Living on Last Month’s Income

The concept of living on last month’s income was recently made popular by the folks at You Need A Budget (YNAB), and I learned of it from Stephanie over at Six Figures Under. While Stephanie convinced me of the benefits of living on last month’s income as she chronicled her and Mike’s journey out of six figures of student loan debt (most of which is breaking the cycle of living paycheck to paycheck), I was never willing to forgo making an additional debt payment to save for the following month. And for the most part, that was okay. Because University B pays on the last day of the month for that month (e.g. pay for January is disbursed on January 31st), I would use that income for the following month. Technically, I was living on last month’s income…but not really. I was still living on income from my most recent paycheck.

Organization C, unlike University B, does not pay monthly and instead pays on a biweekly paycheck cycle. Having worked at University B for almost three years, I have come to enjoy budgeting and paying all of my bills at the beginning of the month. Initially, I thought that biweekly paychecks with Organization C meant that I would no longer be able to pay my bills monthly. However, I realized that if I actually committed to living on last month’s income, my employer’s paycheck cycle would no longer matter. Beginning in March, I will actually begin living on last month’s income. This transition was made a bit easier because of the slight overlap in full-time paychecks from University B and Organization C. I was paid by University B on 1/31 and used that money to pay February’s bills. I will get paid by Organization C on 2/15 and 2/28 and use that income to budget and pay bills on March 1st.

I am excited about this transition, the continued simplicity, and the additional security it will lend my financial life.

Lunar Do-Over Day 3: February 3rd

1. How much did I spend today? – $0.00 – Today was my last day of travel for Organization C and I was able to expense my meal and travel. I just got home and my fridge is empty so I will have to do some shopping and meal planning.

February Variable (food, gas, misc.) Budget Initial Balance: $463.77
February Variable (food, gas, misc.) Budget Remaining Balance: $420.61

2. What financial information have I learned to help me when I’m debt-free? – See living on last month’s income above. I think this will significantly improve how I plan and budget forever.

3. How have I lived abundantly? – I’m sitting on my bed, 5 minutes to midnight, eating black cherry sorbet, and chatting with someone I really shouldn’t be. I may regret both of these things in the morning but at the moment…it feels good.

Applying to Medical School (3) : The True Cost of Attending and the “Sunk Cost” Fallacy

This post has been sitting in my “drafts” for quite some time and, honestly, I still probably wouldn’t have gotten around to writing it were it not for my upcoming review of my 2021 Financial Goals…

As I have shared with some of you who have written to me privately by email, at this time, I have decided not to pursue medical school. I have gone back and forth about this decision for YEARS, however, coming to terms with a few things has gotten me to a place of mostly contentment with this decision. A few things…

The few things mostly have to do with my motivations and desires. While these are enmeshed and overlapping, I will do my best to pull these apart here:

1) Sunk Cost – I think part of my motivation to continue down this path had to do with the sheer amount of time and money I had invested in this endeavor. Beyond just the upfront course costs, there was also the missed year of professional earnings, retirement savings, and accumulating student loan interests that resulted from me returning to school full time to take premed courses. When you make that sort of investment of your time and money it is difficult to walk away. Unlike if I had pursed a graduate degree or had been working, walking away was made more difficult because I felt like I had nothing to show for that time. I still feel this way. However, I have also come to realize that this “sunk cost” cannot be a primary motivator.

2) True Cost of Attending – One of the great things about being an older premed is that physicians don’t feel obligated to give you the “rah, rah, you can do it” pep talks. Instead, many of them were brutally honest about the “true cost” of a career in medicine, and how much more complicated that choice becomes for someone in their 30s. PRIOR to the pandemic, I talked to happy physicians who were supportive and encouraging, but I also talked to miserable physicians who talked to me about the constant sacrifice of time, happiness, and money that the study of medicine requires. While I think it is possible that I could have been one of those happy physicians, especially if I found a way to make medical school cheap, I realized that I was not willing to make the other sacrifices…at least not at this point in my life. For a long time, I think when I would have these thoughts I would just attribute it to me being a lazy person. I’m not a lazy person. Instead, I’m making a different choice about how to spend my energy, talents, time, and money.

