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$374.24

May 27th, 2015 at 03:07 pm

I had another entry written, but then I stumbled across a very interesting article and decided to go with embarrassing but necessary honesty instead: I have been irrationally complacent, and I can’t even tell you why. I owe $13,669.14 at 7.6% interest, and do you know how much has been paid toward this debt on through the IBR repayment plan in the last two years? The online statement has it right here in black and white: $374.24. In that two years, how many unnecessary things have I thoughtlessly wasted money on? How many times have I bought breakfast or a snack at work through sheer laziness even though there was food at home? I've never thought of myself as the type of person who buries their head in the sand before- this article was really a wake-up call.


The link is here, with the caveat that tough love works for me, but it's hard to read: http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/#comments


So now what?

I'll eventually be paid $670 for a recent side job- they can be slow mailing the checks out, so I'll pay this toward my GradPlus loan now and refund it back into the account when that eventually shows up. I tend to keep a certain amount of cash on hand in case it's needed when the bank is closed, etc, but if I'm being honest, it's probably an unnecessary amount. Since that money isn't earning 7.6% interest, I'll deposit and apply some of that as well. Last week I was paid back for picking some things up for a friend while running errands, $80 cash, which can be another snowflake.



That brings me to
670 side job
80 payback amount
200 cash funds
---------------------
$950 for debt payoff

Right now the interest in that account comes to 1107.30, so in the spirit of recognizing the urgency, I'm adding another $160 from savings to make a total payment of $1110. From here on out, I should start seeing some payments actually applied to principle!

I'll update the official numbers when the payment finishes processing and shows up on the website, since I'm not sure which day they add in the new interest.

8 Responses to “$374.24”

  1. creditcardfree Says:

    Yes! Your using snowflakes!! You can do this. Debt at this rate or above is an emergency in this economy. That is one of the best articles on MMM. Smile Cheering you on!!

  2. MonkeyMama Says:

    Oh that is one of the best debt articles I have ever read. (I have it linked somewhere on my blog). That's the thing though - it's the attitude about debt that is *everything*. If you accept it, you will always have debt. At a very simple level that is the long and the short of it. I am always amazed how hard people work to get out of debt just to jump right back in. IT takes a while to re-learn or get less comfortable with the debt.

    Good for you for snapping out of it and getting angry at that debt!!

  3. My English Castle Says:

    Agreeing with all these sage women--excellent article.

  4. snafu Says:

    I suggest reviewing your specific GradPlus contract as often it's possible to have any extra sum applied directly to principal while the regular, required monthly payment is applied to interest as well as principle.

  5. Greenleaf Says:

    Hi Snafu, I did look into that, but unfortunately the terms of my loan dictate that any payment be applied to interest first (called and confirmed this with the servicing company staff as well as checking the written agreement.) That would have been great though!

  6. crazyliblady Says:

    Wow. That's terrific. I would not beat yourself up too much about student loans. It took 7 years for me to pay mine off and a friend of mine is still paying hers off over 20 years later. I love your idea of using snowflakes and "pay back" money for paying more to the debt. Have you ever tried to refinance your loan(s)? A few years after making payments on mine, I was able to refinance at a lower rate and lower payment. I kept up the same payments, though, which also helped.

  7. Kiki Says:

    Wow! Great payment! With that payment you have paid off 8%! How does that sound?

  8. CB in the City Says:

    Awesome article -- so, so true! No one should be worrying about "quality of life" when there is debt to pay. Destroy the debt first! THEN play!

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