November 2020 Budget Forecast / October 2020 Budget Review

I overspent in my October 2020 budget by $454.68. There. I said it.

Let’s get to why I am not freaking out as badly as I might during any other month…

October 2020 Budget Review

YIKES! What the heck happened? I was so excited as I was creating this budget that I put a note for myself at the bottom of the budget! I had crushed it in September and then…this. October was one of those months where a lot of things (some predictable, some unpredictable but preventable) came together in a way that was financially costly. Like, locking my keys in my car and having to call a locksmith to get them out at 11:00PM at night 😳 I also got sick (Not COVID-19; I think we forget that there are still other viruses and bugs out there waiting to prey on our immune systems) and began ordering take-out soup and comfort food. I was bad. And the social-political tension in the United States didn’t help. (I work in a student affairs role and have to provide support to students who are stressed out, anxious, and experiencing mental health concerns. It can generally be a bit draining and this significantly increased over the past few months.) Over the last two weeks or so I had a low level of anxiety about work and all that is happening in the U.S. Unfortunately, food is my crutch. Working on that.

This should be freaking me out. I should be ashamed AND worried about no longer being able to meet my early December goal for a three (3) month emergency fund ($5,000.00). But…I’m not really worried. Why?

November 2020 Budget Forecast

I worked hard in October. And while this isn’t an excuse to blow my budget, it does mean that some of that hard work is paying off in November and cushioning the impact of my overspending…

1) I picked up shifts at my regular part time gig – I blogged about that in a post on the cost of earning more. Overall, the extra shifts I worked over these ten days resulted in approximately ~$181.94 in additional income. (That is not net income and does not include the increased fuel costs).

2) Activity referee – As I mentioned previously, I sometimes serve as a referee for an activity that has transitioned successfully into the virtual space. While this does mean the number of opportunities for refereeing are more limited, and I am now competing against a larger and more qualified pool of candidates for gigs; ultimately, when I do find a gig, they are still pretty lucrative. This month, I got paid for work done primarily in October and I was paid $300.00.

While some of the additional income was used to payoff my spending from October, and pad my November FDGM budget, most of the additional income went towards my emergency fund as planned. In fact, because of the additional November income, I now expect to have my emergency fund completely funded on December 1st when I get paid by University B, AND to still have a few dollars to restart aggressive debt repayment. I KNOW!

Part of me is like, you could have been done even faster if you had been more careful and disciplined in October. The other part of me is like, my debt repayment journey will be long. I will undoubtedly fall short sometimes. It seems like the most important thing is not to lose sight of the end-goal and to keep going.

P.S. Sorry it’s late Ellen 😓 I didn’t have it in me to write on election day. Hello to all my new visitors 👋🏿

November 2020 – Student Loan Balance(s) Update

To the numbers…

AccountDebtMin. PaymentInterest Rate
Private Student Loan 1$0.00$110.460.000%
Private Student Loan 3-$11,447.27$153.826.660%
Private Student Loan 4-$10,429.97$245.403.750%
Private Student Loan 2-$7,361.36$93.305.160%
Federal Student Loan 1-$21,440.37$0.006.800%
Federal Student Loan 2-$13,946.84$0.005.310%
Federal Student Loan 3-$11,184.47$0.006.800%
Federal Student Loan 4-$7,748.09$0.004.450%
Federal Student Loan 5-$5,561.12$0.004.450%
Federal Student Loan 6-$3,147.30$0.005.600%
Federal Student Loan 7-$2,863.10$0.004.660%
Federal Student Loan 8-$2,457.12$0.006.800%
Federal Student Loan 9-$2,307.18$0.006.800%
Federal Student Loan 10-$2,003.02$0.005.600%
Federal Student Loan 11-$1,639.01$0.006.800%
Federal Student Loan 12-$1,144.25$0.005.600%
University Student Loan 1-$4,138.83$60.418.000%
University Student Loan 2-$3,220.95$42.435.000%
University Student Loan 3-$672.09$30.008.000%
University Student Loan 4-$479.25$30.008.000%
Total-$113,191.59


October 2020 – Student Loan Balance(s): -$113,667.51

November 2020 – Student Loan Balance(s): -$113,191.59

Difference: $475.92

Nothing to see here. I continue to make minimum payments on all of my student loans as I take a respite from accelerated debt repayment to beef up my emergency fund to $5,000.00, which I will achieve in December.

