About That Student Loan . . .

Apr 20, 2014 by

          Because I moved back into my parents’ house in March, I’m in need of a new financial plan. After all, increased financial opportunity is one of the reasons I decided to live with my family. By the end of March, my final apartment bills and my full annual car insurance premium were paid. With those items out of the way, I’m able to commence a new financial plan, beginning with the money from my first pay of this month, which I received on April 11. Since I don’t have to worry about car insurance payments until policy renewal in March 2015, the monthly expenses I currently have to account for are my life insurance, gym membership, cell phone, gas, and rent. (Yes, contrary to popular belief, living with my parents does not mean that I live for free. I pay $300 in rent per month to my parents. It helps them out, and it helps me out by saving me more than half of what I was previously paying in rent.) My biweekly contributions to my dream fund, retirement savings, vacation savings, and account for once-in-a-while expenses will remain the same as my previous financial plan, as will my spending budget. As outlined below, the major changes featured in my new plan are an increase in the amount of money I’m allocating to paying down my student debt, the addition of an emergency fund, and regular contributions to my buffer account.

Student Debt

          Over both upping my Europe savings and starting to save a down payment for my own place, I’m choosing to allocate the majority of the money I’m saving by living with my parents toward paying down my student loan. I decided not to save more money for Europe per pay than I was while living in my apartment, because I want to prove to myself that saving for a grand European adventure would have been possible had I continued to live independently of my parents. That way, if I want to go on another big trip later in my life, I don’t think that I was only successful in doing so the first time because I was living with my parents during part of the saving process. Regarding obtaining my own place, I decided not to begin saving a down payment yet, because I’d prefer not to enter a mortgage with any other debts. Thus, the student loan needs to go.

          I began repaying my student loan in November 2011, about six months following graduation. It’s been three years since graduation and over two years of mostly minimum payments, and I’ve paid the National Student Loans Service Centre $5,677.68 in principal (I think I’m going to throw up) and crap loads in interest that I can’t bring myself to calculate. As of the beginning of April, the outstanding balance on my student loan was $19,453.06. – Yeah, it’s still a fucking biggie. (Bright side: There’s no longer a two in front of that number!) Ask me if my overpriced degree has left the envelope it came in. #thinktwiceaboutuni. It’s time to speed up the riddance of this reminder that I wasted four years reading textbooks for no return on investment.

          I was previously paying minimum payments of $285 per month. Beginning with the money from my first pay of April, I am now paying $301.56 toward my student loan per pay. Let’s knock this fucker out! Self five! (Aw, I miss How I Met Your Mother.)

Emergency Fund

          Considering that my annual car insurance premium skyrocketed due to my change of postal code in March and my computer had to be replaced due to a virus contracted last weekend, I’ve decided that I need to start building an emergency fund for such costly unexpected probs. I already have an account for once-in-a-while expenses, like oil changes, but I need an account to dip into for the big shit that hits me out of nowhere. It is typically suggested that an emergency fund contain three months’ worth of pay. What do these financial advisors think I do for a living, strip? I’m going to start with $25 per pay, and pride myself on my modest contributions because they’re better than no emergency fund at all. – Lawyered! (Seriously missing How I Met Your Mother!)

Buffer Spending Money

          Although my biweekly spending budget will remain the same at $75, I’ve decided to contribute $25 per pay to the buffer account I like to pretend I don’t have (because I might as well not, considering its usual balance of near-empty). Recall that I put my leftover spending money into an account for times that I need a little extra. The thing is: having any spending money left at the end of each two-week pay period has become so rare that this account barely exists. I want to be able to afford to go to the occasional ticketed event or splurge at a restaurant once in a while, so I’m making regular contributions to my buffer account to allow for such things. #TheHappinessExperiment!

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