Single Girl Slays Debt

Paying Off Tsunami-Sized Debt as a Single Woman

The Tsunami Situation (Debt Report)

The Tsunami Situation – May 2020 Debt Report

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Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month. First you’ll see the Table of Debt Slayed. This displays debts that have been paid off since I began my debt free journey.

Further below you’ll see my active debts in the Debt Report Table.

“How long should you try? Until.”

~ Jim Rohn

A few notes on the Table of Debts Slayed: 

(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019. 

(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my Table of Debts slayed but am do so now.

(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified (which you’ll see in the table below) and not actually paid off. 

See the Debt Report Table below for the figures as of the end of May, 2020. It shows the updated order of debts to be repaid.

May, 2020 debt balances.

The difference between my March and April personal debt balance is $1,386. As I mentioned in my March Debt Report, I made some changes in light of the impact that COVID-19 has had on my business and, therefore, my income. With the downturn in my business and the uncertainty in my income, I decided to hold on to additional funds.

A few notes about the Debt Report Table:

New Debt Being Attacked – 2019 State Taxes

The debt that is highlighted in green is the debt that I’m currently attacking. For the last few months, that debt has been my 2016 IRS bill. Last month, it became this State tax bill. As I mentioned last month, though I have the money to pay this in full, I decided to go on a payment plan because, again, I feel it best to hold on to cash right now.

Estimates

An amount that ends in a “0” or “50” may be an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount. 

Three Payments That (Unfortunately) Go Up Every Month

(1) Internal Revenue Service (2017)

This payment goes up every month because the IRS system will not allow me to make payments on both the 2016 balance and the 2017 balance at the same time. I wanted to make small payments on the 2017 balance so that it wouldn’t go up every month. When I spoke with the IRS, they explained that they don’t allow for that. It requires that all payments be applied to the oldest balance due. That is why the 2016 balance goes down, while the 2017 balance goes up by about $64 per month.

(2 & 3) Navient Student Loans (Yes, Both!)

The balances for both Navient loans usually go up every month because I’m on an income-based repayment plan. Since the U.S. Government has given us a break on student loan interest and student loan payments (which began in mid-March), the balances didn’t go up. And since I didn’t make any payments, they didn’t go down, either.

Business Debt

May, 2020 business debt balances.

I’ve included the business credit card balance, even though I don’t pay that bill out of my personal income. Though the money that pays it comes from the business, I am the personal guarantor of it. So, technically, it’s my debt.

The difference between my April and May business debt balance is $583. This is about the amount by which I reduced this debt last month.

COVID and It’s Uncertainty

May was a month of little, but still some, progress. With the impact of the COVID pandemic still being as unprecedented as it has been, I think that my decision to hold on to cash was a good one. I know that things will change in the upcoming months. It’s just that none of us can be sure what those changes will be. I’d rather have some cash on hand instead of putting everything on debt right now. I can always make lump sum payments on my debt later.

The Tsunami Situation – April 2020 Debt Report

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Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month. First you’ll see the Table of Debt Slayed. This displays debts that have been paid off since I began my debt free journey.

Further below you’ll see my active debts in the Debt Report Table.

“How long should you try? Until.”

~ Jim Rohn

A few notes on the Table of Debts Slayed: 

(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019. 

(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my Table of Debts slayed but am do so now.

(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified (which you’ll see in the table below) and not actually paid off. 

See the Debt Report Table below for the figures as of the end of April, 2020. It shows the updated order of debts to be repaid.

April, 2020 debt balances.

The difference between my March and April personal debt balance is an increase of $169. The increase is due to a new debt I have (see below). As I mentioned in my March Debt Report, I made some changes in light of the impact that COVID-19 has had on my business and, therefore, my income. With the downturn in my business and the uncertainty in my income, I decided to hold on to additional funds. That many of my creditors – Navient, Credit Union, 1st Mortgage and LendingClub – agreed to postpone or forebear payments made it possible for me to not stress too heavily about my significantly reduced income. Under normal circumstances, I would have paid all of my monthly payments and made an additional debt snowball payment that would have resulted in, at least, some kind of additional decrease of my debt. That did not happen this month.

A few notes about the Debt Report Table:

New Debt Being Attacked – 2019 State Taxes

The debt that is highlighted in green is the debt that I’m currently attacking. For the last few months, that debt has been my 2016 IRS bill. This month, it became a tax debt I now owe to the State for my 2019 taxes due.

