If you have been following this series for any amount of time, you know that we are headed toward real-time updates on my debt free journey. I present to you the first update.
Previously I mentioned that I could have been debt free prior to COVID. Since the pandemic began I have made changes to ensure I am never in this position again. I have been blessed with zero interest accrual on student loans, the knowledge and hope to becoming debt free by Spring 2021, and I have been blessed because my being in the military has guaranteed a paycheck even during a pandemic. It is inconceivable that God still thinks of me, a single soul out of all creation, and blesses me through varying circumstances. His way is perfect.
Today my only outstanding debt is student loans totaling $21,392.36. That’s equivalent to a car or a down payment on a small house! Without rehashing everything from previous posts, this debt amount is strictly my negligence and lack of seriousness towards debt repayment. A number like that is daunting and raises questions. The biggest question is how in the world am I going to be debt free by Spring 2021?
Simply stated, I have been blessed. Now the more rational response: commitment, intentionality, budget, and behavior.
COMMITMENT: It is currently easier to spend less of the money coming in since many luxuries have been closed for several months. Stephen Covey says to “begin with the end in mind”. I have done the math many times over and know that the end of this debt free journey could be as soon as March 2021. Being committed to being debt free by Spring 2021 is hard to fathom, but knowing I can be forever free of student loans by that time makes committing to that goal easier.
INTENTIONALITY: Every action and expense is strictly analyzed to justify its necessity. Unnecessary? Not happening. This plays into the next point because if actions require money then it must be budgeted. I am committed to debt-freedom which requires intentional analysis of all actions. In this case, I have said “no” to events not budgeted or have compromised and been present without spending money. I am intentionally not planning trips (including the holidays) until after Spring 2021.
BUDGET: Thanks to the EveryDollar budgeting tool I am able to give each dollar a place to be every month. This month I had a car situation come up that was unexpected. Naturally I wanted to go to my emergency fund (that’s what it’s for), but with the EveryDollar app I was able to readjust my budget in a way that allowed me to cash flow the entire repair. Seeing where every dollar is at allowed for this to happen. Since COVID began, I started budgeting large sums to the debt. I started at about $1,500 but in July and August I have budgeted and paid down $2,700/month on the student loan debt. In October I am expecting to increase that payment to about $3,000/month until the balance is zero.
BEHAVIOR: Literally the only reason I have been able to increase my student loan repayment amount is because of my behavior. I know what I need to do, but knowledge becomes useless if I don’t use it. My behavior is guided by my commitment to becoming debt free and I have chosen to continue on this path until debt freedom is realized. Anyone can talk about being debt free and how to do it, but everything is for naught if behavior does not reflect intentions. I have chosen to limit my spending. I have chosen to suspend retirement contributions for 12 months. I have chosen to get a part-time job. I have chosen to eat like a broke college student. I have chosen not to take additional trips not budgeted prior to COVID. I have chosen to budget for fun stuff, but I have committed to using all leftover fun budget money to pay down the debt. Behavior is the most intense part of the debt free journey. I firmly believe that living a completely different lifestyle short term will bring life-changing, long-term results.
For those following along, I present to you a small spreadsheet outlining the anticipated repayment plan:
I do anticipate monthly leftover line items so that the $692.36 can be paid in increments during the preceding months.
That’s the update! It was not what I originally had in mind, but with it being the first update I hope that it provided some groundwork and vision for where I am headed. My commitment to debt-freedom has intensified in such a way that I’ve been very intentional with my budget and behavior. I cannot say I’ve reached this point alone. God has played a huge role in my circumstances, guidance, and blessings. The Lord will be glorified throughout and at the end of this journey.
Each month I plan to give an update on my progress to becoming debt free. Remember, these are my personal experiences and I do not claim to be a financial professional. I do, however, desire that anyone out there in similar situations can find hope that being debt free is possible. Keep it up. You can do it.
Be strong. Love God. Love others.