How we slayed our student loans

This should be the last we write about student loans …we’ve written about it here and here.

This post is to give you an idea how we paid them off in about 4 years. At the end of the post you will find a Google sheet where we have painstakingly documented every penny we racked up and how we paid them off.

Granted we had a couple of things going on for us. One, both of us were working full time when we accrued these loans, so we were paying back right from the onset. Two, since we were paying them off since when they were disbursed, we avoided snowball of these loans.

To make a some things clear,

  • This is not a step by step guide on how you should pay off your debts
  • The loan balance changed over time, right from the beginning, based on when loans were disbursed and when (every month) we applied payments to them.

We started with student loans in the fall of 2014. The first disbursement was $10,250 by Navient. The second one was in spring of 2015, again $10,250, again Navient. The third one was $7,500 in fall of 2015 by Discover. The fourth one was for $7,500 in spring of 2016, by Discover. Our total loan amount was $35,500.

The fifth and final one was a consolidation of the outstanding Navient and Discover loans into a low interest Earnest loan of $ $15,284.50. This was not on top of the $35.5k but the balance left on that.

We paid a total of $4,417.25 in interest on the loan, which is about 3.11% blended rate over the 4 year period we had the loans for.

Here you go then, in glorious, excruciating details, the trail of money of our student loans.

Changes in contribution limits to retirement plans in 2019

The IRS came out with a directive on Nov 1, 2018 announcing changes to contribution limits in 2019.

Here’s in a nutshell what is changing.

  • For employer sponsored plans such as 401(k), 403(b) – $19,000 (up from the current $18.5k)
  • IRA – $6,000 (up from the current $5.5k)
  • Roth IRA – $6,000 (up from the current $5.5k), with income phase-out range increasing from $193,000 to $203,000 (up from $189,000 to $199,000) for married couples filing jointly

You can read the original directive here or the technical guidance here.

Cheers to more saving!

October 2018

Ah, a real beauty of a month! Months such as this one show that the going is not always smooth. We’ve been in the midst of such a bull market that dips (not even correction) are sort of necessary to show people who joined the party in 2009 or later that the markets can fluctuate quite a bit in the short term.

oct2018

We lost a tad over $14k in net worth last month. Because our retirement accounts are by far the largest asset bucket it’s no surprise these are the accounts that took the largest hit. Taxable investment accounts and 529 account are down as well. Cash reserves grew. We put in about $3k into our debt obligations.

All will be well. We’re still pumping in the same rate into our retirement and taxable accounts.

Surprisingly, the major expense of last month was ….clothes and shoes, $570 worth of them! Astounding – I know. A pair of real nice work shoes, a belt, a sport coat, a winter coat, and alterations. All of these should last for years to come.

September 2018

sep2018

Another solid month. The key highlight to this month was stated in the last post. Another highlight was that M started on a new job. This job was lined up almost 10 months ago but the start was purposely chosen to be after the unofficial end of summer (Labor Day). We had one domestic and one international trip, each a week long, during the time M was enjoying time off between jobs.

One more thing of note. With the job change, and the corresponding change in salary, our combined annual income has gone past $250k. We will put up an income post for 2019 when we have the full year number.

The next near-term goal is to get the total assets up to a $1M by end of the year. Of course, a lot depends on the markets. As we have said in numerous posts, and will continue to reiterate, we fully acknowledge the huge role the bull market has played on our current state of affairs. We know the bears are bound to come at some point. We will ride those periods out.

Posts that give more context:

Who we are

Our income

Our Assets and Liabilities

Big news: Student loan paid off!

In March earlier this year we wrote about how we were consolidating a couple of student loans into one single Earnest loan at 3.25%.

The Earnest loan began on Mar 21st at $15,824.50 by paying off the Navient and Discover loans.

On Aug 13th we paid off the remaining principal of $7,248.22 and the interest accrued since the last payment of $7.10, to pay a wholesome amount of $7,255.32.

In less than 6 months we’ve paid it off! We paid $180.82 in interest in that period.

earnest_paidoff

Our remaining liabilities are the car loan and mortgage. At 0.9% standing at less than $14.5k we’re in no hurry to payoff the car loan. Mortgage is the next beast we intend to slaughter. At ~$217k, we anticipate to slay this in …wait for it …..4 years!

August 2018

aug2018

Another month where the trifecta of a) Socking money in retirement account, b) Paying down debt, and, c) Stock markets continuing in their upward trajectory – helped us in pushing our net worth close to $700k, notwithstanding the fact that we’ve been on one income for the whole month of August!

There were a couple of big expenses in August, all paid for by credit cards, which will be reconciled by cash this month and reflect in the next update. One of the expenses relate to travel (food and incidental; major categories such as flight and hotels were already paid for earlier); the other relate to a party we threw in August.

September heralds in a new job with a substantial greater income. Also, the outstanding student loan (~$8k) will be paid off by end of the end of this month (from the signing bonus of the new job).

Here’s what goes into our Assets and Liabilities.