I have the money to pay the bill in full. I decided to go on a payment plan because, again, I feel it best to hold on to cash right now. There’s a lot of uncertainty involved with this pandemic. I feel more comfortable having access to money.

Estimates

An amount that ends in a “0” or “50” may be an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount. 

Three Payments That (Unfortunately) Go Up Every Month

(1) Internal Revenue Service (2017)

This payment goes up every month because the IRS system will not allow me to make payments on both the 2016 balance and the 2017 balance at the same time. I wanted to make small payments on the 2017 balance so that it wouldn’t go up every month. When I spoke with the IRS, they explained that they don’t allow for that. It requires that all payments be applied to the oldest balance due. That is why the 2016 balance goes down, while the 2017 balance goes up by about $64 per month.

(2 & 3) Navient Student Loans (Yes, Both!)

The balances for both Navient loans usually go up every month because I’m on an income-based repayment plan. Since the U.S. Government has given us a break on student loan interest and student loan payments (which began in mid-March), the balances didn’t go up. And since I didn’t make any payments, they didn’t go down, either.

Business Debt

April, 2020 business debt balances.

I’ve included the business credit card balance, even though I don’t pay that bill out of my personal income. Though the money that pays it comes from the business, I am the personal guarantor of it. So, technically, it’s my debt.

The difference between my March and April business debt balance is $560.

Up until a couple of months ago, I had a business credit card that had an APR of 22.74%. In January, I thought that I had succeeded in obtaining 2 low interest business credit cards so that I could transfer the balance from my high interest business card (see Money Move – A Balance Transfer). What I did, instead, was get 1 card that would allow for a 0% interest balance transfer and another card that was 0% interest, but not on balance transfers.

What I decided to do was get a separate business loan with a low interest rate (well, lower than the 22.74% of the other card). I wrote about that here. Now, I’ve got one credit card and one business loan.

COVID, COVID, COVID

Last month, I wrote about needing to take the month of April to think for a second. I wanted to see how my income looked and also wanted to focus on getting used to living under lock-down. While I’ve now adjusted fairly well to lock-down, the money situation is still shaky.

The Tsunami Situation – March 2020 Debt Report

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Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month. First you’ll see the Table of Debt Slayed. This displays debts that have been paid off since I began my debt free journey.

Further below you’ll see my active debts in the Debt Report Table.

“How long should you try? Until.”

~ Jim Rohn

A few notes on the Table of Debts Slayed: 

(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019. 

(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my Table of Debts slayed but am do so now.

(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified (which you’ll see in the table below) and not actually paid off. 

See the Debt Report Table below for the figures as of the end of March, 2020. It shows the updated order of debts to be repaid.

March, 2020 debt balances.

The difference between my February and March personal debt balance is $1,504. Typically, the month-to-month difference has been at least $2,000. This month, that wasn’t the case because of the COVID-19 pandemic. With the downturn in my business and the uncertainty in my income, I decided to hold on to additional funds. Under normal circumstances, I would have made an additional debt snowball payment that would increased my paydown amount by several hundred dollars.

A few notes about the Debt Report Table:

The Debt Being Attacked

The debt that is highlighted in green is the debt that I’m currently attacking. Additional funds I have available for debt repayment go toward extra payments on this highlighted debt. The additional amounts appear as my “Debt Snowball” number in my budget every month.

Estimates

An amount that ends in a “0” or “50” may be an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount. 

Three Payments That (Unfortunately) Go Up Every Month

(1) Internal Revenue Service (2017)

This payment goes up every month because the IRS system will not allow me to make payments on both the 2016 balance and the 2017 balance at the same time. I wanted to make small payments on the 2017 balance so that it wouldn’t go up every month. When I spoke with the IRS, they explained that they don’t allow for that. It requires that all payments be applied to the oldest balance due. That is why the 2016 balance goes down, while the 2017 balance goes up by about $64 per month.

(2 & 3) Navient Student Loans (Yes, Both!)

The balances for both Navient loans go up every month because I’m on an income-based repayment plan. The minimum payments under the program aren’t enough to reduce the monthly balance. Once I take down the two IRS debts, I’ll start making payments on the student loans big enough to, at least, cover the interest.

Business Debt

March, 2020 business debt balances.

