Remember my friend who I helped with a debt reduction plan? As it turns out, he didn’t share the full picture of his debt at the time. In addition to the student loans, he also had about $2,000 in credit card debt to pay off in addition to the $11,000 in student loans. He has also had some large expenses come up that he hadn’t been expecting that slowed down his progress. This also presented a moment for us to discuss the importance of budgeting. When you have a budget where you plan out your income and expenses, large expenses like semi-annual car insurance should NOT come as a surprise.
Thankfully my friend has had the opportunity to work a lot of overtime for the past few weeks and has been able to significantly increase his take-home pay to help kick-start his debt payoff. He is continuing to work a lot of overtime and has also reduced his discretionary expenses. I’m pleased to say that he is getting very focused on beating this debt as quickly as possible.
With his permission, I am going to provide periodic updates of his debt and outlook.
As you can see, over the past 6 weeks, he has been able to pay off nearly $800 in student loans, and $1,900 in total debt! Looking forward, that pace will likely be slowing down as he may not have as much opportunity to work overtime. His current plan is to be paying at least $1,000 per month towards debt, which would have him out of debt in just under 1 year.