Monday, May 09, 2005

So That's What It Looks Like

It's official: Sallie Mae and I are through. Well, except for the $.22 that I overpaid. Consider that a tip, Sallie. Go buy yourself something real nice.

As great as it is to see the account statement above (I started accumulating that debt way back in 1989), things might be a bit uncomfortable for a while. I like to keep $2000-$2500 in my credit union savings account (1.5% APR) purely as cushion, and maybe only $200 or $300 in its linked checking account. (It's my bill-paying account.) The final $1277 of my student loan payoff came from the C.U. savings account. So where I'm most comfortable seeing a $2k cushion, I'll now be looking at roughly $600~$1k.

I could transfer some or all of that $1277 in from my ING savings (3% APR) to keep my "preferred cushion," I guess. But I think I'll just wait and see how it goes. Quicken and I keep pretty good tabs on my household spending. If the C.U. account balance gets treacherous relative to what's needed, I should know about it in advance, and have time to act.

We'll see. I've survived, and slept okay, on way less cushion before. And back then, I didn't have secondary savings at someplace like ING to fall back on.

Side Note: I think I read on someone else's blog today that, with the ultra-low rates in student-loan land, it is pointless to rush in paying them off. I'd agree with that, mostly, until you get to the part about debt being as much an emotional issue as it is a financial issue. That last student loan balance bugged me to no end. I hated looking at it in Quicken; I hated looking at it online; I hated getting all the stupid snail-mail ads from Sallie Mae about consolidating or doing this or that with my account. That debt was more than just debt. It was also very much a symbol of all the stupid crap I did in my earlier days.

Yeah, that money paid for tuition, books, and dorms and rent. But it also paid for CDs, JBL floor speakers, Sega video games, and an endless buffet of delivered pizzas and nights-out-with-the-guys and, for all I remember, my lone trip to Fort Lauderdale. My wife and friends could probably throw a few more items in there, but I think the point is made. Put borrowed money in the hands of financial toddlers, and within ten minutes it has vanished, and not even Dora the Explorer can get it back.

Sometimes, with symbols like that, you're just not interested in all the relevant points and counterpoints. No, you just want them gone. As of May 9, 2005, all my symbols are gone.

Goooooo me.

— Posted by Michael @ 11:57 PM



This is YOUR WIFE. :D I just stopped by to see if you updated about paying off the student loans. I had to laugh when I read about THE FLOOR SPEAKERS.

I still remember visiting you in your apartment, and you had those gigantic speakers in your room. You told me you got them with the money that was 'left over' from your student loan (your words, not mine!!). I about had a heart attack. I was raised to think of money in a different way than you, and my mind was screaming, "There IS NO money "left over" from a student loan -- you still have to pay it back!!"

At times I would look at those speakers, and know that you were still paying on them. I figure it must have taken twelve or more years. That's a long time to pay for some speakers.

But I'm proud of you. My parents are proud of you, too. And at least the speakers still sound good, right? (now I hope they don't blow out sometime in the next week or so . . . )


P.S. I hope I don't embarrass you by posting . . . that is not my intention at all!!



This is YOUR MOTHER. :D Congrats on being debt-free! I'm sure you must feel really good about it right are one of the first bloggers to accomplish such a large goal (there was some lady a while back who paid of her $20,000 CC debt by asking for donations).

To Michaels Wife,
You know he has some extra cash laying around now...please send it to me.

Thank you,



I realize there is a typo in my last comment.



When I paid off my student loan in May 2002, I still had nearly $10,000 in credit card debt. Despite my success, it got me thinking about how I basically traded fairly good debt for very bad debt. It got me mad and it got me going. Three years later, I now have no revolving credit card debt.

Think of it as the last lesson of your college years.

Anonymous Anonymous
, at 12:26 AM, May 12, 2005  

I just did the same thing (I overpaid $0.38) and I understand your sentiments exactly! Everytime I opened my Quicken and saw that balance I got mad.

My part-time job provided me with and extra $2500 and I had to choose between SallieMae, CITIbank or Savings. Like Dave Ramsey says, "Personal Finance is more Pesonal than Finance."

Anonymous Anonymous
, at 8:10 AM, May 12, 2005  

Congrats Michael!

I'm glad you see you post about the emotional/psychological parts of this kind of debt. When I made my decision to borrow to make my 2004 Roth contribution I was just about to be debt free (aside from mortgage) and even though I think it was the right choice for me, it drove me NUTS to have that "new" debt hanging over my head for three months (after living with several thousand dollars of debt for *years* LOL)

I will not do that again, that's for sure...the taste of freedom is too SWEET!

** Comments Closed on this Post **

Thoughts on my personal finances, goals, experiences, motivations, and accomplishments (or lack thereof).

My financial life began turning around when I took responsibility for it.
— Dave Ramsey


Start (2005-12): ~$21,900
Currently: $0
[About Our Debt Paydown]


Savings Goal: $15,000
Currently: ~$15,115
[About Our Liquid Savings Goal]