I’ve included the business credit card balance, even though I don’t pay that bill out of my personal income. Though the money that pays it comes from the business, I am the personal guarantor of it. So, technically, it’s my debt.

The difference between my February and March business debt balance is $500.

Up until recently, I had a business credit card that had an APR of 22.74%. In January, I thought that I had succeeded in obtaining 2 low interest business credit cards so that I could transfer the balance from my high interest business card (see Money Move – A Balance Transfer). What I did, instead, was get 1 card that would allow for a 0% interest balance transfer and another card that was 0% interest, but not on balance transfers.

What I decided to do was get a separate business loan with a low interest rate (well, lower than the 22.74% of the other card). I wrote about that here. Now, I’ve got one credit card and one business loan.

COVID-19 Brings Uncertainty

The COVID-19 pandemic has shaken things up in unimaginable ways. Right now, staying healthy and sane are my primary concerns. I’ve utilized the grace offered by some of my creditors, relieving me of having to make payments in the upcoming months. I did that as a precautionary measure, while I evaluate my income. I need a second to think. I don’t expect my debt balance to go down significantly next month.

The Tsunami Situation – February 2020 Debt Report

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Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month. First you’ll see the Table of Debt Slayed. This displays debts that have been paid off since I began my debt free journey.

Further below you’ll see my active debts in the Debt Report Table.

“How long should you try? Until.”

~ Jim Rohn

A few notes on the Table of Debts Slayed: 

(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019. 

(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my Table of Debts slayed but am do so now.

(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified (which you’ll see in the table below) and not actually paid off. 

See the Debt Report Table below for the figures as of the end of February, 2020. It shows the updated order of debts to be repaid.

The difference between my January and February personal debt balance is $2,166.

A few notes about the Debt Report Table:

The Debt Being Attacked

The debt that is highlighted in green is the debt that I’m currently attacking. Additional funds I have available for debt repayment go toward extra payments on this highlighted debt. The additional amounts appear as my “Debt Snowball” number in my budget every month.

Estimates

An amount that ends in a “0” or “50” may be an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount. 

Three Payments That (Unfortunately) Go Up Every Month

(1) Internal Revenue Service (2017)

This payment goes up every month because the IRS system will not allow me to make payments on both the 2016 balance and the 2017 balance at the same time. I wanted to make small payments on the 2017 balance so that it wouldn’t go up every month. When I spoke with the IRS, they explained that they don’t allow for that. It requires that all payments be applied to the oldest balance due. That is why the 2016 balance goes down, while the 2017 balance goes up by about $64 per month.

(2 & 3) Navient Student Loans (Yes, Both!)

The balances for both Navient loans go up every month because I’m on an income-based repayment plan. The minimum payments under the program aren’t enough to reduce the monthly balance. Once I take down the two IRS debts, I’ll start making payments on the student loans big enough to, at least, cover the interest.

Business Debt

I’ve included the business credit card balance, even though I don’t pay that bill out of my personal income. Though the money that pays it comes from the business, I am the personal guarantor of it. So, technically, it’s my debt.

The difference between my January and February business debt balance is $621. I made a $1,500 payment toward the business credit card balance in February (which is why the AmEx card shows a a $8,800 balance), but the total balance across the loan and the card didn’t go down as much as I would have liked because of the fees associated with getting the balance transfer done and the new business loan. This I view as a short-term set back because of all of the money that I will be saving in the upcoming months by having the significantly lower interest rates.

Up until recently, I had a business credit card that had an APR of 22.74%. In January, I thought that I had succeeded in obtaining 2 low interest business credit cards so that I could transfer the balance from my high interest business card (see Money Move – A Balance Transfer). What I did, instead, was get 1 card that would allow for a 0% interest balance transfer and another card that was 0% interest, but not on balance transfers.

What I decided to do was get a separate business loan with a low interest rate (well, lower than the 22.74% of the other card). I wrote about that here. Now, I’ve got one credit card and one business loan.

Bigger Numbers Next Month

Yesterday, I paid the second installment of the $8,680 HOA Assessment I needed to pay for repair work that our building requires. I have been saving between $1,000 and $1,500 per month toward the payment of this assessment. With that being paid in full now, I can direct those funds to my debt snowball. That will make for a much larger snowball than I’ve had over the last several months. Next month’s debt reduction amount should be much higher. So excited about that!

