For the educated and broke fans following the journey,
The reason for this insanity is interest. The interest on my student loan balance is approximately $27 a day or $800 a month. When I make a $2,000 student loan payment, approximately $800 of that will go to interest before any principal reduction takes place. Do you know how much interest your student loans accrue per day, per week or month? Do you know how to calculate your student loan interest? Read my article “Your student loan interest is keeping you broke and here’s why” to learn how to run the numbers for yourself , because you will be shocked. Interest is the single largest reason why your student loan payments do not see any principal reduction.
What’s my goal?
So i’ve made 9 payments towards my massive $170,000 student loan debt. But what’s the end goal? When am I going to see the light at the end of the tunnel? Based on my projected earning potential in 2019 and 2010
I work in a sales role which has quarterly bonus payouts. This explains the projected April/June/September/December/February additional payments. On bonus months I’ll make a projected $19,750 payment towards my debt and on non-bonus months I’ll make a minimum monthly payment of $9,000. In order to make this work in my budget, I’m actually going to live on beans and rice. I’ve outlined a detailed explanation of my monthly zero-based budget in the article below, where I take home around $16,000-$17,000 per month.
When I say out loud “I am going to make a $20,000 student loan payment”, it honestly makes me cringe at my total lack of financial responsibility I had for myself. For example, this month (March 2019) I made two payments for a total of $2,002. When I peel back the onion and look at the principal to interest allocation, I see a disappointing reality. Over 40% of the payment, or $825.76, was applied to interest and only $1,110.84 was actually applied to principal reduction.
As I write this I honestly feel a little bummed out. On one hand
Unfortunately, there’s no turning back the hands of time. In addition to throwing all of my money at my student