead, because of my refinance I am now stuck with a 2.2% interest rate of private loan. I knew that refinancing came with a risk, but I think no one could’ve ever predicted that refinancing would cause them to have a higher interest rate.

Secondly, I made a huge $5,700 extra payment in December 2019 before I proceeded with my private loan refinancing that would’ve been nice as extra payments to my private loan that actually is accruing interest.

Lastly, because I fell behind in funding my Roth IRA earlier in the year, I played catch up and put down $3,000 in February, otherwise known as peak days before the market plunged by 20% over the next few weeks.

And if that wasn’t enough, I was in the process of interviewing for my dream job that was offering a part time position. I was considering it in hopes of it turning into a full time position, but since the whole COVID-19 situation, I can’t even fathom putting myself into that kind of job insecurity as a newest member of a team if a layoff were to happen. I thought the interview went well and they even followed up for a bit but have since stopped contacting me since COVID-19 hit. 

So far I’m four out of five in my bad timing. The only good thing I didn’t do was pay off my remaining Nelnet loan, which I now won’t be touching for 6 months. 

March 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 – 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 laugh so much at my $0 entertainment spending because literally I have just been on quarantine and avoiding people. 

The only restaurant outing I had was earlier in the month with a couple of friends and since then I’ve just been on lockdown mode which is turning out to be great for my budget. In fact, it’s the first month this year I’ve actually gone under-budget. I guess there’s a plus side to a pandemic after all!

Groceries – Over budget from grocery food since I’m barely eating out this month. Plus had to buy some new general necessities like hand sanitizers and rubbing alcohol due to COVID-19.

Shopping – bought some skincare products to replace my empty ones.

Miscellaneous

Parking – $5 for parking garage ticket.

Savings

While I was still reeling over the $3,000 I put into my Roth IRA in February before the market crash, there’s no use crying over spilled milk so I continued with my dollar-cost averaging strategy and contributed my $500 biweekly for a total of $1,000 this month.

I also have $500 direct deposited to my savings account each paycheck for a total of $1,000 in March.

Goals for Next Month

With this uncertain market, while I am fortunate that as a healthcare worker to have a fairly stable job , nothing is ever guaranteed so it would be foolish of me not to at least keep my savings rate high.

Thankfully I’ve replenished my $10,000 emergency fund since dipping into it and I’ll continue my $500 direct deposit each paycheck to my savings account to add $1,000 each month to my savings account.

I am $1,500 from maxing my Roth IRA for this year and I’m hoping to take advantage of the down market to finish maxing it by June. 

Net Worth Update

Almost forgot that end of March marks the end of the first quarter of 2020. I left 2019 with a net worth of $22,465.69 where I averaged a net worth gain of $22,500 every quarter.

Needless to say, I will be nowhere close to making those kinds of gains with the kind of market we’re in right now.

At first I was surprised to see that my net worth at least didn’t drop. But then I realized that while it may look good that my net worth still went up by +$12,312 this month, it is actually really bad considering that amount is less than my combined paycheck for this quarter, meaning a chunk of my paycheck just went down the drain. 

I was hoping to meet my first 2020 goal of having $100,000 in assets (not net worth), and in February I was sure that was going to happen. In fact, I was so optimistic thinking that three goals were going to be met in this first quarter: I would refinance my loans, I would get a new job, and I would have $100,000 assets.

Clearly that didn’t happen and the one thing that did happen (refinancing my loan) turned out to not even be in my favor anymore.

So, 2020 has been sucky to say the least. Here’s to hoping for better days. On the plus side my family and I are healthy and at this time, that’s really the most important and biggest blessing of all so I am truly thankful for that.