How did your debt payoff go for the month of February?

The Tsunami Situation – January 2020 Debt Report

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Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month. First you’ll see the Table of Debt Slayed. This displays debts that have been paid off since I began my debt free journey.

Further below you’ll see my active debts in the Debt Report Table.

“How long should you try? Until.”

~ Jim Rohn

A few notes on the Table of Debts Slayed: 

(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019. 

(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my Table of Debts slayed but am do so now.

 
(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified (which you’ll see in the table below) and not actually paid off. 

See the Debt Report Table below for the figures as of the end of January, 2020. It shows the updated order of debts to be repaid.

The difference between my December and January personal debt balance is $4,210.

The difference between my December and January business credit card debt balance is $574.

A few notes about the Debt Report Table:

The Debt Being Attacked

The debt that is highlighted in green is the debt that I’m currently attacking. Additional funds I have available for debt repayment go toward extra payments on this highlighted debt. The additional appear as my “Debt Snowball” number in my budget every month.

Estimates

Sometimes, an amount that ends in a “0” or “50” is an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount. 

Three Payments That (Unfortunately) Go Up Every Month

(1) Internal Revenue Service (2017)

This payment goes up every month because the IRS system will not allow me to make payments on both the 2016 balance and the 2017 balance at the same time. I wanted to make small payments on the 2017 balance so that it wouldn’t go up every month. When I spoke with the IRS, they explained that they don’t allow for that. It requires that all payments be applied to the oldest balance due. That is why the 2016 balance goes down, while the 2017 balance goes up by about $64 per month.

(2 & 3) Navient Student Loans (Yes, Both!)

The balances for both Navient loans go up every month because I’m on an income-based repayment plan. The minimum payments under the program aren’t enough to reduce the monthly balance. Once I take down the two IRS debts, I’ll start making payments on the student loans big enough to, at least, cover the interest.

Business Credit Card

I’ve included the business credit card balance, even though I don’t pay that bill out of my personal income. Though the money that pays it comes from the business, I am the personal guarantor of it. So, technically, it’s my debt. Despite the fact that I make a $1,000 payment on it every month, you see that the balance only goes down by just under $400. The APR on it is 22.74%.

In January, I did what out I set to do, which was find a low interest business loan or credit card so that I could transfer the balance (see Money Move – A Balance Transfer). It’s actually 2 cards because I couldn’t get a credit line on one to cover the full balance. Because of the balance transfer process for each of the credit cards, the balance transfers won’t be completed until next month.

Why Am I Not Discouraged?

I asked myself this question as I was putting together this post. Why am I not discouraged by the fact that the balances of some of my obligations – the 2017 taxes and the student loans – continue to go up every month? After all, the aim here is to consistently reduce my debt. Ideally, every single one of my balances should be going down, not up.

The reason I’m not discouraged is because, despite the fact that some balances are still increasing, others are coming down. And, most importantly, I’m developing and practicing the habits that are going to position me to get out of this Tsunami Situation in which I find myself.

I’m budgeting. I’m reconciling my expenses in connection with said budget.

I’m changing my mindset and paying attention to the money I have and where it is going. Remember, during the period between January, 2019 and June, 2019, I paid almost $1,000 in overdraft fees! I was out of control and not managing my money properly at all. It was ridiculous!

What a difference a year makes. Now, in January of 2020, I feel much more in control. I’m operating intentionally. I’m planning strategically. I’m developing consistency. I’m taking baby steps – literally. I’ve still got a long way to go, but I feel like I’m laying a solid foundation. If I just stay committed to moving forward, the results will come. The results WILL come. That’s what keeps me encouraged.

How are you feeling about your debt free journey? We’re a month into 2020 and . . . how did things go the first month? If you’re feeling discouraged, my hope is that you’ll give yourself credit for all that you have accomplished and the progress that you’ve made thus far.  We have to remember that it’s a process and that it takes time and consistency to get to the other side of this. The thing that matters most is that we will get to the other side.

The Tsunami Situation – December 2019 Debt Report

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Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month. First you’ll see the Table of Debt Slayed. Further below you’ll see my active debts in the Debt Report Table.

“How long should you try? Until.”

~ Jim Rohn

A few notes on the Table of Debts Slayed: 

(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019. 


(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my but am do so now. 

