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Monday, December 1, 2008

Frugality continued. . . .

Whew! Well, I've reveled in my lack of credit card debt over the past three days, since Thanksgiving. Now, it's time to plan for the future, which is going to require continuing my frugal ways. I do still have that student loan debt, after all. I'm just not sure I'm going to start paying it off yet, for reasons I'll explain below:

In the Fall of 2009---almost a year from now---I'll most likely have to drop to 75% of full time at my day job, to account for an unpaid practicum experience that is required in my graduate program. I'll probably need two full days during the week for the entire academic year (2009-2010) to take care of this requirement. Which means, of course, that my income will plummet during that year. I've been avoiding thinking about this complication, because I really wasn't sure how I was going to be able to pay my mortgage and eat with a decreased income. However, now that I'm credit card debt-free, I feel like anything is possible!

Here's what I'm currently thinking I'll do to prepare for this. I'm going to try, starting on January 1, to live on just my salary from the day job. Then I can 'bank' the earnings from my night job, which will allow me to dip into that savings during the year that I can't work a full time paid job during the day. This is going to require some very creative budgeting, especially since I would like to now send 15% of my earnings into my 403(b) plan, since I dropped it to 1% while I was in debt-repayment mode.

Anyway, all of this means that my student loan debt repayment will most likely need to be put on hold, which bums me out. A commenter a few weeks ago mentioned her own student loan debt struggle, and it motivated me to start thinking about getting rid of this debt. At this point, I can't even bring myself to look at my account, to see how much I owe (last time I checked I think it was about $55K). I'm scared to know. That's how bad it is.

Who knows? Maybe the economy will miraculously recover in time for me to sell my house next summer, and this will all be moot. Then I could send that savings straight to my student loan, and really get started on becoming truly debt free! I'm not holding my breath on the economy, though. . . .

As you can see, this 'plan' is a bit of a work in progress; I admit that I haven't even really worked the numbers out yet with my zero based budget spreadsheet, nor have I made the change to my retirement savings. My objective this week is to get all of this worked out, so I can start the New Year with a new financial goal.

4 comments:

momstheword said...

Well, I am excited for you, because you are making some wise financial decisions for your future. Think of where you'd be now if you hadn't decided to get out of debt!

I appreciate your sharing your journey with all of us. You motivate and encourage me every time you post. Way to go and have a great week.

marci357 said...

Keep gathering your facts, which includes the loan figure, and place it all on your paper. Look at it every which a way... Then just let it gel for awhile, and maybe the answer will come to you.

Living on just a portion of one income would be a very good start on any plan tho :)

Good luck!

Finally Frugal said...

I know (rationally) that I really need to log into salliemae.com and take a look at where I stand with that student loan debt. Emotionally, it just makes me sick to my stomach!

I'm going to take a big breath, though, and do it. Assuming I can remember my login id and password (it's been awhile. . .) I'll update you all on the damage! You're right, though, Marci, I need to see it on paper and really address how I'm going to do it---just as I did with the credit card debt.

Here goes nothin'!

Chris @ BuildMyBudget said...

Wow, congratulations on finally paying off your credit cards! I know the feeling you're talking about, as I finally was able to pay mine off after selling one of my prize possessions to do so. It was tough, but it was worth it(I think! lol)

I feel your pain on the student loan issue, but you are going to feel much better once you face it. Good luck!

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