For the next couple months I will be writing my progress reports a little differently. I am paying minimums or a little more than minimums while I save up for my move in July. Therefore, I will be reporting on my student loan progress as well as my moving “savings” progress.
The table below summarizes my long term and short term debt progress. In the “Current Debt” column, my totals as of May 1, 2014 have been crossed out and replaced with my debt totals as of May 31, 2014.
During the month of May I paid a total of:
- $149.53 toward principle.
- $273.57 toward interest.
I currently owe:
- $17,826.31 less than my original loan amounts
- $97.49 MORE than I owed on May 1st
I can’t give a full explanation of WHY my current balance is higher than last month’s balance (partly because I don’t yet understand all of the details), but what I do know is that most loan companies make it VERY difficult for people to pay extra on their loans, thus keeping them in debt. That is likely why my additional payments seem to have been applied towards interest, and conveniently, there was not and still isn’t an online option to pay extra towards principle.
Applying extra payments towards interest enables the loan companies to make more money off your debt because you will have it for a longer period of time which also means you will accrue and pay them more interest. Therefore, they attempt to convince people that paying extra towards interest is as good as paying towards principle, and will also help you to pay less in the long run. They might even go so far to tell you that’ is the only option. If you don’t pay toward the principle, you’re actually paying interest that you may never actually accrue. Clear as mud, right? I wonder why these loan companies make this so difficulty to explain and understand….
The table below summarizes my moving fund progress. I provide information about my monthly savings goals as well as my actual amounts saved up to this point.
Roadblocks: I had a wedding in early May that I used extra spending money for and bought a flight to Florida to look for houses. Those extra expenses prevented me from meeting my savings goal in May.
May Dollar Hollaaaaas: Because we found the most amazing place in Florida, I ended up having to spend a significant amount less on a security deposit and fees from my moving fund in May, leaving me feeling more at ease with my lack to save up enough in May.
For more information on starting a personal budget, check out our Getting Started tab at the top of the page.