PocketCoinage

It’s been almost two months since my last posting and I’m sure many of you are wondering where I’ve been.

Well, I’ve been killing my student loan debt.  Just this past week I paid off one of my loans and have two more to go.  If you look in the right-hand column of my blog, you will see my countdown.  The $700 is what I calculated the average monthly payment to be.  However, in the last two months alone, I’ve been putting my payments into overdrive.

I’ve been sacrificing by cutting back my lifestyle, selling things, and budgeting to become debt free sooner.  Guess what?  It’s working! I can see the light at the end of the tunnel.  In the past three months alone I was able to allocate almost $4,000 towards my loans!  The feeling is incredible.  Before I got fired up, I was on course to pay them all off in 4.5 years.  I never thought I would pay my student loans off in a year or less.  Now I’m on target for Summer/Fall of 2011!

The key is staying motivated, having a plan, and staying focused on one goal; not a few.  I think that was my main problem.  Now with the one goal in the crosshairs, I can take it on!

If you are like most former college students, there’s probably a few old text books sitting around and collecting dust.  For some reason I had a strange attachment to these books; even though they sat inside a storage tote down in the basement for well over a year.  I decided to take action and put them all on the shelf, inventory them, and see what each would sell for.

I started this project with one goal in mind: to sell items I no longer use, or need, in order to speed up my debt payoff.  There was also the fact I was collecting too much stuff.

Initially I started my search at bigwords.com to compare book buyback prices.  I wanted to get money for my books as soon as possible, but I noticed that many of the buyback stores had a minimum buyback amount.  This was a problem since many stores did not want all my books.

Then I noticed that if I gave it a little time and effort, I could possibly sell my books for more money through the Amazon Marketplace.  Sure enough this was the best choice.  Within three days, I had two books sell.  They brought in roughly $50, which is a quarter of my monthly loan payment.  That extra $50, before tax, will be going towards the principal.

I chose Amazon to sell because of their large presence on the Internet.  Their commission was also reasonable: $0.99 and a percentage of the sale.  Anytime I look up a product, Amazon is my first choice and they are usually the least expensive.  The ability to list something and have it sell within hours can give you a big leg up when trying to get out of debt.

Have you ever sold back your textbooks?  What service did you use and why?

After my most recent posting about Bad v. Good Debt, I got all fired up about paying off my student loans as quickly as possible.  I mean, I only wasted $1,520.48 in interest alone!  Before this posting, I really did not run the numbers to realize how much money I was losing.  I told myself there had to be a way I can reduce the payoff time to less than two years.  Currently, I am on target to pay off the loan in about four years.  However, four years is not going to cut it with my vision for the future.  I needed to put the numbers down on paper and see the results.

So last night I sat down to work on an updated budget spreadsheet that worked with my varying paycheck.  I found out that by slightly modifying where each dollar goes (house fund, emergency fund, etc.), I am able to boost my school payment from $440 to $700 every month.

How did I increase my monthly payment by $260?  I was able to:

• Judge my base take home pay and budget based on that
• Slightly cut back on how much money each item receives
• Cut back on a few unnecessary items (wants)
• Use the extra money in my pay exclusively for debt reduction

This alone should bring it down to around 24 months.  However, I’m going to take this a step further in an attempt to knock it out sooner.  Since I save bi-weekly, this creates an extra “payment” every year.  For example, I put away money for the mortgage every pay period.  By the end of the year, I will have an extra payment to use for pure principal.  For a short period of time, I’m going to be using this extra mortgage payment to knock out my student loan debt.  I’m also going to allocate some money from my tax return to reduce this debt.  By going this route, I am on target to pay off my student loans by December 2012 (15 months).  Who knows, if I come across some money, it may be less than 15 months!  Unfortunately, once all is said and done, I will end up losing another $800 in interest.