3) Service to Community
– I turned to the pursuit of a career in medicine just before I graduated from graduate school. My own recent interactions with health professionals and my research on the reproductive care of black women made me passionate about ameliorating healthcare inequities. My academic work in graduate school had also left me feeling like “my feet didn’t touch the ground.” What did it matter if I could have erudite conversations with my fellow graduate students…how did that improve the lived experiences of anyone? While I don’t think the answer to that question is important to everyone, it is important to me. And it will continue to play a large role in shaping my professional work. However, medicine is not the only way to be of service to my community.

4) Stimulation
– And finally, prior to going to graduate school I was working a corporate job. While the pay wasn’t bad (seriously, I made more money at 26 without a master’s degree than I did at University B), I was constantly bored and unchallenged. I loved graduate school and was convinced that medicine would provide me with a way to continue being stimulated, while also being of service to others, and eeking out a decent living. As I concluded above, I realized that there are also other ways to do this that don’t require investing 7+ years of my life in additional education and training at the cost of many other things.

Okay. That’s most of it. Almost all of it. People in my life have had different thoughts about my journey with medicine and their influence on me was more or less significant at different points. When I made this decision, I didn’t talk to anyone about it. Didn’t ask anyone for their opinion. Didn’t solicit advice. At the end of the day, this is my choice and I’m the one who has to be comfortable with it. And, for the most part, I am. There is a chance that some of this contentment has to do with me finding an alternate path to achieving much of the above (I told y’all before that I’m a planner) but that is for another post.

I got a new job!

If you read my Misc. Income Report (Earned through 12/17/21): $243.01 post, then you might have known this was coming. If not, now you know!

For the past few months, it has been quite obvious that I have been frustrated with my boss and compensation at University B. In fact, I seriously thought about quitting and only backed away from that decision after I realized I would lose all of my employer matches to my 403b contributions as I had yet to meet the three-year vesting date. I was frustrated, a bit depressed, and felt stuck but I was planning to ride it out until July of 2022. How quickly things can change…

The week before Thanksgiving, a colleague and friend reached out to tell me that they had been made aware of a role with a non-profit for which they thought I would be a good fit. I reviewed the role and not only was my educational experience exactly what they were seeking but my work experience also matched up neatly with what the organization stated were its’ future objectives. Unlike most instances in which I would piddle around and ultimately not end up applying, this time, I invested significant time in writing a very tailored cover letter, updating my resume, and getting feedback about both from others. And it paid off.

The head of the organization reached out to me the week after Thanksgiving to set up an initial interview. I was then offered a second interview with a larger swathe of the staff for the following week. And this week, I was invited to a follow-up meeting with the head of the organization that was ultimately so they could feel out my continued interest and make me a verbal offer. I received a written offer less than an hour later.

AHHHHHHHHHHHHHHH! I cannot begin to explain how excited I am. As I have hinted at in all my posts this month, this is a career-defining opportunity as it means a significant increase in income (+$26,000.00) and positions me well, in terms of job title and responsibilities, for my next role.

I know that this is a personal finance blog and I owe you all the gory details as to what this means for my student loan debt repayment plans, and that post is coming, but for now, I just want to be ecstatic.

As always, THANK YOU all for your company and support along this journey.

Applying to Medical School (4): When the universe decides to call your bluff…

In an overly dramatic post last week, I shared with you all that I am sc-ared of deferring money from aggressive student loan repayment to apply to medical school. I mean, I said some other stuff, all true, but at the end of the day, the immediate consideration is that every dollar I put toward the uncertain process of applying to medical school is a dollar I won’t be putting toward my very certain student loan debt. While this anxiety isn’t new to me and has kept me company for at least four years, the universe seemingly got sick of my belly aching and decided to call my bluff…

Yesterday, I received a notification from the payroll system of University B (my current employer) that my pay-stub for a direct deposit being made this Friday (10/15/2022) was now available for review. Assuming it was an error or a resend of my monthly pay-stub, I initially ignored it. However, after reconciling my financial books last evening, curiosity got the better of me and I decided to take a peek. I was immediately confused. While the amount seemed familiar, I was confused as to why I was receiving a deposit on a biweekly payroll cycle. As I didn’t want any problems with my future paychecks, I immediately reached out to human resources representative for my division and asked her about the odd payment. She surprised me by informing me that it was for a retroactive payment for an extra duty I performed in August and that the amount was correct. Well…okay.

