The notification came in while I was walking a beagle named Waffles down Green Bay Road: payment received, $1,100. Waffles did not care. She was busy with a very important leaf. I stood there grinning at my phone like I'd won something, which in a way I had.
I've been sending $1,100 a month to my student loans since June. A few people have asked how that works on my salary, and whether I could send more. Here's the honest answer, with every number.
Where my $2,908 goes
My paychecks are $1,342 every two weeks, after taxes and my 5% 401(k) contribution. That's about $2,908 a month. Here's where a normal month goes:
- Student loans: $1,100
- Emergency fund: $500
- My parents: $300 (my share of groceries and utilities)
- My dad, for my share of the car insurance: $95
- Gas: about $90
- Phone line on the family plan: $35
- Everything else: about $788
"Everything else" is lunches, toiletries, clothes, gifts, car maintenance savings, a couple of subscriptions and the occasional night out. It sounds like a lot until you list it. Most months a little of it is left over and goes to the emergency fund.
None of this works without the second line from the bottom being so small. I live in my childhood bedroom in Wilmette, and $300 a month is a fraction of what an apartment would cost. My parents never asked for rent. I insisted on paying something, and we made it official at the kitchen table in May. My mom accepted it the way she accepts compliments on her cooking, reluctantly.
Why I didn't go higher
I could probably squeeze out $1,300 or even $1,400 a month if I cut the emergency fund contribution. I thought about it. I decided against it for two reasons.
The first is my car. It's a 2012 Corolla with a lot of miles, and it's going to need something expensive soon. When it does, I want to pay for it without pulling money back out of thin air or putting it on a card. The emergency fund was $1,800 in March, and it's about $4,500 now. My goal is $6,000 by the end of the year.
The second is that I'm not trying to be miserable for two years. The extra $300 a month would save me some interest, but my loans are at federal rates, mostly under 5%. That's a lot different from the 27.24% card I paid off in May. At these rates, having a cushion feels like a better use of the next few hundred dollars than shaving a few months off the end.
I also keep 5% going into my 401(k). My employer matches 4%, and I'm not willing to give up a match to pay a 4.53% loan faster. That's my reasoning, not a rule for anyone else.
The $1,100 lump from pet sitting
All summer I walked dogs and did cat visits for neighbors, mostly people who know my mom from the library. I charge $20 for a 30-minute walk, $25 for a cat drop-in and $55 for an overnight. The summer total came to $1,420, which is more than I expected from a side thing I mostly do in sneakers.
Pet sitting money is self-employment income, so nothing gets withheld. I set aside 25% for taxes, $355, in its own savings bucket, and I'm keeping that habit for every payment from now on. That left $1,065. I added $35 from checking to make it a round number and sent $1,100 straight to my 5.05% loan in September.
That loan started at about $5,600 in April. After September's regular payment and the lump, it's down to about $900. The October payment should finish it. That will be the first of my six loans to disappear completely, and I'm trying not to check the balance every day until then.
My score also went up to 724 last month, from 668 in March. Most of that is the card being gone, but on-time loan payments help too.
Waffles, for the record, got a treat at the end of the walk. Her owner gave me one too, a homemade cookie, and I counted it as a fringe benefit.