As I stated last month, the current interest rate abatement on federal student loans means this is a bit less painful than it could have been as I don’t have to watch my overall balance increase from interest accruing on my federal student loans. The other bright-note is that interest rates continue to drop, which isn’t great for saving, but it means my minimum payments go that much further each month.

On election day (cause I’ve already voted and need a distraction), I will come clean about October spending (yikes) and my November budget forecast.

The cost of earning more…

I still love my part time job. It’s mindless and I’m pretty good at it. And my bosses treat me like a rock star because I show up and do my job. It’s a low bar for sure and I’m nailing it.

Unfortunately, the place/worksite of my part-time job is undergoing significant renovations so the work has been scaled back a bit. While previously I could count on being on site between two and three hours a night ($20.00-$30.00), the renovation means that I am often only on site for between 45 minutes and an hour. However, the company I work for guarantees a two hour minimum, so even when I am only on site for 45 minutes, I still earn $20.00. Not a bad hourly rate. Unfortunately, consistently earning this minimum would result in an overall decrease in my paycheck when compared to what I was earning when I was putting in two and a half to three hours an evening, which is why when the company asked me if I would cover someone else’s shift at another site, for $15.00/hour and a guaranteed three hour minimum ($45.00), I agreed. Because all I could think about was the few extra bucks I could hastily put into my emergency fund so that I could return to paying off debt.

But there were things I didn’t think about, like the extra half hour of commute time in traffic. While my usual gig (worksite) is only nine minutes from home, this second gig (worksite) is about a half-hour a way with traffic. (Not to mention the associated increase in fuel costs). I also didn’t think about how much those extra hours, in addition to the first gig and my full time job, would cost me in terms of scheduling anxiety. My role at University B often results in evening obligations and I have been juggling like a mad-woman all week. It also just makes for a pretty long day/week. I am…tired.

I agreed to cover the second site through next Friday so I am just going to tough-it-out until then. However, this has reminded me that I need to think about the total cost of earning more.

Note: In many ways, this blog serves as an outlet for me as I go about my debt repayment journey. However, I also realize that at some point in the future, some other person, perhaps on a similar journey, may read it. For the sake of that person, and anyone else who might read it, I want to be honest about how I feel at different moments along the journey. Yes, there is the elation of pay days and huge debt repayments. But there are also moments where you are just a bit tired, sad, and wish you had made different financial choices. I think it’s important to be honest about those moments too.

October 2020 Budget Forecast

So…I have been hemming and hawing about it for some time, but despite tepid concerns of over-posting, over sharing, and mild embarrassment, I am going to post my budget again. You’ll remember I posted my budget once back in March and then promptly never did it again. However, a thought I had after my most recent post, “Income Update/Am I saving enough?” is that my debt repayment progress, savings goals, etc. don’t really make sense if you (the reader) don’t have some idea of the context in which I am making those decisions. Okay. Enough preamble. To the numbers…

For the most part, my budget is pretty self explanatory. Today, when I paid my bills, for the first time I noticed that I had one less payee or account to log into this month as a result of paying off Private Student Loan 1. It was a good feeling.

The (*) – My federal student loans were in a deferment on an income-based-repayment plan that generally requires renewal each December. My income relative to my student loan balanced meant that my required payment was $0.00. On March 13, 2020, the interest rate abatement and temporary deferment on all federal student loans superseded this, which was continued by the CARES Act and another subsequent Executive Order. While I had initially expected my income to increase this year, and possibly render me no longer eligible for my current payment under the income-based-repayment plan, because University B froze all bonuses, merit increases, and cost of living adjustments through September of 2021, I may still be eligible.

The (**) – This amount reflects the increase from additional responsibilities at University B.

Paycheck from University B – This is a net amount after taxes and other deductions like health insurance, dental, and 401K. I currently contribute 2% of my income to receive an 8% match from University B. This is pretty awesome, BUT you have to stick around for three years to keep the match. Given my current salary, and that my second anniversary will occur prior to the end of the salary freeze (which means no increase prior to my third anniversary) I can’t say with absolute certainty that I will make it to three years. However, like many things, that is a post for another day.

Food, dining, gas, and miscellaneous – I know this amount is going to seem woefully low to some folks. It’s not a ton and I won’t be able to keep it that low forever, but while the pandemic continues to severely limit social engagements, I work from home, and I remain single, I might as well dig deep.

