For a long while I have wanted to closely observe and document how my student loans grow every month. In October 2016 I started my blog documenting our family’s journey to a positive net worth, and here I was able to list my Navient account as a whole and see exactly how much interest was being added every month. Prior to 10/4/2016 my head was in the sand. I had no idea what I owed and every time I was forced to look I would be shocked to find that the balance had grown by hundreds, if not thousands, from the last time I looked.
If you want to change something the best way to start in my opinion is by tracking it. Since we started tracking our net worth it has grown $20,000 in a year some by hard work and some luck, which I think were caused by the magic of tracking the changes and reacting to them.
I started this same habit by looking at my loans individually. I started writing down all of my student loans and their balances but I continued to make my minimum payment, which was based off my income. If you have been reading my blog, you know that my minimum payment was about $125 too little each month. I wasn’t even keeping up with interest!
While I was tracking how each individual account was growing, I struggled with coming up with a clear and concise way to display it to my readers. Also, I may have been a little discouraged because I was still working on catching up on our regular monthly bills, and I had a few smaller bills to take care of on my debt snowball.
A couple of things came together to really get me encouraged to start chipping away at this debt. And I do mean chipping! I am making very small jabs at this debt now, but I’m beyond excited that I’m finally doing something.
First, a person on the Instagram debt free community recommended Shipt as a side hustle to a woman that I follow. That morning during my commute to work I heard a commercial on the radio advertising Shipt for our local grocery store. It didn’t occur to me then to look in to it but I was a little curious so that post reminded me that I wanted to research it. It turns out Shipt is a grocery delivery service! I signed up to be a shopper: I get a grocery list on the app, scan each item as I grab it, pay for it with a company credit card, and deliver it to the address provided in the app.
That was a very readers’ digest version of the job, but I plan to make another post in the near future about the side hustles I have attempted in the last year.
Shipt pays me $5 for every delivery I do, plus 7.5% of the order total, plus tips. It can add up fast! My very first paycheck I brought home $76.97 after completing shops the week before. I put $30 gas in my tank, put 30% away for taxes, and paid $25 extra to my smallest student loan!
From then I made a goal: Deliver as many orders as I can until I get to $100 and divide it as follows: 30% tax, less than $30 gas, and $25-$50 extra payment on my student loans.
But still I struggled with how to document and share the journey? During one of my drives to a delivery last night, I started talking out loud outlining my spreadsheet and got it figured out. I came home and plugged in all my numbers while watching Orange is the New Black and waiting for a load of laundry to dry.
Figuring out how much interest is added each month to each individual loan is still a bit wonky, because I can’t find it listed on my statement. The best I could figure was taking the previous statement from Navient and comparing the total interest with the total interest for the new month.
This has been a humbling experience. With the Sum feature on my table, I found that I accrue $121.06 of interest each month AFTER my $90.61 payment. We sort of already knew that, but when I looked at the total unpaid interest from the previous month is when the real shock kicked in. This is a huge hole. This is where not making any payments on your Income Based Repayment Plan will get you. This is where hiding from your problems gets you: Nearly $6,000 of unpaid, capitalized (compounding) interest. I’m going to start doing something about it. Or so I said.
Next, came time for my annual Income Based Repayment Plan income review. After submitting my documents and waiting a couple of months I learned that my minimum payment would be more than doubling! I am going from $90.61 due each month to $217.42. I am pretty happy about this because I can afford this payment, and I’m now being forced to at least keep up with interest if I do nothing more than make the minimum payments. No more glowing red accounts on my net worth statements!
With my side hustle going strong, and my minimum payments increasing, we should see these shrinking over the next year. I’m excited to look back 10/2018 and see where I am then. I hope you’ll be here, too!
Thanks for reading. You can follow me on Instagram @networthnegative for daily updates on our debt free journey as well as other shenanigans I get up to.