Road to Financial Freedom Part II

The journey has been going on for two months. Here's an update on our debt.

Journey Update

What's up guys? It's been a little over two months since we started this journey to pay off our debt. We've made some progress and managed to pay off $4,031.96 ($6,472.04 when you include interest). It might not sound like a lot compared to what we owe ($118,467.90), but if you break it down by the amount of loans we have, it's pretty huge. We started off with 20 loans, and now we have 18 left. This was also done during the Holiday Season, which was extremely hard. We both love giving, so it was a challenge to resist giving our friends and family a lot of gifts. To make sure we didn't go overboard, we made a budget just for Christmas. When it was all said and done, we actually ended up spending less money than what we budgeted for.

Slow and Steady

I know some people might be wondering why we're paying off the smallest loan amounts first instead of attacking the loans with the highest interest rate. Aren't you paying more in interest by choosing to pay off your debts smallest to largest? Yes, mathematically you are correct. You are paying more. Our three biggest loans are from Sallie Mae. The largest one has an interest rate of 12%! Ridiculous! Our smallest one has an interest rate of just 3%. As you can see from our chart, all of our Sallie Mae loans increased since we started this journey. Part of it has to do with the fact that they're in deferment (until we get more income), and part of it has to do with the fact that the interest rates are so high. Each Sallie Mae loan increased by a few hundred dollars. Seeing that alone makes us want to attack those loans off first. And mathematically, that is the best option. The thing is, attacking debt is barely about math. Most people know how to do math, and if we were actually going by math, we wouldn't be in this mess in the first place. Math isn't the issue. The issue is your behavior. YOU need to change the way you behave with money. It's a mental thing. In two months we paid off two loans! Do you know how many loans we would've paid off had we attacked the loan with the highest interest rate first? Zero. It probably would've taken us almost a year to pay off one loan had we attacked the highest interest rate first. Mathematically we would've paid off the same amount, but the chance of falling off and quitting would increase. It's like when you're tryna break an addiction. When you say, "I'm never gonna do it again," most likely you will fail. But when you have the mindset of, "I'm just gonna take it one day at a time," you stand a greater chance of succeeding. Each day you go without that addiction is a win. It gives you momentum to keep moving. Our first loan we paid off was $883.56. That's only 0.007% of all of our loans, but we still paid off a loan. That's a win! That's momentum! $118,467.90 looks like Mt. Everest right now. It looks impossible! $1,269.72 looks awesome though! That's how much we have left to pay until we'll have 3 of our 20 loans paid off. That's another win, and that's also more momentum! Slow and steady wins the race. Remember in the words of Dave Ramsey, "Live like no one else, so later you can live and give like no one else." Stay Anomalistic My Friends!

Here's a breakdown of how much we owe as of right now:

Evan Xavier
Always cheesing for absolutely no reason 😁

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