Debt Repayment – All of this means that my allocation for EXTRA money towards student loan debt repayment is now $1,429.85. (This is in addition to the $657.31 I already make in minimum payments.) Well, for now, that is the amount I am contributing to my three month emergency fund. Whether or not I push the increase of $129.85 to savings/investment come January remains to be seen. As of today, the poll results from my question as to what I should do with the additional amount is currently 60% in favor of saving/investing and 40% in favor of putting it towards student loan debt repayment. I have to admit that I was a bit surprised. Although, I probably shouldn’t have been. This is the internet and there are bound to be significant differences of perspective on this issue. On that note, if you haven’t already voted, but feel strongly one way or another as to what I should do, you can vote on the poll here or leave me a comment.

Thoughts?

October 2020 – Student Loan Balance(s) Update

Okay, this is the post I have been dreading. The one where I have to reflect on making negligible student loan debt repayment progress because I am focused on beefing up my emergency fund to cover three months worth of expenses ($5,000.00).

Ugh. To the numbers…

AccountDebtMin. PaymentInterest Rate
Private Student Loan 1$0.00$110.460.000%
Private Student Loan 4-$10,642.35$245.403.750%
Private Student Loan 3-$11,536.88$153.826.670%
Private Student Loan 2-$7,420.84$93.305.400%
Federal Student Loan 1-$21,440.37$0.006.800%
Federal Student Loan 2-$13,946.84$0.005.310%
Federal Student Loan 3-$11,184.47$0.006.800%
Federal Student Loan 4-$7,748.09$0.004.450%
Federal Student Loan 5-$5,561.12$0.004.450%
Federal Student Loan 6-$3,147.30$0.005.600%
Federal Student Loan 7-$2,863.10$0.004.660%
Federal Student Loan 8-$2,457.12$0.006.800%
Federal Student Loan 9-$2,307.18$0.006.800%
Federal Student Loan 10-$2,003.02$0.005.600%
Federal Student Loan 11-$1,639.01$0.006.800%
Federal Student Loan 12-$1,144.25$0.005.600%
University Student Loan 1-$4,171.83$60.418.000%
University Student Loan 2-$3,250.02$42.435.000%
University Student Loan 3-$697.64$30.008.000%
University Student Loan 4-$506.08$30.008.000%
Total-$113,667.51$765.82


September 2020 – Student Loan Balance(s): -$114,144.74

October 2020 – Student Loan Balance(s): -$113,667.51

Difference: $477.23

So…yea. That does not inspire the warm and fuzzy feelings I had on September 1st after having my second largest debt payoff month to date. To be fair, it could be a lot worse. I am very fortunate to be taking this savings respite from debt repayment during the continued interest rate abatement for federal student loans. Were that not the case, there is a very real chance I could have seen my overall student loan balance grow this month. *shudders*

There really isn’t much else to say this month about my student loan debt repayment. However, on the heels of a meaningful change in income, questions about savings, and some reflection on my blog, I’ve decided I probably need to share my budget again. 😨 That will happen…tomorrow.

Income Update/Am I saving enough?

I know, I know. The same woman who was so impatient to get back to debt repayment that she made a post about it, is now asking, “Am I saving enough?” I will address what led me to ask this question momentarily. First, an income update…

Part Time Job

As I shared in an earlier post, I picked up a part time job. And…I actually love it. It’s usually two and a half hours per day (a minimum of two hours and a maximum of three hours), Monday through Friday. After I wrap up my day job, I get changed and head over to my evening gig. As of the this post, I have been there about six weeks and I have only encountered two other people, both of whom were wearing masks and who spoke to me from across a room. I go to the site, I complete my tasks, and I head home. I don’t think about it before I show up or after I leave. It’s mindless and when I first started I was listening to music, but recently, I have begun listening to personal finance and business podcasts…

So…umm…what’s the downside? The pay. I am currently earning just $10.00 per hour. While that isn’t a terrible wage, given the cost of my education and professional experience, it seems like my time could should be spent earning a higher wage. And I’m working on that. But for now, the additional income is very much appreciated. For the month of September, I earned the following:

Paycheck (9/11): $195.28 (I, thankfully, did not have to work on Labor Day…)

Paycheck (9/25): $237.23 (I covered someone else’s shift.)

