I will be debt free by 2012. There, I’ve done it. I’ve issued my ultimate goal for the year. I really don’t think at this point that I could come up with a more ambitious goal or financial plan in the short-term. By December 31, 2011 I will have all $22,735 of my remaining debt paid off. That’s nearly $23k in about 7 months.
Right now, my parents are currently contributing $485 to my student loan each month. We’ve been paying it down at a decent pace as I’ve been stacking money on top of their payment so that now more of every minimum payment is going to principal. In the beginning, about $240 of that $485 was going to pay down the principal. Now, nearly $330 is going toward the principal from each payment. Still, to achieve my goal of being debt free I’m going to need to pay an average of $2,850 on my loan each month on top of what my parents are paying. I can’t make that payment every month. However, I will be receiving a $5k bonus at work sometime this year, and all of that will be going to the student loan. This means that I need to be paying about $2,000 each month on my loan. This monthly payment is still a stretch, but it’s much more manageable. On average I’ve been paying about $1,500 per month on the loan.
There isn’t really much else to say at this point. I’ve issued the challenge to myself and now it’s time to step up and make it happen. I think such a narrow goal will help me focus on making big progress as opposed to having too many goals (paying debt, saving for car, saving for house, etc) and not feel like I’m making any progress. As the year goes on, it will be important tho I make sure that I don’t get discouraged if I’m not on track to making the goal. If I fail to reach my goal and end up paying off the debt in March 2012, I’ve still succeeded, right?