Parent PLUS debt down: $2,502.96
Mortgage lowered: $215.69
Overall debt reduction: $2,718.65
In January, I paid $3,067.37 toward the Parent Plus loans. While few months compare to December’s super smack down to debt, I’m feel like this is settling in to be a typical month of debt reduction for me lately.
My goal 10 out of 12 months this year is to pay $2,000 toward debt. There are two months I plan to pay more: September when I (hopefully) get my bonus check and December when my parents gift me money. The months when my boyfriend pays me rent (which he has been doing every month lately), I plan to pay $3,000 toward debt.
Coming up with my $2,000 payment is going to be a bit more challenging than it has been, I believe. A few months ago I cut my hours back at my part-time job, and I have finally started to miss the extra money. It’s costing me about $300 to gain about 40 hours back into my life a month. Is it worth it? Hmmm….it certainly was at first. But now that the holidays have passed and it’s just blah February and March, I’ve been toying with the idea of working more hours again. I’ll mull it over while I drink a glass (or 10) of wine tonight.
Looking at my chart above, I’m super happy to see that Loan #3 is now solidly in the $14k’s. It’s also motivating to see #4 teetering close to the $15k’s. The total balance for all of the Parent Plus loans stands at $98,806.76.
Have you noticed that Loan #5’s balance continues to rise? That’s happening because I have not yet been required to pay on that loan. Why would I not pay on it if I’m trying to reduce debt? It’s because I’m following Dave Ramsey’s snowball plan, where I pay on the debt with the lowest balance first and only pay minimum payments on the rest. My first minimum payment for Loan 5 will be due on March 4th (which will come out of February’s income). That will slow the progress on my current focus loan by about $350 a month. Even with that reduction, my snowball effect on Loan #3 will still be at least $700 a month for a total payment to just that loan of at least $950.
Here’s what that looks like in chart format for the visual learners out there:
While it’s a major bummer that my progress will slow down, at least the balances will finally stop growing on ALL the loans.
Other debt reduction posts:
Obituary: Parent Plus Loan #2
December Debt Reduction
November Debt Reduction
October Debt Reduction
Obituary: Parent Plus Loan #1
September Debt Reduction
August Debt Reduction
July Debt Reduction
June Debt Reduction
May Debt Reduction
Obituary: Parent Plus Loan #7
April Debt Reduction
August Debt Reduction