Given how modest my income is relative to the size of my student loan debt, this consistent, additional income will meaningfully help me along on my debt repayment journey.

Additional Responsibilities

At my full time job at University B, I recently took on some additional responsibilities. While this is often an unsaid expectation at colleges and universities (that faculty and staff will perform uncompensated labor in service to the university), due to the nature of this role, I will actually receive a very small stipend. While this labor is significantly more intellectually and emotionally taxing* than my part time job, I was interested in the role because it is in-line with my long term career goals before I learned it came with a stipend.

University B pays us on the first of each month but the HR payroll portal allows you to see your pay stub about a week before payday. I logged in today to discover that the monthly stipend is $200.00 which after taxes and 403(b) contributions (which are a percentage of my salary), resulted in a net increase of $129.85.

While this stipend isn’t life changing by any means, it does represent a very modest improvement in my ability to pay off debt…or save…

*This job requires I work a couple of evenings, during one week, every two months.

DIY Money

Above I shared that while at my part time job, one of my favorite things to do is to listen to podcasts while I work. Currently, I am listening to DIY Money. Hosted by Quint and Daniel, it is straight-talk about personal finance and investing presented in a super accessible way. The show’s outgoing message sums the show up pretty well: “The key to wealth is simple: Live on less than you make, invest the rest, and do so for a very long time.

They have over a hundred podcasts and I have just made my way into the double digits but one of my favorites thus far is, “Like a Roth to a Flame.” In this podcast, in addition to learning a ton about Roth IRAs, one of the key takeaways for me was, “You don’t get time back.” As I went about my tasks, I began to think about my financial journey and where I want to be in five years. Not to be Carrie Bradshaw but, “Is being debt free enough?”

As I progress through even more of the DIY Money podcasts, it is clear that Quint and Daniel are not in complete agreement on this question. Quint believes there are three categories of debt: 1) bad, bad debt (credit cards, store cards, rent-to-own agreements, pay day loans, etc.), 2) bad debt (student loans or automobile loans), and 3) debt (mortgage). He believes that one should only have category 3 debt or a mortgage remaining before one begins to invest. This perspective is pretty Ramseyesque. Daniel agrees that category 1 debt must be eliminated, but thinks investing is possible with category 2 debt remaining depending on individual circumstances (interest rates, stage in life, overall portfolio, other obligations, etc.).

Looking Ahead

I know she has to be tired of me name-checking her by now, but one of the things that stuck out to me the most about DDSW’s debt free post (Double Debt Single Woman Has Paid Off Over $142,598 and is Officially Debt-Free!) was that not only was she out of debt but that she also managed to amass considerable assets along the way. (Note: I am confident I make significantly less than DDSW, so I am not worried about having as much as she has at the end of my journey. Instead, I am looking at it as a model for potentially doing both debt repayment and retirement savings.)

Another somewhat recent addition to my blog reading list is Millennial Mayday. Despite starting off with an enormous amount of student loan debt ($200,000.00), Avery seems to have done everything right. While they have received some support from their parents, they were smart and took on this kind of debt for a six-figure profession (pharmacy), hustled to pay it back, moved back in with their parents, refinanced where appropriate, and invested and saved like a beast. Which is why it’s not really surprising that less than three years into their journey, Avery already has a positive net worth. As I was reading through their debt update posts, I noticed their repayment slowed a bit and Avery explained that with just under $50,000.00 in student loan debt remaining, they have decided to invest even more

For all of the reasons you can imagine, the DIY Money podcast, DDSW’s post, and Avery’s blog have me really thinking about my long term financial goals and what I need to do now to get there…

P.S. I know I was super vague about exactly what my part time job is. That was obviously intentional. However, unlike secrets I plan to keep, like my identity, this is one I will give up once I’ve paid off my debt. I am sure there will be other secrets along the way, and at the end of this journey, I plan to divulge a few.

