September: Under $74k to go! Over $21k paid off!

Huzzah! In this month’s report we hit a few milestones. Officially under the $75k mark, actually under $74k as well. A couple months ago, one of my minimum loan payments went up from $224 to $315 (that was with the “graduated payment plan” and I was actually so far ahead I got kicked up to the higher payment), so with an extra $1500 thrown at the loans each month, I actually contribute a total of $2,057.14 (same as my August payments, minus the bonus). With $207.87 going to interest, that was a whopping $1,849.27 going to principal…

For a new grand total of $73,669.03!

That’s a total decrease of $21,357.84 paid off since the blog birth, or 22.5%. Almost to the quarter mark!

September was pretty awesome, and I’m sad it’s already October now. We stayed pretty much in budget, other than our California vacation for 5 days–not nearly enough time! I got to meet my 2-week-old baby nephew, went wedding dress shopping with my mom and sister, and we took our engagement photo session with my brother’s fraternity brother (gifted to us, PF win!). We also watched the 49ers vs. Eagles game (Mr. Bacon is a huge Eagles fan), and also went to a SF Giants game. Yay! For an almost-week-long vacation, we kept our costs pretty reasonable. We stayed at my parents’ house, borrowed one of their extra cars, and hardly paid for any dining out (since most people were happy to see us and treated us…thank you!!!). The only major expenses then were the flights (still under $1000 for both of us) and the NFL tickets (just under $200 for two). Both the football and baseball tickets were bought 2-4 hours before the games on Stubhub.com as we’ve learned it’s way cheaper that way! The baseball tix were under $17 each for mid-level seats.

Of course with seeing my family, planning our wedding, and my first nephew popping out, it’s really made us think about where we want to live long-term. Which is…back to California! I don’t think the two of us had really thought seriously about starting a family until just recently, and we both want to be closer to my family when it happens in the next few years. (My mom is definitely more nurturing and LOVES babies…while his parents are a bit older and have their own health issues.) Even though Mr. Bacon is a born-and-bred East Coast boy, he falls more in love with California each time he goes! (This was his second trip. Can you blame him? No snow or frigid winters???)

Which brings me to some research we’ve been doing recently and a potential alteration of the “Student Loans Game Plan”. We contemplated just making the move out west in the next year or so, and renting a place–but apparently there are many cheaper options renting a safe place just outside of the Washington, DC area (where we are now) than there are in the SF Bay Area. Even though the cost of living seems comparably high in both places. Emphasis on the SAFE vs. sketchy places! In fact, it seems that it’s cheaper to actually buy a place than rent it back in SF. So that realization, along with the fact that there’s no way we would move back in with my mom to save money (NO. just no!) and we really don’t want to move twice in a 2-year span, means we probably need to start saving for a down payment.

Now, I’ve been hell-bent on paying off these loans, and haven’t saved much for anything (no hefty emergency fund, retirements savings or house fund). I’ve been wanting to pay off the loans first, then save for a house, then move…before we even think about having kids. I’m 32 now…and all that might take a while! The current Game Plan would see me done with the student loans in the Spring of 2017 (when I’m 35), and then another year of saving for a house would put me at 36.

CRAP. Apparently holding your younger brother’s newborn does kick your biological clock into gear!

Well. Now my loans are still pretty hefty, and interest will accumulate hugely on a loan that’s over $70k. So what I’ve been contemplating is: paying off the higher interest federal loan (there’s still about $35k left at 4.62% interest). Which would get me down to just the private loan ($36k at 3.25%) by January of 2016–just a few months after the wedding. At that point, it’d be similar to the terms of a car loan and we could start throwing huge amounts at the currently non-existent housing fund. (Yes, I had to change “I” to “we” as we’ll be married by then!)

That would get us to where we want to go (physically) probably 2 years quicker, and financially I know I can wipe out that last student loan in 12 months–it would probably be under $35k by the time we do move. Of course as a married unit, we would have to start lumping all the different debts together, but all Mr. Bacon has now is his car loan, which would be half paid off by then. A little weird to start thinking of us merging our finances together and the long-term plans, but exciting!

Anybody have experience or opinions with the whole “Save for a house” vs. “Pay off student loans” conundrum? Or renting vs. buying in a place you know you’ll want to settle down in?

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2 thoughts on “September: Under $74k to go! Over $21k paid off!

  1. I think your revised plan sounds wonderful! Back when we were broke and it seemed like our debt would never be paid off, I was putting all of my side hustle income toward student loans, and then we were saving as much of our income as we could–so we were saving and paying down debt at the same time. Eventually, we decided to use the money saved to get rid of the student loans, so then we had to start all over saving. It sucked when we did it, but bc we freed up so much money, we’ve been able to save $40k in 2014 alone. While I LOVE being debt free, I do wonder if we would have been able to save for our down payment sooner if we had kept our savings… I mean, my student loans were getting paid off eventually, what would a couple hundred hurt, right? Ideally, you’d be able to be debt free and then save for a house, but life is not ideal all the time, and you also have to do the best you can and decide what’s best for your situation. For example, we already know that we’ll most likely need a new car next year (new or used, haven’t priced it out yet), and we are fully willing to take out a loan, rather than dip into our down payment savings.

    1. Thank you for such an extensive reply! I think it’s great to realize you’re not always in an ideal situation and figure out what’s next best 🙂 Good luck with your housing fund!!

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