by Ashley
You guys! I have another fun debt-related thing to celebrate today!
After nearly TWO YEARS of blogging here (officially started in March 2014. Here was my first “application post“), I’ve FINALLY and forever more fallen below the six-digit-debt threshold! When I started blogging two years ago we had $150,000 of debt. Our combined household income at the time was not quite $50,000/year. After paying off over $25,000 in our first year and over $26,000 in our second year, we’ve FINALLY crossed this major milestone in our debt-repayment journey. Never ever (aside from mortgage) will we EVER have six-digit level debt. That’s insane! We still have a long way to go, but it really feels like we’ve started gaining speed and making good traction. Our only remaining debts are medical and student loan (which, to this point, we’ve been paying mostly minimums on). I CANNOT WAIT to really start making some headway on those bad boys!
Here’s our January debt update:
| Place | Current Balance | APR | Last Payment Made | Last Payment Date | Original debt, March 2014 |
|---|---|---|---|---|---|
| Capital One CC | - | 17.9% | - | Paid off in March 2014 | $413 |
| Mattress Firm | - | 0% | - | Paid off in May 2014 | $1381 |
| Wells Fargo CC | - | 13.65% | - | Paid off in May 2014 | $7697 |
| BoA CC | - | 7.24% | - | Paid off in June 2014 | $2220 |
| License Fees | - | 2.5% | - | Paid off in April 2015 | $5808 |
| PenFed Car Loan | - | 2.49% | $3189 | Paid off in January 2016 | $24040 |
| Navient | $82,271 | 6.55%-8.25% | $279 | January | $80761 |
| ACS Student Loans | $8596 | 6.55% | $20 | January | $8215 |
| Balance Transfer student loan (Former Navient 1-01) | $2112 | 0% (through April 2016) | $500 | January | $5937 |
| Medical Bills | $5911 | 0% | $25 | January | $9000 |
| Totals | $98,890 (Dec balance = 102,502) | $4013 | Starting Debt = $145,472 |
It was tough to swing this monstrous sized debt payment (just over $4,000!!!!!) and, as you’ll see in an upcoming budget update post, in order to balance the budget we had to forego a couple of savings items I’d really wanted to squeeze in this month. But February is a new month and we’ll be full-steam ahead on our next course of action, which includes building back up a healthy emergency fund, saving money toward a down payment of a home, and getting into a bit more comfortable position before we really start slugging those student loan payments. It pains me to see that, for instance, we paid $279 toward Navient this month and yet, our balance actually grew a little compared to last month because that payment still didn’t even cover the interest accruing on the loans (though this is, indeed, over our minimum payment, which is only $206/month). We’ve got to stop the bleeding and so, even though I’m considering it a “minimum” payment while we beef up our savings a bit, I’ll be increasing our student loan payments to at least cover the interest (I’m considering it “minimum” because it will still be a very minimal amount at first as our focus will be on trying to build an EF. But I will increase it from the official minimum so that we aren’t seeing a growing balance every month).
It’s so exciting to get to celebrate these recent wins after such a long period of what has felt like stagnancy. Even though we’ve been whittling away at our debt all along (so we’ve never really been stagnant), the “wins” have felt few and far between in the past year or so. Paying off the car/becoming consumer debt-free, and now dipping below the 6-digit-debt threshold both feel like huge breaths of fresh air. Like we’ve just been given a giant pat-on-the-back for all of our hard work. It really gives us the momentum to keep on rolling.
As I look at the year ahead, of course no one can really be certain what to expect, but I see good things ahead. Last year was a tough one. Nothing terrible happened, but there were lots of changes/re-adjustments as I started a new job, dealt with a lot of father health issues, and just tried to find my place in life a bit. This semester is starting off great (I really am so lucky to truly love what I do!), the financial year is starting on a high note, we have an all-cash paid vacation in a couple months, we have plans to buy a house this year(!!!), and I just hope this is setting the tone for what will be a fabulous 2016. I couldn’t be more excited! So much to be thankful for!
I hope we can all pause today and reflect on something that makes us happy or something we are thankful for. Even in the most trying times, I find it to be a helpful exercise. : )
Hi, I’m Ashley! Arizonan on paper, Texan at heart. Lover of running, blogging, and all things cheeeeese. Freshly 40, married mother of two, working in academia. Trying to finally (finally!) pay off that ridiculous 6-digit student loan debt!
Congratulations! That’s a huge milestone, and it should certainly be celebrated. You’ll have a couple more great wins before you know it when that balance transfer is gone and you have your vacation!
AWESOME!! Wonderful news!
Great News! Kudos to you! I hate all sorts of debt. I cannot even stand a mortgage but sometimes life is what it is…
Nice job Ashley! You’re miles ahead in the interest game right now versus just paying the minimums. You probably weren’t even close to being in a position to think about a mortgage a few years back.
Congratulations! What a huge milestone. Thanks for sharing your story with us.
Would you have any desire to knock out the medical bills? I know they are 0% interest but at $25 per month, they will take you forever to get rid of…I’d hate to have them hanging around – if you could get rid of them and the balance transfer, you will only have those two student loans to worry about.
I have thought sort of the same thing here. Once you rebuild your EF and pay off the balance transfer how about increasing the amount paid to this medical bill each month–maybe $100 a month? It will still will take a long time to pay off, but you will see some incremental movement in the balance. Mental win? It technically still is debt and if you don’t pay it they could send it to collections (obviously not going to happen here).
Forget the medical bills, kill Navient! Their rotton customer service will provide the steely resolve you need to get rid of these forever.
I’d definitely make Navient the #1 priority after emergency fund and balance transfer. Talk about a company that toes the line of fraudulent and delights in throwing new hurdles and curveballs. It makes sense to continue to use the balance transfer strategy to save some interest.
The only other thing I’d change would be to up the minimum on ACS. I would calc out what the monthly payment would be to pay it off in 24 or 36 months – whatever amount still allows you to focus primarily on Navient, but still make a bit of noticeable progress.
I would argue that “toeing the line” is a bit generous. In my opinion, they’re blatantly stealing from me! My once-subsidized student loan that they suddenly made into an unsubsidized loan has still never been corrected. I’ve contacted them countless times. I got a third party group into the mix. I’ve contacted my local legislators about it. No resolution.
Ashley – have you filed a complaint with the Consumer Federal Protection Bureau about your Navient issues? Creditors really respond and get to fixing things when the CFPB is involved. Actually the CFPB may made a good post here at BAD. Good luck!
That’s truly inspiring. And what a load off, right? It’s amazing the emotional toll that debt takes.
Congratulations Ashley! I’ve been busy over the past few weeks reading the archives of this blog right from when Tricia first started it. I’m so delighted that you have stuck to your goals and achieved in such a huge way. Its been inspirational to read here and I wish you the best as you continue to pay off your debts.
Thank you! I’ve binge-read a ton from the archives, too! There are some really compelling stories/people’s lives that have been shared here!