Penny Pincher Meals – Zucchini Pasta

Zucchini is not the cheapest vegetable but this dish includes so few ingredients that it doesn’t really matter. I began making this after I found a spiralizer at Kroger for only $4.50. It’s so easy (total prep and cooking time is less than ten minutes) and cheap, that it’s now a staple meal for me. While I usually eat this alone, I could see myself adding some garlic bread. Perhaps some of that heavily reduced french bread found at Walmart or Jimmy John’s in the evenings with a bit of butter and garlic…

Item NameWeight/UnitTotal CostServingsServing CostRecipe CostSource
Zucchini2lbs (3 medium fruits)$2.092$1.045$1.045Aldi
Tofu – Soft14oz/396g$1.495$0.298$0.298Kroger
Mushroom/Onion Pasta Sauce24oz$1.495$0.298$0.298Kroger
$1.641

The “cooking” for this is so simple I almost don’t need to include it…

  1. I begin by peeling and spiralizing one and a half zucchini. Alternatively, if the skin is in pretty good condition, sometimes I just clean it really, really well before spiralizing.
  2. Spiralizing the zucchini will result in the fruit being cored. I set the core aside and save it to add to the sauce.
  3. I put a medium (5) quart pot on the stove and heat the pasta sauce.
  4. I shred the unfrozen soft tofu and add it to the pasta sauce. I also add the cored zucchini that was leftover from the first step.
  5. Once the sauce is hot I add the sprialized zucchini. I mix this until the zucchini is fully covered by the sauce and warm. Note: The goal is not to “cook” the zucchini but to warm it up. If you cook it too long, too much water will release and you will get mushy noodles instead of the firm al dente style noodles you want.
  6. I add to a bowl and that’s it! You can add garlic powder or Parmesan cheese to garnish.

    Cheap, lite, healthy, and delicious.

But, but, Afro Penny, wouldn’t regular pasta be cheaper? Sure. Pasta, like other starch staples, can be found dirt cheap in most places. However, whenever I can easily incorporate more vegetables into my diet, I try to take advantage.

Penny Pincher Meals – Egg Fried Rice

When you have a huge debt and a rather modest income, in addition to earning more, you still have to find ways to make cuts to the budget. One of the ways I do that is by having a rather lean food budget. Dave Ramsey calls it, “Eating beans and rice.” The Penny Pincher Meals posts are where I share what “beans and rice” looks like for me.

When I previously shared my monthly budget, there was some concerns that I might be making unhealthy (lacking in nutrients and volume) cuts to my food budget. To be fair, that is a pretty valid concern. I love watching YouTube videos on extreme budget meals but I have found that many are either very involved/time consuming or incorporate very few fresh vegetables. Which makes sense. To save money you often have to trade time/convenience or nutrition. Fortunately, as an African American woman with roots in the South, I grew up eating and loving the relatively cheap leafy greens. Read: Collard greens, mustard greens, turnip greens, and kale (way before it was cute). Many of my meals substitute greens for other more expensive veggies like broccoli or spinach. I even substitute turnip greens for lettuce in salads. (Seriously, try this.)

Egg Fried Rice

Perhaps my current favorite greens for veggies substitution is egg fried rice. A couple of my variations are below…

Egg fried rice with turnip greens and scallions.
Egg fried rice with curly mustard greens.
Egg fried rice with mushrooms and turnip greens.

“Ummm, AP, doesn’t all fried rice have eggs in it? Why is this egg fried rice?” Yup. Traditionally, fried rice does include eggs, however, they usually also feature a meat (pork, chicken, etc.). Because I am a vegetarian, I don’t include meat and feature (include a lot) eggs.

You’ll notice that my recipe cost for some items is much higher than the manufacturer suggested serving size/cost. That’s because for some things like rice, I know I eat more than the suggested serving size; and, I am definitely heavy handed with seasoning. You could make this even cheaper if you stuck closer to the recommended serving size but I want to be honest about how I prepare the dishes and what it cost me. Another point is that the eggs and the greens are the only consistent items in this dish. I added portobello mushrooms here because they were in the reduced bin at Kroger for $0.75 a carton.

The actual cooking is pretty simple and only uses one pot.

  1. I cook the egg(s) in the bottom of a five (5) quart pan on medium heat using one (1) tablespoons of olive oil.
  2. After the eggs have completely cooked, I add the turnip greens.
  3. Once the turnip greens have cooked down, and most of the water has evaporated, I add the cooked rice and mushrooms.
  4. In a small bowl, I mix one part rice wine vinegar to one part soy sauce, and add it to the pot. Note: This step is completely optional and you can just use straight soy sauce. However, soy sauce tends to overwhelm this dish for me (perhaps less so if meat was incorporated) so I lighten it a bit with rice wine vinegar.
  5. Cook on high heat.
  6. Once the mixture is “dry,” I add mushroom seasoning* to taste.
  7. Plated (or bowled) I add garlic powder to taste, and that’s it!
This stuff is amazing and is a delicious salt substitute in many dishes. (Note: It is not a low sodium salt substitute). You can find it at almost every Asian grocery store.

