Ever since my husband and I decided to get focused on accelerating debt repayment, it’s like a light turned on. Or a fire was lit? Something. We are looking at our finances totally differently in just a few short weeks and we’re so excited about the possibilities once we’re free of this load.
Of course, with any new goal there’s always the temptation to do everything at once. I love goal-setting. As soon as we started talking about paying our loans down faster, I basically wanted to cash out all of our savings and apply it to our balance. But obviously that would be a bad idea, so we practiced restraint and identified what felt (to us) like a safe amount of money. We wanted to apply a big enough chunk that it felt signficiant and that it was a marker of this mindset shift, but we didn’t want to dip into emergency savings or cash out some of our longer term investments.
Where we landed was moving some money we had been saving in a fairly low interest bearing account for a down payment (more on our ongoing debate about homeownership at a later point) over to our loan. So as such, here’s our August progress report:
- Starting balance: $165,923
- Regular monthly payment: $1,909
- August extra payment: $9,924
- New balance: $154,470
We paid a funky extra payment amount with the idea that we would kick-off with a nice even new balance, but mis-calculated how much of our regular payment goes toward interest, ha. Oh well – feeling awesome to start this journey with a big first payment.
It’s definitely not possible for us to make huge payments like that every month, but the idea of multiple loan payments a month feels exciting. This was also arguably the easiest month since no behavior change had to happen yet. Finding how to earn extra income and cut costs will be where the real hustle begins. It’s going to take awhile, but I’m feeling optimistic and looking forward to documenting this journey.