One of the things I always read about on personal finance blogs was to financially prepared for the unexpected. You never know when something is going to happen that’s going to rock your budget and make you frantically scramble thinking how you’re going to afford this. This happened to me when I realized I broke even on my budget, before I even applied my extra student loan payment I make each month. Life throws curve balls at us everyday and it’s important to be financially prepared for them so they don’t hurt us as much.
June was an interesting month for me. I had two large unexpected expenses that basically was my entire extra student loan payment I plan for each month. The first one was my new teacher mentoring fee that goes to my mentor teacher, $550. The second was when I brought my car in for an oil change and they told me I needed all new brakes and two rotors replaced, see ya $955. The second was completely unexpected, and what really hurt my budget. I take my car in for it’s oil change and they always inspect the brakes for me. Everything was fine at my last oil change and suddenly 4,000 miles later, new brakes and rotors are needed.
This was hard for me and made me make a tough decision. I could either make my extra loan payment for June and pull the money from my savings, or not make my extra loan payment and not need my savings. My immediate reaction was to make the extra loan payment and pull from my savings because of my aggressive goal to payoff my loans by the time I’m 31. I looked at my savings and realized even if I did pull that $1,500, I would still have enough in my savings to last me a couple of months.
This made me decide to make my extra payment to my student loans in June. When hit with the unexpected, you need to closely look at your goals and decide what is most important now and for the future. For me, paying off my student loans as soon as possible is my most important financial goal. How have you planned for when unexpected expenses come up?
Wow, 2015 was an incredible year for me. I landed my first “big girl” job as a 5th grader teacher in May, graduated with my masters in August, and started my first year of teaching in September. Of course, I also started this blog. When I started this blog back in July I was truly planning to mostly post about my first year of teaching. I figured it would be a nice outlet for the stress I knew I would be dealing with. However, in the last year, I have found a passion for personal finance and have found myself blogging much more about that. Especially when I have this massive amount of debt weighing me down each day.
I did create a solid plan to pay down my debt this year once I started working, which has helped me almost double my monthly loan payments so far. In 2015, I was able to get my largest loan with the highest interest rate down to 78% paid off. I have been working towards paying off that loan since I was in grad school, so seeing that high paid off percentage is very motivating!
I have a lot planned for 2016, and it might be a little too much to be honest. My plan is to make 2016 a productive year for me. I want to find myself always actively doing something, whether it be school work, blog work, being with friends, whatever it is, I don’t want to be complacent. I want to push myself harder and do more than I ever have before. My goal is to make $2,700 loan payments each month, which is a bit of a stretch for me. This requires me to figure out ways to save and make more money. Which is another goal I have for this year.
I strongly believe in goal setting and I feel that it keeps you motivated knowing you are working towards something. Whatever it might be, I suggest making mini goals to reach your big goal, this makes it more likely that you will succeed and make the task less daunting. For example, I picked $2,700 a month for my loan payments because I want to have my loans completely paid off by the time I turn 31. This might sound crazy since I still have about $185k in student loans, but it’s possible if I work hard and keep my goal in mind. So, what are your goals for 2016 and how do you plan on accomplishing them?