At the beginning of 2016, I set a goal of paying off $30,000 of debt. Though my student loans totaled more than $30,000, I thought this amount was adequately ambitious while not being completely unattainable.
$30,000 represented more than half of my income for 2015. To put this amount towards loans would mean sticking to a very strict budget throughout 2016.
As I’ve mentioned before, the majority of my debt is student loan debt. But at the beginning of the year, I was also paying off a car loan. I decided to follow the debt snowball method and pay off the loan with the smallest balance first, rather than the highest interest loan first.
In 2015, I was making payments towards five different student loans plus a car loan. I’m excited to say that the car loan and four of the student loans are now paid off! By following the debt snowball method, I’ve eliminated all but one loan.
So what was the actual dollar amount of this debt payoff?
At the end of each quarter, I posted a recap of my debt payoff progress for the previous three months. Here’s the summary of the numbers for the first three quarters of the year. Click on each link to read more about specific things I did each quarter to payoff these amounts.
At the end of September I was only $552 away from my $30,000 goal for the year! As hitting my goal was almost inevitable at that point, I set another goal for the final quarter of the year – to pay off $9552.36 ($39,000 total for the year).
Here’s what happened in Q4.
Q4 Total: $7,870.62
I was $1,681.74 short of my goal this quarter.
Looking back through my budget, I overspent on things like groceries and eating out this quarter. I also spent more on gas due to the recent increase in gas prices here in NJ.
Besides these little expenses, I had the unexpected cost of getting new tires in October. Matt and I also purchased flights to Miami for our friends bachelor/bachelorette weekend next year. Though I’m really looking forward to the trip and don’t regret spending the money, this was a couple of hundred dollars that I had originally anticipated putting towards my debt.
Though Christmas is usually the big budget-buster in Q4, I did really well with my holiday budget this year. As I had been saving money for Christmas gifts each month throughout the year, I had enough saved to cover this expense so it did not affect my December budget.
Though I didn’t hit my $9,552.36 goal, I’m still pleased with my debt payoff this quarter. I know I loosened up my budget compared to previous quarters, but considering a couple of larger unexpected expenses, $7,870.62 for the quarter is not bad.
Total debt payoff for 2016
In 2016, I paid off a grand total of….
This time last year, I would never have dreamed that I could pay off that amount of debt in a single year. I’m really proud of myself for sticking with it and exceeding my goal of $30,000.
What is the plan for 2017?
Though I’ve eliminated all but one loan, the remaining loan is a big one. Unfortunately, that’s how the debt snowball method works. But after a successful 2016, I feel like I’ve gained momentum with my debt pay off so this large loan isn’t as intimidating as it used to be.
You should probably sit down before I tell you the balance of this loan. And I’ll preface it by saying this single loan covered almost a year’s worth of my undergraduate tuition.
Are you ready? The balance of my final student loan is $46,116.16.
So in 2017 I plan to make a significant dent in this balance. How significant? I’m still trying to figure that out. I’m reevaluating my budget to see if there are any areas I can cut back on in 2017 in order to put more money towards my debt. I’ll let you know when I have a final debt payoff goal in mind!
In the meantime, Happy New Year! Here’s to a healthy and prosperous 2017!
Did you stick with your 2016 New Year’s resolutions? Did you manage your finances well in 2016? What are you planning to do differently in 2017?