May 2018 Debt Payoff Update: $4,445.36 Paid

Welcome to my debt payoff update for May 2018! In these updates, I detail how much debt we paid off, tell you about any extra income we received during the month, and finally tally where we stand.

I started this site to hold Mr. TMG and me accountable in our debt payoff journey. I also want to inspire and encourage others who are in debt (especially if you owe six figures like we do) by showing everyone that debt doesn’t have to be forever.

Whatever your numbers, I hope you find some inspiration in our story.

Let’s get to it!

Debt Payments

Here is a breakdown of all of our payments in May:

Navient 1-12 Direct Loan-Unsub: $2,890.37
Navient 1-10 Direct Loan-Unsub: $162.42
Mortgage: $1,368.26
FedLoan: $24.31

As I mentioned last month, we’ve been on a streak of paying off at least one loan each month since August 2017. It was a great run while it lasted, but sadly, it has come to an end.

We’re down to the big dogs now. All of our remaining loans are 5 and 6 figures. Sheesh!

If you’ve been following these debt payoff updates, you’ll notice that there’s only one entry for FedLoan now, rather than two. FedLoan shows Mr. TMG’s subsidized and unsubsidized loan balances as two separate entries, but we realized this month that it’s actually only one loan. Who knew?

You can check out the links below to see previous debt payoff updates:

• 2017 Debt Payoff Update: How We Paid Off $47,029.45 in One Year
• January 2018 Debt Payoff Update: $8,029.40 Paid
• February 2018 Debt Payoff Update: $13,051.03 Paid
• March 2018 Debt Payoff Update: $16,203.64 Paid
• April 2018 Debt Payoff Update: $6,460.98

I told you here that we’re generally following the debt snowball method, which has been working out really well for us. In addition to tracking our loan balances, we also track our minimum payment amounts, which is a huge part of the debt snowball method.

Our total monthly minimum loan payment has decreased by $1,000 since January 2017!

That’s so crazy to me! I seriously can’t believe it.

It’s great to have more wiggle room in our budget. That’s $1,000 that we aren’t obligated to pay to anyone (although we’ve been allocating it to our debt payments).

Extra Income

Another relatively low-key month on the extra income front in May. Mr. TMG worked some shifts at his side job, which brought in an extra $2,700.

Related: 21 Side Hustles You Can Start Today

This was his last month working at the side job. It’s been a great experience for him professionally and helped us make quite a dent in our debt, but it will be nice to have him home on the weekends again.

For some exciting extra income reports, check out the updates from February and March 2018, where we got thousands of dollars back on our tax refund.

(By the way, I know a tax refund isn’t technically extra income, but it’s still income above what we would see in a normal month, so whatever.)

Related: How to Win at Money with Tax Refunds

Updates

We’re still working our zero-based budget. With a zero-based budget, you budget every single dollar of your income in a given month. Your budgeted income minus your budgeted expenses should equal zero.

We balance our budget at the end of the month and make our extra debt payment at that time.

By doing it this way, our extra payment should include the budgeted payment amount and extra income we receive, along with any money we didn’t spend in our budget categories. (That didn’t really work out this month because of some extra expenses, which I’ll get into in a minute.)

Our new line item for Little TMG is working really well. We budget $100 each month for him, not including daycare expenses, which are taken directly out of my paycheck.

We use that money to purchase clothes, diapers, or whatever else he may need. (Diapers are expensive, and don’t let him run out of wipes at the same time…Lawd hamercy!)

By the way, if your kid is growing as fast as mine and needs new clothes all the time or even if you’re just looking for deals on clothes for yourself, check out ThredUp. I recently got Little TMG 4 pairs of pants for $30!

I say this every month, but we’re still going over budget in some areas. We should probably adjust those items in the budget, but I’m not going to worry about it too much because we’re still making progress.

On the expenses side, I mentioned in my April update that we would have to pay for some fairly expensive repairs for Mr. TMG’s car in May. He needed a new clutch, which came out to about $1,800.

I also previously mentioned that Mr. TMG will be finishing residency this year. He finishes at the end of this month (June 2018). I can’t believe how quickly that time flew by, although it certainly didn’t feel quick in the moment! 🙂

To celebrate, we’re taking a vacation later this summer. We paid for part of that in May, as well, which totaled about $750.

Because of those large expenses, along with a few smaller ones that added up, our extra payment wasn’t where we’d like it to be, but those expenses were worth the lower extra payment.

Remaining Balances

You know how people say the best way to eat an elephant is one bite at a time?

I hate that saying. Who eats elephants?

Still, the point behind it is so true.

When we set out to pay off our debt and realized we had over $670,000, I felt like I couldn’t breathe.

Although Mr. TMG’s income would be increasing only 18 months later, his student loans are on income-based repayment, so his minimum loan payment would also be shooting up.

Now, a little over a year later, we’ve made tremendous progress. It all started with taking the first step.

Here’s where we stand currently:

Grand Total: $607,107.94 remaining

We’ve still got a long way to go, but I’m very proud of how far we’ve come. This interest though… (For anyone who’s keeping track, we’ve paid $95,219.86 for a $63,000 decrease in our debt balance.)

As I mentioned in the last update, we decided to continue moving forward with the smallest student loan and work our way down from there.

We thought that our next smallest loan was Mr. TMG’s subsidized FedLoan loan, but when we went to make the extra payment on it, there wasn’t a way to direct a payment only to the subsidized portion. Ultimately, we realized that the FedLoan consolidated loan is only one loan, even though it shows the subsidized and unsubsidized amounts separately. #FAIL

So we combined the info for those two loans on our chart, and we’re moving forward paying off the rest of my loans.

It is so amazing to log into my student loan account and see only 2 loans where there used to be 14. In terms of the number of accounts, we’re closing in on the end.

As you can see, these few final loans are the bulk of our debt balance, specifically Mr. TMG’s med school loan and our mortgage.

We’ll just keep pushing forward and eating this elephant giant pie one bite at a time. (Who doesn’t like pie?) 🙂

How did you do with your financial goals last month? Did you make the kind of progress you wanted to?