At the beginning of this month, I ran the numbers for my finances and it looked like I was going to be able to finally knock down the small student loan that has been my payoff focus since I paid off nelnet last year. I get paid on the first of the month (or near there, depending on holidays and weekends) and expected to have the note paid off soon after that. As I write this, it’s the 24th, and not only have I not paid off the loan, I inadvertently missed my monthly payment to it (update – that’s not true, they actually did post my payment). Clearly, I’m not happy about this. Hopefully, I’ll be able to pay this off soon, but a whole bunch of things have really gotten in my way.
First, after I told my dad I thought I could pay off the loan, he said that he was about to send them a check (thanks dad!). I said ok (cause who wants to turn down free money!), just let me know when you send it, then after it posts, i’ll go pay it off. He sent it over 2 weeks ago, and they have cashed the check, but it still hasn’t posted online. I cant pay it off until that change is reflected, because the last thing I want is to overpay and then have to wait for a refund from them.
Along with that, those of you who have direct loans noticed they took the website down at the beginning of the month, and have an outside service handle the loans. I dont know exactly who they think they are, but they should know by now that you cant take a website down for 10+ days anymore with no one noticing – it’s not 1993. Someone’s going to notice, and they are going to want to do something with the site. (I wouldnt be surprised if all of the students who had auto-withdraw payment scheduled on the 7th and the 14th now have a missed payment warning because the system didnt transfer over bank account info. You had to go re-enter it yourself, and the site was down for those days.) Way to go, guys. (I’ll stop whining…..now)
So, once that loan gets paid, I’ve got to decide what to do next. Those long-time readers may remember me thinking about this situation last year, It was a big deal in my mind because of the rate I had been paying down debt up to that point. I figured by my calculations that I’d have this loan paid off by March 31 of this year at the latest. Well, obviously that didn’t happen. I wrote 2 posts on this last year, one was here about my car being a monthly cash hog. It’s not as bad as it used to be because I now walk to work, but I still pay quite a bit to it. The other was more about my car being a cash hog. At that point, I was pretty sure that I was going to pay off the truck. But a lot has happened since then, so it needs another look.
The first thing that I noticed when reading these old posts was that the student loan was around 12k at that time (but probably higher), and now the balance is 11,544. This just makes me incredibly angry. I’ve sent then probably 2k, and the balance may have gone down by slightly more than half of that number. I’m still getting robbed on the interest, but the monthly payment is 150 – so it wouldn’t free up that much in terms of cash-flow. Also, if I get seriously injured horsing around and am unable to work, they cant come repossess my brain. Well, at least I dont think they can.
So, the student loan situation hasnt changed much. However, the situation with the truck has changed quite a bit. When I was initially looking at it last year, the loan balance was ~18,200, and I was putting approximately 1,000 miles on it per week. The warranty was going to expire soon, and I was spending quite a bit on fuel every month (around 500, if I remember right, and that was when gas was ~2.50/gal). Lots of money to be sure!
While I dont have the exact amount right in front of me, I do know the balance on the truck sits somewhere in the 9,000 range, or almost 1/2 of what it was just less than a year ago. I got a huge boost from a hail storm, and the loan terms are more favorable. The amount in interest I pay each month to that loan is less than to the student loan, (and always has been) even though the balances where almost always the same. It helps when you walk into a dealership around the same time everyone thinks the company is going under and the banking world is grinding to a halt – my interest rate is either 1.9% or 0.9%. Under normal circumstances, this would immediately become the priority target, and could probably be gone by the end of next year. If I get seriously injured and am unable to work, they can come repossess my truck, so the sooner I own it free and clear, the better.
Unfortunately, a new beast has entered the domain – savings. This wasn’t even an option for me because I wanted to be debt free and had my emergency fund built up to a good level. I didnt have any big expenses on the horizon, so I felt like debt was the only way to go. Now though, I’m getting married, so I’ll need money for that. I’m going on a honeymoon, so I’ll need some savings for that as well. H and I would also like to buy a house (But we have been saving for that for the past year). Unfortunately, I don’t know how much that I’ll need to save, so I’m not exactly sure what to do. A wedding budget is in the works, but I have no idea how much anything else will cost. I’m thinking of just saving the money, then if I dont end up needing it or whatever, putting a large amount on the truck.
Readers: Are you currently paying down debt and saving, or just doing 1 or the other? What loan do you think I should pay off first, or do you think I should save? Why would one be better than the other?
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