I have definitely cooked this other ways that had a lot more steps and a lot more ingredients, however some things went away because I just didn’t happen to have the ingredient on hand one day (onions/scallion or green onions) and then it became one less ingredient for me to buy; however, I do incorporate them when I have them. Other ingredients, like fresh garlic, went away over time as I tried to figure out how to make the dish cheaper and easier (I’m kind of a lazy cook). I began with fresh garlic, which turned into minced jarred garlic, which finally turned into garlic power. Honestly, at this point, there is no reason to go back to using fresh garlic for this dish.

Which student loan(s) should I pay off next? (Vote!)

I know, I know. I’m supposed to be focused on saving. Listen, I told you who I am at the very top of this blog: “Climbing out of $130,000.00 of student loan debt, one obsessive post at a time.” It’s not my fault if you didn’t listen…er read. (Note: It took me many years to learn the life lesson that you need to listen to people when they tell you who they are and not who you imagine or want them to be).

So I haven’t changed my immediate goal. My immediate goal is still increasing my emergency fund to $5000.00 by the end of the year, which represents about three (3) months worth of fixed expenses, INCLUDING my minimum student loan payments. (Note: Some of my student loans, such as my university loans discussed below, can be very easily deferred due to hardship, which would allow this money to stretch a bit further). However, the process for saving is pretty simple. There is no real strategy required and on the first of the month (and on the biweekly pay cycle for my side gig), I just need to transfer money into my savings account. Pretty simple. Pretty boring.

So, my mental energy has instead turned to which student loan(s) should I pay off next? This turn in mental energy is helping me to stay motivated while saving and probably results from the fact that my income has increased since taking on the part-time job and will increase a bit again on October 1st. I will discuss these increases later this month in an income update when I will have a month’s worth of paychecks from the part-time gig and my October pay stub. Unless I move this increase to savings (like retirement savings…but that is another post) I could very well reach my $5000.00 goal early and could possibly return to debt repayment this year. I know!

I have decided that in 2021, I would like to pay off at least $20,000.00 in student loans. This would bring me to the mid 90s and probably allow me to qualify for a traditional refinance. So my question should actually be, which two student loans should I pay off next?

University Student Loans

I broke down my student loan debt pretty extensively in the aptly titled post, “The Breakdown.” But a Cliff notes version is: my university loans are held by my Alma mater (they are the lender and the servicer) and while they have terrible FIXED interest rates, the university is very generous with its deferment/hardship policies, which are periods in which no interest accrues. These loans are also forgiven in the instance of death or permanent disability.

So if you review my most recent debt update, you can see that these four loans have a mix of interest rates. Using this NerdWallet Weighted Average Interest Rate for Student Loan Consolidation calculator, I determined that collectively, my four university student loans represent the following:

Yuk. Generous repayment terms aside, that interest rate is atrocious and that monthly payment is nothing to sneeze at.

Private Student Loan 3

I hate this loan. It’s one of those loans that I have already paid back far more than the original balance, the interest rate is atrocious and the balance is gross.

Private Student Loan 3-$11,628.07$153.826.670%

Even in this environment of pretty low interest rates, the variable interest rate on this loan is still 6.670%. At peak times, this interest rate has been over 9%. Ugh. It is serviced by the same student loan servicer as Private Student Loan 4. I have exhausted the hardship/deferment/forbearance on this loan which means it sticks around in the event I lose my job or suffer other financial hardship.

Private Student Loan 4

This is the first private student loan I ever took out. It is serviced by the same servicer as Private Student Loan 3. It was prior to the 2008 recession and has a decent interest rate but a very significant minimum payment. In fact, outside of my rent payment, this is the largest payment I make each month. As of my student loan update on September 1st:

Private Student Loan 4-$10,854.06$245.403.875%

While this loan has a variable interest rate, the rate has never quite reached 6%. Using the Dave Ramsey method of paying off debts smallest to largest OR the avalanche method of paying of highest interest to lowest interest rate debts, this loan wouldn’t be on my radar. However, the minimum payment on this student loan represents a significant amount of cash-flow each month and if I were able to knock-it-out, it would really help me gain some traction on my debt repayment.