However, before I could even begin to obsess over how much closer the $323.00 payment was going to put me towards my goal of getting under $90K in student loan debt this year, I received an email reminder from the Association of American Medical Colleges letting me know that registration for the Medical College Admissions Test (MCAT), for the 2022 test year, would be opening today at 12:00PM EST for Group A testing sites (East Coast and Midwest testing sites). Yea.

An 8-hour beast of an exam, the MCAT has felled many a hopeful premed. It also doesn’t come cheap at $325.00. Yea.

So…the universe seemingly called my bluff with this pot of “found” money and I decided it was time to put-up or shut-up. The above is my MCAT registration receipt for the March 25th test date. This is more than enough time to really study for the exam, giving it my best effort, and determine whether or not I have a competitive enough score to apply. In the medical school admissions process, especially for an older student, your MCAT score is often the determining factor as to whether or not you get admitted to medical school. You receive your score approximately one month after you take the exam. For me, one way or the other, whether or not I will continue to pursue admission to medical school will be determined in April of 2022.

Applying to Medical School (3): All I KNOW is student loan debt repayment.

This is not the post I owe you but it is the post I need to write at the moment…

Despite the apparently cavalier approach to both my career and finances in my 20s, I am actually a risk averse person. I take “risks” but only after thoroughly assessing the potential outcomes and weighing them against my interests. In the past, my happiness and intellectual interest has been given far more weight that it perhaps deserved. Or not. I was young and theoretically I had time to “recover” from any missteps. And I did. I am recovering.

Part of that recovering has been paying off my student loan debt. Paying off my student loan debt doesn’t really come with risk. While there is a chance that I could end up better off taking a different approach where I invest earlier, every dollar I put towards my debt leaves me in a better financial position than I was previously. The plan to paying off debt is really clear. there are no risks. There is no uncertainty. Earn more. Save more. Spend less. Send in extra payments.

Applying to medical schools is not a certainty and it is a very expensive and time consuming process (which I have detailed extensively in the past so I will spare you here). For this reason, I have been dragging my feet on applying. Ultimately, I dragged them long enough that it was not possible for me to get a seat for the MCAT that would be accepted during this application cycle. At first my response was a reflexive panic that this choice/opportunity/avenue had been taken away from me. Followed immediately by relief and new plan making. “I could apply to schools that accept a January MCAT or I could sit for the MCAT in January…or I could wait an apply next cycle…or…or…or.”

All I know is student loan debt repayment. Applying to medical school seems scary not because I won’t get in or because the road to being a physician might be long or hard. It seems scary because it would require that at some point in the very, very near future that debt repayment (picking up gig shifts, spending very little, etc.) take a back seat to the application process for medical school. And that feels super uncomfortable to me so over the past few months I have been trying to consider every other career path that might make me happy that wouldn’t require that I de-prioritize my student loan debt…because all I know is student loan debt repayment.

But time is running out and I need to make a decision soon. My best friend asked me, “What if you didn’t have any student loan debt? Would you go to medical school?” My response was, “Absolutely.” Her response was, “Then that’s what you should do.” I think she is correct. I also think it is an oversimplification of the costs and risks associated with pursuing a career in medicine at this stage in my life.

At this stage in my life… Let me not pretend that I have not considered, ad nauseam, how pursuing a career in medicine at this stage in my life might complicate dating or having a family. Let me not pretend. Let me not pretend that Dude Avery’s questioning of my choice, and disapproval, didn’t make me feel a bit insecure or like I was making a mistake. Let me not pretend.

There is a lot going on in my head…which is why I haven’t written a medical school application update post in quite some time despite promising to do so. I am scared and worried that I am once again being overly self-indulgent and that my continuing to pursue medicine is something I will one day regret…perhaps because so many physicians with whom I have spoken seem to regret it.

All I know is student loan debt repayment.

