Fine print, Living with credit

My student loan repayment progress report: One year in

Sienna Kossman

A year ago I sat down to figure out how I’d fit student loan repayment into an already tight budget, and I made a cost-cutting plan to soften the debt blow.

Unfortunately, the one-year results of my diligent efforts aren’t nearly as positive as I’d hoped.

My student loan repayment progress report: One year in

Since entering repayment on July 21, 2014, I’ve only reduced my loan balance of $24,733.65 to $23,855.20. And when I filed my taxes, I learned $586.27 of my payments went toward interest alone last year. Ouch.

I haven’t paid off as much as I’d like, but after buying a (much needed) newer car, dealing with rising living costs and paying for long-distance winter holiday travel, I did the best I could with the budget I had.

I’ve successfully avoided adding ramen noodles to my diet, but because I didn’t make substantial progress overall, I’m revisiting my initial plan to see how I can pay down more of my student loan debt.

Here’s my first student loan repayment and budgeting progress report:

Original goal: Follow a monthly spending plan

When I made this goal last year, I was using a paper calendar to track my expenses. I quickly learned that although I like handwritten reminders, so many transactions were occurring online that it just wasn’t practical to budget on paper.

I also kept forgetting to update the calendar. I’m pretty sure it was stuck on August 2014 until almost Thanksgiving …

So I created a Google Drive spreadsheet that helped me see how much of my paycheck went where, what I could save/spend and what weeks I’d have to cut back more. Plus, since I have an Android phone, I can access the spreadsheet from absolutely anywhere.

It took a few months to get used to digital budgeting, but once I did, it helped me stay on track and afford slightly-more-than-minimum student loan payments — even after buying my car.

New goal: Continue to monitor spending, but focus on saving

I’ve been a diligent debt payer, but not a great saver. I’ve tucked away some money here and there, but I’m usually so focused on paying my bills that I often neglect my savings account.

Holding as much debt as I do, I’d be doing myself a favor if I could maintain an emergency fund large enough to cover living expenses and miscellaneous bills for six months — student loan and car payments included. I figured out that means I need to save nearly $8,000.


But, no sense in working this hard to control my debt if I immediately lose control the moment life throws me a curveball. I don’t have a solid savings plan at the moment; I’m just saving as much as I can. I have to start somewhere.

Original goal: More cash, less plastic

This one lasted about two weeks.

Cash is annoying, impractical and inconvenient. I’d keep forgetting to swing by the bank ATM after work and then need to pay with plastic. Plus, unexpected costs — such as a jump in gas prices or doctor-visit co-pays — can quickly derail an inflexible cash-only plan.

Carrying sufficient cash was too much of a hassle, so I went back to using my debit and credit cards while tracking everything online. I actually don’t remember the last time I had more than $10 in my wallet.

New goal: Use only one or two cards regularly

To more conveniently stick to my strict budget, I’m going to use only one or two cards regularly, rotating them occasionally to keep all my accounts active.

Using fewer cards means fewer transaction logs to review and credit limits to watch. It also means I can continue to build my credit and even earn some miles for this year’s holiday travel.

However, I will stick to cash when I know I’ll be in a situation that puts me at risk for overspending, like an evening out downtown.

Original goal: Trim excess costs

This goal was the most successful of the three.

Since last year, I’ve shaved $50 off my monthly car insurance payments by switching providers, reduced how much I spend on gas each month by almost 50 percent (new gas-sipping car perks), canceled two frivolous monthly subscription services and moved, which cut my living costs nearly in half. Overall, I’ve reduced my monthly expenses by about $900.

Plus, being more aware of where my money goes and frequently looking for ways to cut back has made me even more fiscally conscious than I already was. Success!

New goal: Continue to cut back

It never hurts to spend less on things you really don’t need.

In the next few months, I’m going to continue this process by making more coffee at home, switching to a cheaper cellphone provider and simplifying my personal care routine. Being a woman can get expensive pretty quickly, after all.

Every little bit I save counts, even if it’s just a few bucks here and there. Assuming these new plans go well, in a couple months I’ll be raising my monthly student loan and car payments and maybe I’ll even set up a more structured savings plan. I’ll keep you posted.

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