Paying my Student Loan and using the Baby Steps

I just finished my October budget for the month. I’m 3 days late on it (should be done BEFORE the 1^st of the month), but hey better late than never! This is the first month without my car note (paid off…YEA!), so I now have a little extra ($331) on a per month basis to put towards other items. As I worked on my budget I quickly realized even with saving over $300 per month, I still have a lot of areas in my finances I need to tighten up. I’m not doing bad, but I know there is room for improvement. I’m hitting the breaks…my financial goals 5 to 10 years from now is to be debt free and living the GREAT life!!!

I’m pretty happy about paying off my car early, but I can’t get too excited as I look at my ASTOUNDING student loan debt. I’ll admit I haven’t really put a lot of attention on paying it off because it is SO much. I pay my monthly payments and I then I don’t think about it again until the next payment is due. Now that it’s my only debt left, I’m sort of forced to confront my financial demon and take it on. In an effort to help me through this process, I decided to do the debt snowball in small pieces. Let me first say my student loans are from both my undergrad and grad studies. I was naïve in undergrad and just plain STUPID in grad school when it came to taking out loans. Sallie Mae has broken up my loan into different components and I decided to tackle each component separately.

There are 7 components all together, with the smallest balance in one of $5,039 and the largest component with a balance of $15,771. I’m going to adopt the Dave Ramsey baby step plan and tackle the smallest balance first ($5,039) and work my way down the list (smallest debt to largest). I put up a progress bar so I can visually see my progress and you guys can keep track as well. Keeping you all in the loop helps me be accountable. It’s a long journey, but I have to start somewhere…and that somewhere starts TODAY!

Looking at my budget, I’ve decided I will continue to contribute 5% of my income to a Roth IRA, which is only ½ of what my target goal is. With all of my household expenses and a tight spending allowance, I’m left with my car note ($331) to put towards the principal balance of my student loans. At this rate it’s going to take me a while to get through these loans, but I’m pretty determined to begin the process. I preach all the time about how not to be a borrower. I’m taking my own advice and baby step my way out of the tight grips of Ms. Sallie Mae.

I’ll keep you guys updated on my progress! Hey, let’s make this fun and join in with a financial challenge of your own. Track your progress and keep me updated!!!

Photo by: luluemon athletica