My student loan payments are going to go up considerably – about $250 a month. This is going to happen in December. I’m not panicking about it, right? I’m not? Because I knew it was coming, and because now that it’s at its upper limit, I won’t have any worries about this happening again in the near or far future. If I can make my budget work with this amount of payment, even if PSLF doesn’t work out (I have faith that it will but am also preparing myself to be disappointed), then worst case scenario, I’ve got 10 years with this payment going.
But, with all that “hey, it’s okay, buddy, you’re going to be okay!” talk going on in my head, there’s also this: my budget is very tight right now as I try to pay off debts, and there just isn’t a lot (or any) wiggle room. I wiped out my meager emergency fund again trying to cover the cost of surprise car repairs (surprise! I didn’t have enough in my emergency fund, but at least I had something). Each time I pay something off, that payment amount rolls into the bigger debts that I have. I have a spreadsheet. It’s all a part of a very clear plan.
And that very clear plan doesn’t have room for an increase in money leaving the house at this point. That very clear plan depends on bills going down as smaller things get paid off. A la Dave Ramsey except not really, it’s just how I am doing things, because I’ve never really read Dave Ramsey’s drivel and don’t intend to (I’m sure it’s great information, I just…don’t like to listen to people who think women are so dangerous as to not get on an elevator with them).
So, to make up for this, I’ve swallowed my pride and done something I really didn’t want to do: I reduced my retirement contributions. This is not a good idea. I am not reducing the 529 plans, and I am not reducing it to 0 (it’ll still be at 10%), but it’s also not a good idea to be building up debt that includes huge interest rates just so I can keep contributing to retirement. It’s just not.
I will still be contributing to retirement, my husband will still be contributing to his, and we will still be paying down debt, which, after all, improves our net worth. I feel a little bit like I’m being strangled just admitting this, but also feel a little bit like I can breathe a little easier, which is a very strange combination of feelings.
According to the spreadsheet, things get considerably easier in about 12 months. I’m not sure we’ll be able to do that, but if we are self-disciplined, if I continue to freelance my rear-end off, 18 months should get us to where we need to be, to a place where I can increase those contributions again. And, 20 or so months after that, and my student loan payments should just -poof- disappear.
I’m okay with this decision, or, at least, okay enough. I was sad it came to this but it’s what needs to be done. We live a life that we want to live, including supporting family, raising three pretty great kids, and taking vacations to spend time with extended family. It would be amazing if the debt would disappear and I could just contribute all that money to retirement…but at the same time, that’s what we’re making happen – making that debt go away. Just a little slower than I had hoped.