(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified (which you’ll see in the table below) and not actually paid off. 

See the Debt Report Table below for the figures as of the end of December, 2019. It shows the updated order of debts to be repaid.

The difference between my November and December personal debt balance is $1,620.

The difference between my November and December business credit card debt balance is $390.

A few notes about the Debt Report Table:

The Debt Being Attacked

The debt that is highlighted in green is the debt that I’m currently attacking. All additional funds I have available for debt repayment go toward extra payments on this highlighted debt.

Estimates

Any amount that ends in a “0” or “50” is an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount. 

Two Payments That (Unfortunately) Go Up Every Month

(1) Internal Revenue Service (2017)

This payment goes up every month because the IRS system will not allow to make payments on both the 2016 balance and the 2017 balance at the same time. It requires that all payments be applied to the oldest balance due. I wanted to make small payments on the 2017 balance so that it wouldn’t go up every month. When I spoke with the IRS, they explained that they don’t allow for that. That is why the 2016 balance goes down, while the 2017 balance goes up by about $64 per month.

(2) Navient Student Loans (Yes, Both!)

The Navient payments for both the Debt Journey Balance and the November balance go up every month because I’m on an income-based repayment plan. The minimum payments under the program aren’t enough to reduce the monthly balance. Once I take down the two IRS debts, I’ll start making payments on the student loan big enough to, at least, cover the interest.

Business Credit Card

I’ve included the business credit card balance, even though I don’t pay that bill out of my personal income. Though the money that pays it comes from the business, I am the personal guarantor of it. So, technically, it’s my debt. Despite the fact that I make a $1,000 payment on it every month, you see that the balance only goes down by just under $400. The APR on it is 22.74%. This month, I plan to do with it what I did with my credit cards and find a low interest business loan or credit card so that I can transfer the balance. I’d like my $1,000 payments to go much further than they are.

In December, the first payment on the Lending Club loan was due. I made additional payments on the loan in November, before the initial payment was due, to honor debt snowball amounts that were allocated for credit card payments for November. In other words, I had additional funds that were supposed to be paid on my debt snowball toward credit cards (because a credit card was the lowest balance and, therefore, was the debt that was supposed to receive the debt snowball extra payment). I didn’t want those funds to get lost in the transition to the consolidated loan. I also made sure to make a payment sufficient to cover the origination fee (the fee was $260).

The Tsunami Situation – November 2019 Debt Report

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Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month.

“How long should you try? Until.”

~ Jim Rohn

The Debt Report Table I have been using in previous months was starting to look a bit cluttered, so I’m changing the format of it. In it, I’m also changing the order of the debts so that the order of it aligns with my planned order of payoff. 

Moving forward, the Debt Report Table will show only the active debts being repaid. The Table of Debts Slayed will reflect those items that have already been repaid. You’ll find the Table of Debts Slayed below.

A few notes on the Table of Debts Slayed: 

(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019. 


(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my but am do so now. 

(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified and not actually paid off. 

See the Debt Report Table below for the figures as of the end of November, 2019. It shows the updated order of debts to be repaid.

Based on the figures above, the difference between my October and November debt total is $1,667.25. 

A few notes about the Debt Report Table:

(1) Any amount that ends in a “0” or “50” is an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount. 

(2) The Navient payments for both the Debt Journey Balance and the November balance are the same because I’m on an income-based repayment plan and my payments aren’t enough to reduce the balance. 

(3) The first payment on the Lending Club loan isn’t due until December. I made additional payments on the loan due to debt snowball amounts that were allocated for credit card payments for November. I also made sure to make a payment sufficient to cover the origination fee (the fee was $260). 

I’m excited about the debt consolidation loan because I know that, as long as nothing unexpected happens to derail me, I will get it all paid off within 3 years or less. Of course, I want to pay it off much earlier than that, but I love knowing that there’s a definitive end date.

The Tsunami Situation – Student Loan Edition

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Photo by Nicole Wolf on Unsplash
Audio version of this post, read by the author.

Writing this post has been sad for me. 

This is the first time in over 15 years that I’ve actually looked at and studied my original student loan documents. In doing so, I’ve had to face the reality of how stupid I’ve been. Really stupid. It’s one thing to see your current six figure balance. It’s a whole other thing to see that it started off as five. 

