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.
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!
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.
Taxes are still too damn high even with Trump as president
Remember all the commotion regarding tax reform in 2018? It was supposed to be a silver bullet which would save the…
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.
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.
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
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