It has been awhile since I have posted a report card update so I want to take a minute and post my progress through September. Time to prove my successes and failures. Time to hold myself accountable to my original goals.
The good news? I am ahead of my goal! Over the past nine months I have made extra payments against my student loans totaling $20,355. This is on top of my regular payments of over $7,700. I still have to pinch myself when I realize how far I have come in such a short amount of time. My two private student loans stand at a balance of $47,624 (down from $71k); my goal by this time of the year was $51,419. My interest payment on these two loans was $487 in January! This month it was only $317. The numbers keep getting better.
Here are my actual extra payments stacked up against my goal:
Things have been going extremely well for me over the past year. In April I was promoted and received a 13% raise. A few weeks ago, in September, I received an above target bonus and another raise, this time for 7%. All told my compensation is about 19% higher now than it was when I started this journey in January. This explains why I am so far ahead of my goal despite my increased discretionary spending and my lack of an extra payment in May. However, this also means I could have done even better than what is shown here.
Still, I can’t beat myself up too much; just look at my debt fall and my net worth climb:
On the flip side of the coin my discretionary spending is till higher than what I know it could be. I have gotten back into my old ways of eating out for lunch, hitting the bars too much, and spending a lot of money on and at sporting events over the summer. I have to be honest with you, I don’t feel all that bad about it. 2013 was one of the best summers yet .
This table shows my spending in the first nine months of 2013 compared to 2012. As you can see I am still doing much better than last year.
I’m still about five grand better on my spending this year compared to last year. Even with this less spending I don’t feel like I am missing out on much or living in austerity. I’m still in the same awesome downtown apartment, I still go out with my friends whenever I feel like it, and I still do fun things like go to soccer matches and baseball games. Overall, things are great.
Don’t get me wrong, there is room for improvement. In fact September was the first month this year where my discretionary spending was higher than my spending for the same month a year ago. In the below chart that green bar (this year) should be at or lower than the blue bar (last year), but it’s not.
Clearly I am regressing to the mean. Even though my significant raise earlier this year allowed the larger than expected extra payments it also had the side effect of inflating my discretionary spending beyond the level I was at earlier this year. In fact, my monthly discretionary spending target is right around $200. That goal has never been met and I have been blowing past it every single month. It’s laughable now.
In August I tried to fight my spending back down but it just sprang back up in September. This is something I am going to work harder on as we close out 2013.
As the last three months of this year fly by I am re-evaluating where my debt stands. Based on my original goals that I laid out at the beginning of the year my target is $2,400 in extra payments over the next three months. I know I can beat this. Easily, I can make extra payments of $3,600 and I think my stretch goal will be $4,500. By December 31st my first private student loan, that stood at a balance of over $36,000 at the beginning of the year, will have a balance less than $10,000. By April or May of 2014 it will be completely paid off. Then I will shift my focus to my second, and final, private student loan.
It’s too soon to tell but I may even hit a positive net worth sometime near the end of 2014.