When to refinance? (Part I)

I had hoped to procrastinate put off refinancing considerations until at least December but the time has come…

Just prior to the start of this blog, I tried to refinance all of my private, non-federal student loan debt. At the time, my student loans were in the $120Ks and I was turned down because my debt-to-income (DTI) ratio was too high. After licking my wounds and snacking through my disappointment, I went on to reduce my student loan debt by $30,000.00 over two years. While some of this success can be attributed to frugal living and hustling, the interest rate forbearance on federal student loans, due to the ongoing COVID-19 pandemic, played a significant role. $75,441.87 of my remaining student loan debt is in federal student loans and prior to the interest rate forbearance my loans gain $400.00 each month in interest.

As the Department of Education, and President Biden, have stated that there will be no additional extensions of the interest and payment forbearances, I have been going back and forth as to when I should again try to refinance my student loans. Up until last evening, I was thinking about January 2022. The last day of the federal interest and payment forbearance is January 31st. Waiting until January would allow me to take advantage of the remaining interest and payment abatement and give me enough time to pay off Private Student Loan 4 (PSL4); my student loan balance would also be under $90,000.00 which would be a much improved DTI ratio. However, while scrolling through articles last evening, I came across “Another student-loan company is shutting down its services, bringing total number of borrowers in limbo to nearly 10 million.” In this article I learned that both PHEAA, who manages the servicing of PSL4 through the American Education Service payment platform, and Granite State Management and Resources (GSMR), who is the servicer for ALL of my federal student loans, will not be renewing their service contracts with the federal government once they expire at the end of December. Yeah.

At first, I didn’t know how much this would change my plans. I planned to have PSL4 paid off in December so if I stuck to that goal, PHEAA bowing out wouldn’t affect me a great deal. However, GSMR not renewing it’s contract is a much bigger deal. GSMR has actually be a great student loan servicers and I have never had any of the problems that other folks have complained about with other servicers. Additionally, unlike the ECSI Heartland payment platform that is used to service my university student loans, the GSMR payment platform is really great and allows you to find all of the detailed information about your student loans that I love to obsess over and easily allocate targeted payments. However, beyond the inconvenience of losing a great servicer, I am most concerned about the possibility that my federal student loans, all 12 of them, might not end up with the same student loan servicer; I know this is a possibility because it was the case prior to my student loans all being serviced by GSMR. Not only was it incredibly annoying but it made a mess of my credit report as existing student loan lines were marked paid/closed and new ones were opened. Yeah.

I think I should
refinance. And if I refinance, I think I should refinance in December. I know what you are thinking: why the general uncertainty? Well, as soon as I refinance, I lose the benefit of the 0% interest rate on my federal student loans. And at $400.00/month, that adds up quite fast. Additionally, as the possibility of me returning to school full time in the near future is still a possibility, I also need to think carefully about giving up some of the benefits of federal student loans. One of those benefits is the graduated income repayment plan. While I had no interest in the long term benefits of the plan (such as loan forgiveness after years of program payments), I was heavily benefiting from the fact that I had no payment due while my income is so “low,” which has allowed me to allocate all of my additional income towards paying off my more expensive/precarious student loan debt. Once I refinance, I give up that benefit which means that in as little as 30 days from the date of refinance, I will have to begin making payments which could greatly impact my ability to pay off PSL4 and PSL2, both of which I had hoped to pay off prior to refinancing my federal and university loans.

Yeah…so much to consider. At the moment, I am leaning towards refinancing my student loans on December 1st. And maybe evening lumping in PSL2 with my federal and university student loans so that in January 2022 I am just making one payment.

Yeah.

I Quit?

Shockingly, this is not click bait. And this time, I’m not talking about a part time role…

I am underpaid. While I have believed this to be the case for some time now, being underpaid during a global pandemic is an awkward position to occupy. Unlike folks who lost their income or their lives, I have remained employed and healthy. For that reason, despite my belief knowledge that I am underpaid, I was prepared to gratefully accept my meager wages (yes, I understand that my salary isn’t terrible but this is also a role for which a master’s degree is required). That was until I learned that my new colleague (who I already really like) gets paid almost $7,000.00 more than I do….

