To continue on my getting out of debt journey, estimated to be complete in 2016/17, I've drafted up another weekly money challenge to speed up the saving and paying down process of my next student loan of $13,000. Considering I have since brought that $13k to $4,900, this post is a little late in the making, but better than late than never, yes? If you don't know what a money challenge is, I highly recommend reading an older post of mine to get the gist. In a nut shell, it’s an extremely simple savings plan that will steadily help you to achieve an end set balance of an amount you choose. You start with a deposit amount and then continue to multiply that number to the deposit amount for each week. So if you start with $1 on week one, week two you will deposit $2 to increase your balance to $3, week three you will deposit $3 for a balance of $6 and so on.
For each loan I am currently tackling, I use this Excel calculator to generate a new money challenge for me based off of what I can afford within the shortest amount of time. For my ASC loan, this was increments of $8 within 45 weeks for an end goal of $8,280 - about how much I had left of the $13k loan after I put all of my taxes/leftover holiday Etsy money down on it.
By changing the number in the yellow highlighted cell, the "amount" column will automatically change, doing all the math for you. Ideally I wanted to pay off this loan within 30 weeks, but in order to do so I would have to increase the weekly increment by $18, making my very last deposit on week 30 $540 - this exceeds the money I have left over every month from my full-time job after paying bills, so I settled for a little less money ($8) and a little more time (45 weeks) to be safe.
Since I use this sheet multiple time throughout the year, I tend to ignore the "month" column and focus on just the weeks. I duplicate this chart right into my mobile phone app, "Numbers," to easily keep track of my progress every week by marking each completed week in green.
Thanks to this money challenge and the income from my extra jobs, my $13k loan now sits at $4,900 with another $1,000+ on the way. To avoid the accruing interest, I empty my money challenge savings account into the loan every 2-3 weeks - so even though I have saved a total of $2,400 so far, I only have a few hundred sitting in the account right now. This helps keep the loan balance down, decreasing the daily interest and overall total I've paid at the end.
Money challenges are a great way to set aside the extra money you have left over from your paycheck every week and put a dent in your debt. You don't notice it's missing and you won't spend it on unnecessary shit.