This week you can also find Brittany’s October Debt Progress Report along with some other amazing financial posts at the Financially Savvy Saturday Link Up! Click the button below to get there.
The graph below summarizes my short term debt progress across all of my individual loans. The blue column represents my debt totals for individual loans as of October 1, 2014, and the green columns represent my debt totals for individual loans as of October 31, 2014. Looking at the debt progress in this format really emphasizes how paying more than the minimum has a HUGE impact on your debt decrease. My Great Lakes Student Loan 3 is my current focal loan, and I paid as much as I could above the minimum requirement in October. Because of that, it’s total decreased by just over 9% this month, whereas in prior months it was moving down at a rate slower than 1% decrease per month. You can also see that its total is decreasing at a rate much faster than the two loans that I am making minimum payments on. What was once my largest and most mentally defeating debt actually no longer holds the title of “largest debt”. Can I get an Amen?!?!
The bar graph below represents the long term and short term progress I have made on my overall debt. The grey bar represents my original total debt amount, the blue bar is my total debt one month ago, and the green bar shows how much debt I have today. Sometimes it’s hard to feel like you are making progress when you look at your BIG number on a month-to-month basis, but looking back to the beginning can remind you how far you have come.
Having ONE target loan will increase the rate at which you can pay off your debt and decrease the amount of money you will pay towards interest to help you become debt free sooner!
Because I was paying above the minimum monthly requirement on my focal loan, the percentage being paid towards interest was small—only 7% of my total payment went towards interest. In contrast, 21% of the total amount I put towards the loans I am making minimum payments on went towards interest!! You want to pay as much as possible toward the principal because that is what helps speed up the process of eliminating debt. The chart below gives you a visual representation of these numbers.
It might seem like cash flowing money right now is rough, but if you make minimum monthly payments until all of your debt is gone, you will end up paying MUCH MORE than your original loan amounts in the long run.
Tell your Income Where to Go
The pie chart below summarizes where I delegated my earned income during the month of October. About 55% of my earned income went towards debt—that includes my minimum monthly payments and extra cash flow. Just below 32% went towards my living expenses (food, rent, etc.), and 13% of my earned income was put into long-term savings this month to prepare for holiday season travels and any surprise wedding expenses I haven’t considered in my budget. As much as including wiggle room in my budget pains me, I am continuing to do it. L Deep breaths…and I’ll be thanking myself in about three months.
October Roadblocks: October was the first month since this summer that my credit card bill wasn’t (in my own opinion) HUGE at the end of the month, and no other surprise expenses snuck up on me. I’m still saving up for my wedding/holiday buffer—which even though it feels like it’s hindering my progress on paying off debt, is not a roadblock. Saving AHEAD of time is smart, not debilitating. I’ve got a life to live here, right?!?!
October Dollar Hollaaass: No additional income on my end throughout the month of October; however I have been doing a lot of research in freelance writing and am looking to take a (baby) step in that direction come November.
For more information on how to gain control of your finances check out our info on Getting Started by clicking the link in the menu bar at the top of the page. How do you stay motivated and track your debt progress?