Everyone has a plan until they get punched in the face

John Cook
John Cook
Apr 22, 2019 · 4 min read

April 2019 is targeted to be a big month in my journey to pay off $170,000 of student loan debt. It’s the month where I planned to make a $34,000 payment towards my debt obligation, representing 20% of the total amount due, check it out below.

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The plan was for the $32,000 be derived from two sources:

1. $12,000 from my predictable monthly income stream 
2. $20,000 from a performance based bonus derived from exceeding sales expectations

I share this article has a sobering reminder that everyone has a plan until they get punched in the face. My one-two punch? A $6,000 personal tax liability, a $1,000 AC unit in my car needing placement, a $1,000 unexpected medical bill, a $1,600 business tax liability and a lower than expected sales cycle which cut my projected take home bonus from $20,000 to $10,000. All in the month of April, and all unexpected!

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If you’re curious about my tax liability, I’ve outlined the details in a recent post titled “The taxes (are still) too damn high”. Here’s a summary: the government thinks I’m an evil one percenter and has decided to curtail state and local income tax deductions which I normally claim as an itemized deduction, thereby reducing my tax liability.

But thank god I am able to afford these unexpected emergencies, which I paid for by reallocating my a portion of my planned student loan payment. Unfortunately, the $10,000 shortfall and $9,600 worth of unexpected expenses reduced my April student loan payment plan by $20,000 to just over $13,000 as outlined below.

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I’ve already made payment 1 and with the $724.78 now posted to my account, I can proudly say my total payoff balance is now under $158,000!

Since I’m paying above the minimum monthly payment of $2,000 I can choose how I want this $724 payment applied. I’m a fan of the ‘snowball’ method which applies all additional payments to the loan with the lowest outstanding balance. I’ve gone ahead and itemized each loan group which represents the original $170,000 loan balance and in turn, created a ‘pay off rank’ which defines how I want to apply any additional principal only payment, as outlined below.

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With my first 3 lowest loan groups already paid off, I’m in a position to tackle loan group B which corresponds to pay off rank #4. The $724 loan payment posted to my account this past Friday, and here’s the result

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With loan group B now just under $14,000 I’ll be in a position to apply my 3rd April payment by the end of this month which will drive the group B loan balance to just over $5,000! But as of 4/21/19, I can take solace knowing that my loan balance is finally under $158,000. #winning

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This story is published in Educated but Broke — a publication dedicated to helping you fight student loan and consumer debt by providing real-life, practical advice.

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