Pay It Back

If you’re anything like Seth and I, you graduated college with some serious debt. Seth was luckier and smarter than I was in that respect. His parents had money set aside for college and he started with an associate’s degree at a community college, which was much cheaper. Even though he didn’t have to take out loans until his last few semesters, his student debt is not insignificant. And when you add mine to the mix, well let’s just say we pay significantly more on our student loans every month than we do on our house payment. Let’s repeat that: our student loans are more expensive than our house payment. There. Depressing, right? So while it’s obvious that paying as much as possible on your student loans every month is the best way to pay them off quickly, it can be pretty daunting when you pay huge chunks of your income every month and the amount you owe never seems to decrease. So Seth and I have turned paying our student loans off quickly into a competition for the year. Nothing like a little friendly competition to help you get creative about saving money so you can throw it at that debt beast lurking over your shoulder.

To do this, I have implemented a spreadsheet (of course). If you have read our budgeting post, you already know that I have a spreadsheet obsession because I am a control freak and that I love Google Drive because of the ease of sharing and ease of access. The spreadsheet actually serves two purposes. First, it calculates our yearly individual earnings. This is great because I am notoriously bad at keeping track of how much money I make at my bartending job, which means I really have no idea what I make yearly. Second, it calculates how much money each of us spends on our student loans as a percentage of total income. Here is how it works:

We each have our own color-coded area of the spreadsheet. At the top it includes our name and the year. Underneath that are a series of calculations, which we’ll get to in a minute. Underneath those calculations are two sets of columns. On the right is a column for the date each time you get paid and a column for the amount you were paid (after taxes). On the left is a column for the date you made a loan payment and the amount of the loan payment. You fill these in as they happen. So each Friday when I get paid by my day job, I enter the date and the amount in the left hand side of my part of the spreadsheet. Any time I make a student loan payment (or one is withdrawn automatically) I enter the amount and the date into the right side of my part of the spreadsheet. Easy peasy, right? Then the following calculations are automatically updated at the top of the spreadsheet:

• Yearly income – This tallies up the entire amount you’ve been paid for the year this far.
• Amount paid to loans – This tallies up how much money you’ve paid on your student loans for the year this far.
• Percentage paid to loans – This calculates what percentage of your income you’ve paid to student loans for the whole year.
• Starting loan amount – This you add up yourself and enter at the beginning of this challenge. It includes all of your loans.
• Ending loan amount- This you also add up yourself at the end of this challenge (the end of the year, or when you pay your loans off, or whatever else you decide). It also includes all of your loans.
• Percentage of loans paid – this will calculate what percentage of your loans you paid off based on the starting and ending loan amounts. It will read 100 until the ending loan amount column has something in it.

For this challenge you can determine the winner based on the percentage of income paid to your loans OR the percentage of loans paid depending on what you prefer. Seth and I have not decided what the prize will be for the winner yet (I mean, we have ALL YEAR to decide) but we have been rather competitive anyway about making sure each of us is keeping up with the other in terms of percentage of our income paid to loans. So far it’s fun and I’m already dreaming up ways I can cut costs elsewhere to leave him in my dust (which is good because I totally spend more money than him). It’s a win-win for us because no matter who wins, lowering our debt is good for us both!

The best part about this challenge is you can totally implement it with your friends or siblings. All you have to do is make a copy of this handy spreadsheet for your personal Google Drive and share it with anyone who wants to participate with you. Just be sure you are comfortable sharing the full amount of your student loans and your income with whoever you include in your competition. You wouldn’t want to share that kind of information with just anyone!

Student Loan Competition