132 Plan to Pay Off Student Loan

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student loan debt I have started on a new plan to pay off my student loan. Some of you may recall that I had a plan a couple of years ago to pay off my student loan. That plan started off strong. I got my student loan debt down to $122,000 from $138,000.  After that the plan fizzled out and my student loan debt climbed back up to a total of $132,000 earlier this month. It is depressing to see $10,000 get eaten up by interest. That money basically went up in smoke. Having a student loan accruing about $600 in interest every month really sucks.

That is why I’ve started on a new plan to pay off my student loan. My previous student loan payoff plan fizzled out due to a lack of income. This plan will be different because I now have a steady source of income. I might be counting my chickens before they hatch, but my seasonal job has offered me a long-term position. I should be signing the paperwork to make it official today. With this steady source of income I’ll be able to consistently make payments on my student loan.

Even with the new job the task of paying off $132,000 in student loan debt can seem overwhelming.  I’ve come up with my 132 plan to make the task seem a little less overwhelming. Rather than thinking of the humongous $132,000 of debt I have to pay off, I’m thinking of the debt as 132 $1000 payments. This amounts to the same thing, but it seems more achievable.

With the income from my current job I should be able to make 1.5 payments a month.  At that rate it would take me about 7 1/2 years to make 132 payments.  With interest my loan wouldn’t be paid off with 132 payments over 7.5 years. With interest included it would take a little over 10 years of payments to pay off my loan. However, I plan to make a big payment sometime this year and hopefully refinance the loan next year so the 7.5 years could be a reasonable estimate of how long it will take me to pay off the loan.

Even though I like my current job okay, it would be extremely difficult for me to stay there 7.5 years. In order to shorten the payback time frame I plan to make extra money in addition to my job income. Last year, I made about $10,000 from FBA and another $1000 from my blog. That would be an extra 11 payments a year which would help pay off the loan quite a bit faster. If I could figure out a way to make 10x as much money from FBA I could have the loan paid off in a couple of years. Of course, that is easier said then done.  The reality is that I’m making much less from FBA now that I’m working.  To start making significantly more from FBA in the reduced time I have available I need to start selling wholesale and/or private label products. I’m making it a goal to do at least one of those this year. I will keep you updated on those plans as they develop.

It would also be nice if I could start making more money from this blog. In my best year I made about $20,000 from this blog and some other blogs I own. It isn’t likely I will ever get my blog income back up to $20,000, but I do believe I can do a lot better than I am now. I need to start blogging more consistently and producing better posts to get more readers. And I need to start trying to make money from my blogging. I’ve been pretty lazy about optimizing my blog for display ads and affiliate income. If I could just get 26,4000 people to sign up for Qapital with my referral link I could have my debt paid off. Okay, maybe that is a bit of a longshot. I’d only need 1320 people to sign up for Personal Capital to get my student loan paid.  Okay, that isn’t realistic either, but I could make enough from these to make a couple extra payments a year.

For now, I’ll be concentrating on making money from my job. During the tax season overtime is available. If I were to work all of the available overtime I should be able to make an extra payment a month. Once I no longer have the option of working overtime I’ll concentrate more on ways to make money beside the job.

Although I will be happy when I finally have this debt paid off, it is also depressing to think that after paying all of this money I’ll just be at zero. There are some minor fringe benefits that go along with paying off the debt. I get a tax credit for $2500 of the student loan interest paid each year. Another plan I have to get some extra benefit from paying my student loan is to use the student loan payments to help meet minimum spend requirements on credit cards for signup bonus purposes. I should be able to cycle through 3 or 4 credit card bonuses each year. Also, while I’m paying off my student loan I should have my highest ever income years which will help increase my social security benefit a little bit. I’ll need it since I won’t be saving any money for retirement while I’m paying off the student loan. I’m sure there are some more positives to paying off the loan than I’m thinking of right now.

The 132 plan is off to a good start. I’m already down to 130 payments since the start of this month and I’ll make one more payment before the end of the month. Although, I’ve broken the debt down into 132 payments of $1000 I will also be sending in smaller payments between paydays to help decrease the debt a little faster. Every little bit will help.

If you have any suggestions on ways I can pay my student loan off faster I would love to hear them.

February Expenses -$1693.07

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Here is a breakdown of my expenses for February.

