Welcome to my May 2018 student loan debt progress! I think this is the most excited I have been to write a debt progress post. I made a lot of contributions to my student loans this month. And *drumroll please*… I paid off another loan!

Debt paid this month: $8,687.01

Debt remaining: $116,595.66

Check out my overall debt progress here.

I’ve been feeling down these past couples of months. But this month, more than anything else I was feeling angry that I was starting to lose focus on my student loan payments. I made no payments to my student loans at all in March and April which means the last time I made payments was in February.

This month is the first month I am back to a fairly stable income so I wanted to make major payments to my loans to make up for the two months I’ve missed.

Out of all my student loans, I have two with interest rates > 6%. Of these two, I worked hard to pay one down to a balance of $7,687 so I really wanted to pay it off ASAP. Back in February, my goal was to pay off this loan by May and I really thought this plan was going to get delayed at least until June since I stopped payments for 2 months.

But alas I did it just in time!

What Worked

I consider this month a major success so I wanted to assess what worked well. After some careful assessment, it was clear to me that these four things were the driving forces behind this month’s success.

1. I had a concrete short-term goal in mind.
2. I worked a lot. I made sure to pick up any available shifts even on weekends to get extra cash.
3. I charged my expenses to my 0% interest credit card to allocate the majority of my income to loan payment.
4. I lowered my saving after deciding to only keep $3,000 in my saving account and put the rest into loan payment.

The first step I took was to put down $4,000 at the beginning of this month. This came from money that was mostly saved up the two previous months when I did not make any payments to my student loans and I had kept as an emergency fund.

After binging on Dave Ramsey’s show, I decided to lower my savings amount to $3,000. He actually recommends only $1,000 in emergency fund while in debt, but for the sake of my fragile heart, I am putting more.




This month alone I had to take my car for a major service and found out it’s time to get all my tires replaced. So this entire ordeal alone cost me ~$1000 which is why I just don’t think a $1,000 emergency fund is enough.

This whole month I also worked a lot. I took extra shifts that no one wanted (I worked the entire Memorial Day weekend and almost every weekend of May) to make extra money. As soon as I received my May paycheck, I put $3,687 on my loan to finally pay it off!

I also received ~$1,000 from my previous part-time job which was a good surprise. I’m assuming it was vacation hours that I never took that they’re reimbursing me for. That went straight to the next loan I plan to tackle which is the last of my 6.2% interest rate loan.

My Dirty Little Secret

Before you think I must be making over $10,000 a month to be able to pay $8,000 loan in a month, I will tell you that in total I made ~$5,400 + $1,000 (unexpectedly from the part-time job).  So how did I pay $8,000 this month? Well, $4,000 of that came from savings so next month’s debt progress will definitely be less than this month’s.

But I also contributed $4,687 this month from a $6,400 total income which technically only leaves me with ~$1300 to live off the whole month. Considering I pay $1000 to my mom each month ($500 for rent, $500 for my loan) that leaves only $300!

And no, I didn’t live on $300 this month. So what did I do? Well, here’s my dirty little secret.




I charge all my monthly expenses to my 0% APR credit card. I know a lot of people frown upon credit card debt. And I don’t like it either. In a perfect world, I would be paying off my credit card in full every month. But in a perfect world, I also wouldn’t have six-figure student loan debt.

I am only utilizing this method because I know it works for me. If you think it may work for you too, I actually talked about How I Don’t Pay Off My Credit Card and It Saves Me Money.

Personally, I have done this with a previous credit card and it worked beautifully. I paid off the credit card before the 0% interest rate promotional period ended so I never accrued any interest charges from my credit card.

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.




Other than my $1000 monthly rent/personal loan I pay to my mom and $56 cell-phone bill I pay to my friend, I charge everything else to my credit card.

However, just because I don’t pay off my credit card in full every month doesn’t mean I don’t keep track of it. I use Mint to track my spending. I have a strict budget of $400 a month excluding rent. I went over this month by $100 though since my dad was in town so we went out quite a bit. 🙁

While it is absolutely doable for me to pay off my ~$500 credit card expenses each month, it makes more sense to me to put that extra money to my loan that is actually accruing interest at a rate of 6.21%. I periodically pay it off to make sure my credit card utilization stays below 30% to prevent my FICO score from plunging.

Goal for June

I really like the idea of having goals for each month. I attribute a huge part of my success this month to having a short concrete goal with an exact dollar amount that I can easily track. Since it clearly worked to keep me motivated this month, I am going to start putting a goal for every month of my debt progress posts.

The goal for June is to start 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 $23,354. I mentioned in last month’s progress update that I’d like to get down to $100,000 by the end of 2018. It would be great to have this loan finished by end of 2018 too which means I would have to contribute $3,500 per month to make it happen.

Stretch Goals

I used to not believe in Stretch Goals thinking it is a set-up for failure. However, I set a goal for myself this month that I didn’t think I could accomplish and actually did so I am going to give Stretch Goals a try.

I’m a huge fan of the quote, “shoot for the moon, even if you miss you’ll land among the stars.” So I am going to view stretch goals as shooting for the moon while keeping in mind that it’s okay to miss that goal because I would’ve at least given it a try.




So my Stretch Goal is to contribute $5,000/month to my student loans. If I am able to follow through with this goal, I will pay off this loan and be under $100,000 debt by end of October instead of December.

I think this is doable because other than the $1000/month I pay to my mom for rent & loan and my $56/month cell-phone bill, I can charge everything else to my credit card which leaves me to spend almost all my income on my student loans.

After I get down to $100,000 I will promptly pay off my credit card balance which should still be on 0% APR.

FYI: my parents helped pay ~$40,000 for grad school so that is what I mean by paying my mom loan. I pay her $500 for rent and $500 for my interest-free loan which I don’t mind at all. I would much rather help my parents out by renting from them than renting from some stranger.