I still have a hard copy of the letter that Sallie Mae sent to me 18 years ago, 2 months before my law school graduation. It gave me advance notice that I was scheduled to begin repaying my loans 6 months after my upcoming graduation. As of the day that I graduated from law school, my total loans for undergrad were $25,410. Ten months after that letter, the balance was up to $28,825.40 because two of my loans were unsubsidized. This was the total before my law school loans were tacked on to the balance. 

Today, the total outstanding balance on my student loans is $152,011.  This consists of two loans at 5.875%. One loan is subsidized, with a balance of $64,931. The other is unsubsidized, with a balance of $87,080. 


Here’s the vomit-inducing part: the original loan total amount was $93,054.

A Word on Unsubsidized vs. Subsidized Student Loans

An unsubsidized loan is one on which the interest begins to accrue once the loan funds are disbursed. This accrual continues regardless of whether the borrower is still enrolled in school or is in an allowed grace or deferral period. With a subsidized loan, alternatively, the accrued interest is paid by the government or the bank while the student is enrolled on at least a half-time basis in school or are within a grace or deferment period. The fundamental difference between the two types of loans is who is paying the interest once the loan has been given to the student.

Why would anyone ever take out an unsubsidized loan? SallieMae.com provides an enlightening explanation:

Simply put, subsidized loan offers are based solely on need, when you apply for aid through the Free Application for Federal Student Aid (FAFSA) and they are only available to undergraduate students. Generally, you’ll find out how much you’re allowed to borrow on a subsidized loan, for a particular school, via your school’s financial aid offer. Colleges set those amounts individually. If you’re eligible for a subsidized loan, it will be part of your offer.  On the “un” side, you do not have to demonstrate need for an unsubsidized loan, so you can borrow more money, and use the funds to pay for a graduate degree, for example.


So What Happened?

When I attended my undergraduate institution, the amount of tuition was approximately $24,000 per year. The law school I attended charged tuition of around $19,000 per year. 

I don’t remember the total cost of my education (i.e., tuition, room and board). Through some online research, I was able to find tuition amounts mentioned above, but I do not recall (and haven’t found) information regarding the room and board costs. Based on the numbers that I found, the cost of my undergraduate education tuition totaled $96,000 and my law school tuition totaled $57,000. Again, this doesn’t even address the room and board piece. 

I was diligent about getting scholarships for my first year of undergrad. Because my parents were divorced by that time and the FAFSA relied on my mother’s income at the time I applied to college, I was also able to get some financial aid. Some of my financial aid package included work-study. 

I was a cheerleader in high school and decided to continue my cheerleading participation during my first semester of undegrad. I learned quickly, however, that I needed to have some money and cheerleading, as an extracurricular activity, didn’t pay. My parents weren’t sending me money in any substantial amount or on a consistent basis, so I set my sights on gainful employment. 

To be fair, I may have been too independent for my own good. My father gave me an American Express card while I was in high school to have for emergencies. While in college, I very rarely used it. He didn’t encourage me to use it, but I also didn’t ask. My parents weren’t paying any tuition. In my mind, I was the one who was responsible for my education. Since I could work, I thought I should do my best to be self-sufficient and earn money to buy things like toiletries and to have pocket money. I’ve always been that way. Working for me meant doing a full 40 hours (between my paying job and an internship) per week. My younger brother and sister also received an American Express card to use while in college. From what I hear, my brother was way more diligent in using it. He also received a monthly allowance from my father while there. My sister was, apparently, the queen Amex user of us all. 

For an Ivy League undergraduate education that retailed at over $100,000 (if I were to include room and board), coming out with $25,000 in loans wasn’t that bad. My law degree was a different story. Not only was I an out-of-state student, therefore, paying out-of-state tuition, but I also didn’t get any financial aid. So, I attended law school at full retail price, along with an out-of-state premium.

Scholarships are relatively rare in law school. Many professional graduate-level programs do not offer financial assistance – at least, not on the level at which such assistance is usually offered to undergraduates. If one is fortunate enough to get a scholarship, those scholarships generally cover only tuition at the graduate school level, leaving books, room and board, and all other expenses up to the student. 

Short-Term Thinking

It is ridiculous that I graduated from school 18 years ago and owe more money on student loans now than I did back then. In fact, I now owe more on my student loans than I do on my home. How does that happen? The simple answer: short-term thinking. 

