I'm so giddy and excited that I can barely sit down long enough to type this out. I've been wanting to get to this point so badly that I've even dreamt about it! Ok, deep breaths....
As you can probably guess, I just paid off Sallie Mae! Woo! Yes! That also means...
I AM DEBT FREE!
I want to thank mom and dad for making this possible.
Because, if they didn't allow me to live rent-free right now, I would not have been able to pull this off so quickly. I also want to thank YOU GUYS for helping me make this possible. Especially the ah, cooking part. I mean, seriously, what? Me cooking? Hahaha, no way. At least that's what I would've said several months ago. Again, I plea "no contest" to those who suggest that my money would've been better served elsewhere. Regardless, I'm just all too happy to finally get rid of the wretched past that the loan represented. Doing that also freed up a substantial part of my monthly budget, half of which is already redirected into 401(k).
The other half will currently be used to re-establish my baby emergency fund. Originally, I wasn't going to dump that into my student loan, but given recent events, I changed my mind. But don't worry. While money is going to be tight for the next several weeks, I should be quite alright. Otherwise, I wouldn't have done it.
And what victory financial blog entry would be complete without some numbers to crunch eh?
As you can see from the screen capture, my original student loan amount is $38,327.31. The interest rate is 5.275%, it's a 20 year term, and my minimum payment is $251.46. According to this calculator, if I paid only the minimum monthly payment, I would have paid a total of $23,785.51 in interest for the life of the loan! Even after factoring tax deductions at 15%, it still would have been $20,217.68 in interest!
I started paying the student loan in January 2006, and haha, finished paying in a nice round number of 2 years. How much did the 2 years of interest add up to? Now I am not saying I am perfect in most things or even in some things, but I am proud to say that I've kept meticulous record of my student loan. Every payment and every interest accrued between those two years-- all 196 entries total-- are written down and calculated. Based on that information, I've paid a total of $2802.53 in interest. After tax deduction, the grand total is $2382.15. That's nothing to sneeze at, but compared to paying only the minimum, I've saved myself $17,835.53 in interest as well as 18 years of my life with that debt hanging over my head!
While this chapter of my financial life may be over, the party is just getting started! In fact, I am already behind schedule! I still have a challenge/Roth IRA to open, but I can't even do that until I re-establish my emergency fund. I wonder if I'll even make it for this year?
Still, I'm giddy as a little school girl. No, wait, that didn't sound right. But I was definitely giddy enough to dance and air guitar in the shower. That didn't sound right either. Ignore those disturbing visuals! But yes, I'm definitely giddy!
UPDATE:
Oh oh! I can't believe I nearly forgot this tidbit! I want to make a special and personal thanks to ImaSaver, who at the beginning of this journey, offered to help me with a uh... shortcut.
However, I politely declined because I felt that this was my mess and I alone should clean it up. More importantly, and though she may not agree, I felt that I would be taking advantage of her, and I didn't want to do that.
But I haven't forgotten that gesture of generosity. So thank you very much, Ima! You're a sweetie.
And thank you all again for your help in this!
January 24th, 2008 at 03:15 pm
Great job!
Now you should really see your savings grow!
January 24th, 2008 at 03:19 pm
January 24th, 2008 at 03:20 pm
January 24th, 2008 at 03:21 pm
So, BA, just when are you gonna get one of those nice "net worth" charts so that I, um, we, can see just how much you're worth as time goes by? HA, hahahahaha.
January 24th, 2008 at 03:22 pm
I can't wait to get rid of my student loans, and I only owe $3000 right now. Of course, it's going to go up this fall if I find the way to go back to school, but owing $3000 is killing me right now.
I don't know how people only pay the min. My mom has been paying off her studen loan since my sister was born, TEN years ago. It would drive me batty.
January 24th, 2008 at 03:25 pm
January 24th, 2008 at 03:26 pm
January 24th, 2008 at 03:29 pm
January 24th, 2008 at 03:33 pm
January 24th, 2008 at 03:33 pm
katwoman:
Actually, I do have a networth IQ account that I also keep up with on a monthly basis. It's private right now though, in part because I'm kind of embarrassed about my net worth.
compulsive debtor:
Actually... I'm so excited that I don't feel like cooking tonight.
Even though I'm walking on air, I also realize that "debt-freeness" is fleeting and won't last forever. But then, that isn't always a bad thing either. Also, by tomorrow, I need to get back into the "grind", because I know I am still nowhere near true financial freedom.
However, this is still an important milestone for me. It reminds me that all the sacrifices that I've made is not in vain, and that I am one step closer towards my goal of financial freedom.
January 24th, 2008 at 03:44 pm
January 24th, 2008 at 04:00 pm
January 24th, 2008 at 05:01 pm
January 24th, 2008 at 05:21 pm
January 24th, 2008 at 06:15 pm
Regards,
January 24th, 2008 at 06:32 pm
January 24th, 2008 at 07:00 pm
******sprinkles confetti in your hair!*******
That is such exciting news and I know you are very proud of getting that pesky ol'Sallie washed out of your hair!!! GOOD GOOD GOOD on you!!! Tickled pink for you!!
Dundunnntdunttaaaaaaa dunduntdaaaaaaaaa Da da da weehee wwwwwooooohhhhhooooooo - Just be careful that you don't incite an emergency room visit from all those mid-air heel-clicks!!
January 24th, 2008 at 08:04 pm
January 24th, 2008 at 08:07 pm
January 24th, 2008 at 08:12 pm
January 24th, 2008 at 09:05 pm
January 24th, 2008 at 09:08 pm
In a couple of years, you'll have money coming out of the wazoo!
January 25th, 2008 at 03:14 am
January 25th, 2008 at 04:33 am
You know, little things, like eating? transportation?
January 25th, 2008 at 05:13 am
lux: Oh, I was only referring to the amount that was originally budgeted towards student loans.
January 25th, 2008 at 05:22 am
January 25th, 2008 at 05:22 am
January 25th, 2008 at 06:57 am
I hoped I Wasn't being too presumptuious saying you probably would (or should) pay it off in January. Hehe. I guess I wasn't.
I think you should treat yourself a bit though. You have accomplished so much these last 2 years. Yay!!!!
January 25th, 2008 at 09:52 am
January 25th, 2008 at 05:00 pm
January 26th, 2008 at 09:04 am
January 26th, 2008 at 07:21 pm
January 26th, 2008 at 07:25 pm
January 27th, 2008 at 11:59 am
::does the happy dance::
January 27th, 2008 at 03:29 pm
January 27th, 2008 at 03:39 pm
January 27th, 2008 at 06:28 pm
January 28th, 2008 at 09:32 am
January 28th, 2008 at 11:09 am
You also seem to have your head on straight as to what to do with the money now that you aren't sending it to Sallie Mae.
January 28th, 2008 at 03:16 pm
January 29th, 2008 at 09:40 am
January 30th, 2008 at 07:01 am
January 30th, 2008 at 09:36 pm
January 31st, 2008 at 07:48 pm
April 2nd, 2008 at 01:25 am