Before you say, “But AP…” I would kindly ask you to hush-it. I sat on the search committee for that role and know that my new colleague and I have similar educational backgrounds and professional experience. However, it wasn’t until my new colleague and I were having a candid chat about how little we both get paid that they let their figure “slip.” I was shocked. While I had an idea that they made more than I do, I don’t know what it was about hearing them say it out-loud that made me so angry…and hurt. I had directly communicated to my boss during several one-on-one conversations over the past year that I believed my role warranted a salary adjustment. The department had increased the role title from a coordinator to an assistant director without a commensurate change in salary band. My boss, who loathes confrontation, continually said complimentary things about my work and endeavored to make me feel “heard” while demurring on the actual issue of salary.

So on Tuesday, after that candid chat with my colleague, I sat down to calculate the true cost of quitting my job. I calculated how much I would have to earn an hour to replace my current salary and included benefits like health insurance, employer 401K and HSA contributions, and death/disability insurance. After I came up with the hourly or daily rate I would need to stay afloat, I decided it seemed “doable” and concluded that it wouldn’t be so very difficult to find another role at my current salary. Then, I sent my boss (who I like a great deal) an email with the subject line: Planned Resignation. In the email, I explained that I was planning to resign but that I wanted to speak with him about how I could depart without causing serious damage to the programs I manage. Unsurprisingly, he schedule a one-on-one with me for an hour later.

I went into that meeting a bit sad but comfortable with the decision I had made. My boss also seemed sad and asked if it was about my salary. I was honest and told him it was but also offered that a new role would give me an opportunity to continue my professional development. It was at this time that he disclosed that he had recently gone to his boss to inquire about both a bonus and a salary adjustment for me. And that while he could not disclose the amount, that his boss had approved both. I was…shocked. And sad. We spent the next ten minutes talking about how much respect we have for one another and we ended with him encouraging me to think about it over a couple of days.

It didn’t take me a couple of days. With some of my anger now diffused, I did a bit more investigating and learned that the unvested portion of my 401K was in excess of $12,000.00. Which meant that if I left prior to the vestment in the Spring of 2022, University B would take back its $12,000.00 in contributions. Ummmm…no. I also spent a bit of time thinking about the other people with whom I work that would be negatively impacted by my abrupt departure, the community I support, and the students I advise. With that $12,000.00 being a significant factor, I concluded that two weeks notice did not seem like enough time.

On Wednesday, my boss and I met again. I thanked him for the grace he had extended me and asked him if he would be amenable to me staying on until the end of the academic year. It would give me enough time to transition to my next place in life, for my 401K to become fully vested, for me to wrap up loose programming ends, and enable them to conduct a candidate search during the height of hiring season (I have a somewhat specialized role). He said that he was glad to have a bit more time with me and encouraged me to keep him apprised of my plans as the year progresses. And that was that…for now.

There is obviously a lot more to this story, a lot more to the relationship I have with my boss, and a lot more going on with where I am at this moment… The only thing of which I am very certain is that I just gave myself a deadline. A deadline by which I have to have a new plan. And instead of feeling scared or anxious, I feel relieved. I have become comfortable and complacent in my current role, and scared to rock the boat less I disrupt my predictable monthly student loan debt payments. However, that isn’t me. That has never been me. I have deadline. I have a goal. And I am prepared to do whatever it takes to meet it.

Forbearance or no forbearance?

This post is coming in after my self-imposed Friday posting deadline because 1) I am studying for general physics and organic chemistry exams next week, and 2) I hate posting just to post, and I wasn’t sure I had anything about which to write until this evening…

This evening, I received an email from American Education Services (AES), the student loan servicer for Private Student Loan 3 (PSL3) and Private Student Loan 4 (PSL4). The email directed me to my message inbox where a decision about my forbearance request awaited me. Huh? Thinking it might be SPAM, I ignored the email link and logged into the website through my browser. Upon opening the message in my inbox, I was informed that my in-school forbearance request had been “approved.” I toggled over to the loan details page to see the following:

That’s right. I have been approved for an in-school forbearance on PSL4 until January of 2024. What?

So, how did this happen? I have no idea. I obviously did not make this request. I am also very confused as to what triggered it as I have been in-school previously (I completed a master’s degree and was enrolled for a second bachelor’s degree when I began completing medical school prerequisites three years ago) and an in-school forbearance was not automatically applied to my account. My financial situation was much tighter during both of those periods so I would have applied had I known it was an option.

