I decided that, because the monthly lump debt snowball payment was becoming boring, I’d try a new strategy. With online student loan payments, it’s easy to set up additional payments in a few clicks, so I broke down the larger monthly sum into a weekly amount and set up 22 payments in addition to the regular monthly payments taken automatically.
I set them up to coincide with our paydays, which are conveniently on opposite weeks, so every week has a payday. It looks like this:
June 3 – $100
June 10 – $100
June 17 – $100
June 24 – $100
July 1 – $200
July 8 – $200
and so on until the whole thing is paid off. Each month’s payments are a bit different, since there are a few months where we get our ‘extra’ paychecks and we can pay more those months (26 checks/year means two ‘extra’ each year, and ours are always in different months, so we have four months with ‘extra’ paychecks that can go toward debt).
I’m hoping that this does two things:
1) Helps me to see the gradual change in our debt totals each week as I log into Mint.com
2) Keeps on top of the interest and puts more toward the principal
The way that student loan payments are structured, part of the payment goes toward interest, but it seems like regardless of the payment being $100 or $1,000, the interest never really gets paid down to nothing. I’m curious what weekly payments will do to the interest.