Household $530.41
Entertainment $81.53
Transportation $29.67
Food $153.46
Student Loan $505.95
Travel $293.08
Phone $26.50
Health $72.47
Total $1693.07

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February was a decent month for expenses. Although it was a lot higher than January, that was to be expected since January’s expenses were so low. The main things that made this month’s expenses higher were the student loan payment of $505.95 and the travel expenses of $293.08.  The student loan expense is a necessary expense if I’m ever going to get it paid off. The travel expense was for the annual fee on two credit cards and two six-day museum passes for our Paris vacation. The credit cards are going to get me two free nights in Paris at an $800 a night hotel so I think that is a pretty good deal. One of the credit cards is also allowing me to get a hotel room for $75 a night in Boston where we will be staying the night before taking a plane from Boston to Paris. That room would have cost at least $150 if I didn’t have points from my credit card. I get a lot in return for paying the annual fees on those credit cards. Their will still be lots of miscellaneous expenses, but I’ve got all of the big spending done for our Paris vacation. If it weren’t for the student loan expense and travel expense I would have met my $1000 spending goal for the month.

March’s expenses will be pretty similar to February’s except I’ll have a bigger student loan expense.  I’ll be okay with that.

How was your month?

March 2017 Net Worth Update

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penniesIn order to keep track of my financial progress or lack of progress I have decided to calculate my net worth a few times a year.

My net worth as of 03/3/2017 is as follows.

Assets
Cash – $11,356
IRA – $25,909
Roth IRA – $10,988
Solo 401k – $1086
Car/Stuff – $3900

Liabilities
Student Loan – $131,908
Credit Card – $2202

Net Worth = $-80,871

My net worth improved by about $5000 last month. I’m quite pleased with that increase. The rising stock market and increased cash savings from my job proved to be a potent combination for increasing my net worth.  Although my assets had a nice increase my liabilities only decreased by about $100. I need to do more work on them. That will be the subject of an upcoming blog post. My net worth not counting my student loan would be $51,037.

This month should also be a good month for my net worth since I will be getting three paychecks from my job. I hope to keep increasing my net worth each month and hopefully one day I’ll get to $0.

I’ve been using Personal Capital (affiliate link) to help track my net worth. It keeps track of all of my financial accounts and my student loan making it pretty easy to calculate my net worth each month. It is free to sign up. If you would like to sign up I’d appreciate you using my link. All blog income, including affiliate income, goes to paying down my student loan.

Personal Capital

February Income – $3685.69

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Here is a breakdown of my income for February.

Qapital $5
Interest $4.36
Online Income $320.26
Amazon FBA $593.48
Cash Back $80.05
Job $2682.54
Total $3685.69

My February income was pretty good. Receiving two full paychecks contributed most of the income for the month. I was happy to make almost $600 from FBA since I barely sent any products in during the month. I cut the prices on a lot of my items that I’d had for a while to get some more sales. I’m almost completely sold out of items now. I’ll send in a few more items this month though.

This month will be an even better month for income because I will have three paydays this month. My other sources of income will probably be down this month, but the extra paycheck from my job will easily make up for any shortfall.

Tight Fisted Miser Turns 10

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I published my first blog post on Tight Fisted Miser way back on January 28,2007. It is hard to believe I’ve been writing this blog for over ten years now. I’ve been blogging even longer than that. My mostly abandoned Bank Bonuses blog was started back in December 2005. That makes me one of the longest running personal finance bloggers around.

This blog got off to a pretty good start when I first published it. I was able to attract a small amount of readers right away and my audience slowly and steadily grew for the first few years of this blog’s existence. Part of that was probably due to there being a lot fewer blogs around back then. I also wrote better and more frequent blog posts back then. I never kept track of site stats, but I think this blog’s reach peaked sometime in 2011. That was also my most profitable blogging year. I made about $20,000 from my blogs that year. I made just a little over $1000 from my blogs last year. My audience and income have both diminished considerably in the last few years.

The blog is still alive though. One of these days I will get back to blogging regularly and hopefully build the blog back up to where it used to be. It won’t be too soon since I’m working now, and then I’ll be in Europe, and then I’ll be hiking. But after I’m done with all of that I just might get the blog going again. In the meantime I will at least have my monthly income and expenses reports. I started this blog to show that being frugal allows you to have a decent life without earning a lot of money. And I feel like I’m still living proof of that. I hope to keep this blog going for another 10 years. To all who are still reading this blog, thank you for reading.