So, what should I actually do?

September 2020 – Student Loan Balance(s) Update

The U.S. is still a mess, blah, blah, blah. I’ve made some changes in my life recently in terms of eating, exercising, and creating space, and it has paid immediate dividends in terms of my physical and mental wellness (mood). I am perhaps as well as I could be under the general circumstances. For that, I am grateful.

This is my first student loan balance update in my new digs and I’m kinda geeked. So, to the numbers!

AccountDebtMin. PaymentInterest Rate
Private Student Loan 1$0.00$110.460.000%
Private Student Loan 4-$10,854.06$245.403.875%
Private Student Loan 3-$11,628.07$153.826.670%
Private Student Loan 2-$7,481.42$93.305.410%
Federal Student Loan 1-$21,440.37$0.006.800%
Federal Student Loan 2-$13,946.84$0.005.310%
Federal Student Loan 3-$11,184.47$0.006.800%
Federal Student Loan 4-$7,748.09$0.004.450%
Federal Student Loan 5-$5,561.12$0.004.450%
Federal Student Loan 6-$3,147.30$0.005.600%
Federal Student Loan 7-$2,863.10$0.004.660%
Federal Student Loan 8-$2,457.12$0.006.800%
Federal Student Loan 9-$2,307.18$0.006.800%
Federal Student Loan 10-$2,003.02$0.005.600%
Federal Student Loan 11-$1,639.01$0.006.800%
Federal Student Loan 12-$1,144.25$0.005.600%
University Student Loan 1-$4,204.61$60.418.000%
University Student Loan 2-$3,278.96$42.435.000%
University Student Loan 3-$723.02$30.008.000%
University Student Loan 4-$532.73$30.008.000%
Total-$114,144.74$765.82


August 2020 – Student Loan Balance(s): -$117,823.78 (Adjusted: -$116,605.43)

September 2020 – Student Loan Balance(s): -$114,144.74

Difference: $2460.69 – 2nd highest debt payoff month to date!

NOTE: I know. I know what you are thinking. You’re thinking, “Hold up, AfroPenny, the difference between -$117,823.78 and -$114,144.74 is $3679.04 not $2460.69.” I know. But some of you other eagle-eyed readers probably noticed that my table no longer has the line “Car Lease.” That’s because my car lease will come to an end in December and I haven’t figured out what happens then. There is a world where I just return the car (only pay wear-and-tear and a mileage overage), buyout the lease (~$9000.00 – my car is a 2018 with less than 35,000 miles so I couldn’t buy a car in similar condition for that much), or, take a hand-me-down from my parents. All are worthy options and I haven’t decided exactly what I will do yet…

Because this blog focuses on my student loan debt, I don’t really feel guilty about removing this line; the adjusted amount above reflects the removal of the car lease from the August 2020 balance. I will provide an update about the car situation at some point in the future but whatever option I choose, it has to support the long term goal of having zero debt as I end my 30s in 5.25 years.

That aside…not bad! As I shared above, this makes it my second biggest debt payoff month to date. This came down to a couple of predictable things: the continued interest rate abatement of federal student loans, lower interest rates on private student loans, and the fact that I had to hus-tle to pay off Private Student Loan 1 before the balance transfer ended on August 16th.

From now until January 2021, I am focused on building my emergency fund up to $5000.00. I hemmed and hawed as to whether or not I would use my side job money to help me reach this goal. I realized later that I am not as interested in “saving” as I am in debt repayment and that I needed a mindset shift. For now, the goal is to get $5000.00 in my emergency fund by December 31st, 2020, or earlier, by any means necessary. (That sounds far more dramatic than it actually is because I will reach this goal as long as I stay employed).

3 Things for which I am grateful:

1) Being under $115,000.00 in student loan debt.
2) Second highest month in terms of debt repayment.
3) First student loan I have paid off since I started blogging.

And finally, I am grateful for folks who have continued to check in with me and lend support (C and DoubleDebtSingleWoman) and for new folks who have recently stopped by to say hello (Hello Ellen!). Paying off a debt this big is very isolating in real life (way before COVID-19) and I am so very grateful for your support along the way.