Immediately after I graduated from college, I went to law school. Since I was enrolled full-time in law school over the next three years, repayment of my undergraduate loans was deferred until after I graduated from law school.  

And defer was what I did. Since then, and up until recently, I’ve always wanted to pay as little as possible on the loans. That, obviously, has huge long-term consequences. I took advantage of every minute of forbearance that was available to me. Then, when forbearance was no longer an option, I utilized whatever other program would make it possible for me to make a lower payment. There were so many possibilities – the graduated repayment, the extended repayment, the income-sensitive repayment. It was so easy to put the loans in forbearance, or to request some form of hardship deferral that allowed me to pay a reduced or non-existent payment. My lenders made that very easy. With the way that these major student loan lenders operate, you almost have to be egregiously irresponsible to ever land in default. Reducing or not making payments is as easy as making a phone call or filling out a form. 

They were also extremely easy to get, unlike other forms of debt. When I was in undergrad, if I was short on money, do you know what I did? I went to the financial aid office and got more. It was as easy as that. All I had to do was sign a piece a paper. Then, suddenly, I had more money on my student card to use for food or other on-campus expenses. I see now that what I must have been doing was, unknowingly, getting a bunch of unsubsidized loans.  

I think I always viewed the loans as “not that bad” of a debt because, after all, I got a great education out of them. I have an education of which some people dream. I never felt any shame or stigma attached to having student loans. Whenever I’d mention them, people would usually say something along the lines of, “Tell me about it. I totally understand.” When people learned of the schools that I attended, the student loans seemed justified. 

I hadn’t been serious about paying these student loans for any extended period of time. I treated them as an obligation that could continuously be deferred. I don’t think I ever consistently made full, sensible payments (i.e., ones that actually reduced the balance) for more than 5 months or so in a row – in almost 2 decades! 
The crazy part is that as I write and think back to what I was doing and thinking over the last 18 years, I’m not quite sure about why I didn’t treat my student loans like a real bill – like other bills that cannot be repeatedly deferred and that have to be paid. Were there times over the years at which I was seriously financially strapped and struggling? Absolutely. But for those bills that I knew I had to pay, I found a way to pay them. I never, ever viewed my student loans as one of those critical bills.

The reason I didn’t treat my student loans like other bills is because . . . I could.

~ Single Girl

The only reason I can think of is . . . because I could.

Where Were My Parents When All This Was Happening?

Where were my parents when I was making thoughtless student loan decisions? I’m not sure. I think that my parents just weren’t paying attention. I spoke with them regularly, but they weren’t intimately involved in the financial affairs related to my schooling. My mom made sure to complete the FAFSA every year, but that was about the extent of my parental involvement. We joke about how they, basically, dropped me off at school and didn’t come back until 4 years later to pick me up at graduation. It’s true. They never visited. (And my parents and I are cool – super cool – and haven’t had relational issues.) I met with my father once for lunch during my first or second year when he had a layover on an international flight. That was it. 

They were living their lives, working on building their businesses. My father was fostering a new relationship with my sister’s mom. My mother moved from my home town and was focused on getting acclimated to her new city. She was also concentrating on my little brother, who had significant health challenges to overcome, and also had to adjust to his new environment. 

Plus, they were immigrants who didn’t know much about the post-secondary education system in the United States. My mother attended college here, but at the time, her father was still alive and could cash flow the cost of her education. He’d send her tuition funds from overseas and, from what I understand, she didn’t worry much about money while in school. In his formal education, my father only got as far as a couple of community college courses. 

The one thing I know is that they never said that the loans were a bad idea or discouraged me from getting them.  First of all, you’re going to go to school, kiddo. That’s non-negotiable. Second of all, you don’t not go to a great undergraduate school if you are offered admission. Third, you don’t not go to a top 10 law school if they’ve agreed to let you in. I think we all thought that this was just how it  was done. If you don’t have the money to pay for school, you borrow it. Period. How else was this fancy education going to be paid for?

What’s Done Is Done, But It’s Bad

As I sit here now, in the process of cleaning up my mess and facing all of the nasty, nasty facts, I’m pissed with myself for not being more diligent in my handling of these loans. I should never, never, never have treated them like they were some kind of “acceptable” debt. What was once a $93,000 problem has now become a $150,000 problem. That’s ridiculous! And embarrassing. And sad.