I don’t know exactly what to do or if this really changes anything. While it will be a stretch, PSL4 is targeted for payoff this year. Given that interest would still be accruing, would there be any benefit is pausing payments on PSL4 and applying them to PSL3? It seems like the only benefit would be psychological in that it would allow me to be even more aggressive in targeting PSL3. However, it seems like a potential “cost” would be the interest accruing on a slightly larger PSL4 balance for the six or so months while I pay off PSL3.

Additionally, while PSL4 does continue to accrue interest during an in-school forbearance, my University Student Loans do not… Actively applying for an in-school forbearance on my University Student Loans would effectively lower my interest rate on those loans to 0%. While I could also forgo payments on those loans and apply that minimum payment to PSL3, a part of me thinks it might make more sense to continue making the minimum payment on those loans, allowing the 0% interest rate to stretch the minimum payment that much further.

Thoughts?

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?

I know, I know…the last revision of 2020 Financial Goals

So last night I wrote my ah-ha post. The ah-ha moment is still true and I’m not taking anything back. However, this morning, while still obsessing over my debt, I found this awesome, free, ad-free, no sign-up How soon could I pay off my debts? calculator. This was obviously the absolute worst thing for a debt obsessive person like me to find. However, in the era of COVID-19 and Saturdays spent at home, it could obviously have been a lot worse.

The calculator is no-muss, no fuss and is great for someone with a lot of individuals lines of debt because it allows you to enter up to 20 creditors. To calculate a repayment plan, it ask for: the creditor, the balance, the minimum payment, the actual payment, and the interest rate. Additionally, you can enter how much additional you plan to pay each month and any on-time payments you expect to make (like a bonus or tax refund). Again, the absolute best and worst thing for a debt obsessive person to find. After entering in this information it spits out what your repayment would look like using a roll-over method of repayment (also referred to as the “snowball”), and you can have it compute the results based on paying the debts in 1) lowest to highest balance, 2) highest to lowest interest rate, or 3) shortest to longest payoff period.

Other cool things: It also tells you how much you would have saved over the same period of time as your original payment plan if you invested the amount you would have paid (you can also adjust the interest rate and below I adjusted it to a very modest 2% savings rate). AND, while I have only included the tables below, it also produces a very awesome debt payoff calendar for each creditor so it shows you which month you will pay off each creditor.

Note: These payment plans assume a January 2021 start since I still plan to pay of PSL 1 and then save for a used car through the end of this year unless my income increases significantly. This means, the debt balance and repayment plan does not include PSL1 or my car lease/car payment but does include estimated minimum payments on my federal student loans which will resume in January 2021.

1) Lowest to Highest Balance

2) Highest to Lowest Interest Rate

3) Shortest to Longest Payoff Period

Unsurprisingly, the “Highest to Lowest” interest rate resulted in the greatest amount of savings in terms of both money and time saved. However, whereas with the “Lowest to Highest Balance” and “Shortest to Longest Payoff Period” eliminate creditors/loans in the very first month and then consistently every couple of months, it takes 11 months before the first debt is eliminated under the “Highest to Lowest” interest rate payoff plan. Ugh.

And just for fun, I calculated what my repayment plan would look like if I increased the extra payment each month up to $1500.00. For the sake of space here, I will only include the updated “Highest to Lowest Interest Rate” and “Lowest to Highest Balance” below.

1) Highest to Lowest Interest Rate

2) Lowest to Highest Balance

While the “Highest to Lowest Interest Rate” still results in the greatest amount of savings between the two methods, paying $1500.00 more each month still shaves off more than a year of repayment than if I am only paying an extra $1000.00 each month regardless of which method I choose…

I will admit to being torn. While I very much would like to stick to the most mathematically efficient way to pay off debt, I will admit that the “Lowest to Highest Balance” method does hold some appeal at this current moment when it has been almost a year since I had the psychological reinforcement of paying off a debt, and I still have three more months until I payoff the next one…

So…thoughts? Am I entirely nuts for finally for finally wanting to swallow the Ramsey kool-aid and go “Lowest to Highest Balance?”