Hi all,

I'm trying to get rid of my debt: 20k in student loan at 0% interest.

Purpose for doing this: to earn more income to pay off my mortgage (300K+). I want to be in position to give up my job and retire early before I am 50 so that I can do something other than play the 9 to 5 game (small, organic farming is my goal - which sort of makes me laugh because my current job is a million miles away from this at the moment; I'm a civil servant). I have an EF of only $50.00 at the moment.

At the moment I lose $214.20 a fortnight automatically to pay this SL debt off, so I thought I would tackle it with my other remaining income, which is about $500 a fortnight. I have trimmed everything to the bone to be able to do this; I'm totally committed to getting this debt off my back!

So, my plan is to attack my SL as vigorously as possible within my currently established budget and to have it paid off by September 2012. I have a full time job plus I get the odd day of casual work on the weekends as well.

So far I have made one $500 voluntary contribution towards paying of my SL. There is an incentive from the government, 10% added to all voluntary payments of $500.00 and over.

Ok, so my $500 dollar voluntary payment went through. I checked the govt website and had a yay moment for myself. Its the first voluntary payment I've ever made on my SL. Only 20,167.01 to go!

My EF still stands at $50. I'm aiming at a first step of only $500 for this year (2011). I hope to expand to $1000.00 by the end of next year, barring emergencies. At the moment I only put odds and ends into the account, prefering to focus all efforts on dispatching my SL (which I loathe with a vengence), so it will be a bit hit and miss. On the good news front I worked half of Saturday and should receive a little bonus money for this fortnight.

I encountered an obstacle yesterday when I looked at upgrading my old desktop PC. At the moment it looks like $1500 to do so, but I don't really need it for work, just a bit of gaming. So I'm just going to have to suck it up and save for it after my student loan is gone. Instant gratification is a hard habit to break for me!

Would it not be more beneficial to put the extra payment towards an e-fund and then work on extra payments after?

The balance of paying bills and saving is really crucial. There is nothing like a cushion to help you in really tough situations i.e. your car heating up and having to get it towed!

Your first post, there's something really screaming at me, you bought a $300,000.00+ house yet its difficult to save for a $1000.00 efund?

You need to trim the fat off of your income or at least re-prioritize how you spend your money.

Good point aboout the efund. I did have it up to $800 earlier this year but I got impatient with a loan I had from family and used it to pay it down. Maybe a bit silly. I should really think about reprioritising my efund growth before student loan. But at the moment I lose $214 a fortnight through compulsory payments to it, so my reasoning is if I can get the SL gone by using my discretionary money against it, I'll have more money to use overall this time next year - a gamble? Still I'll take the idea on board, I know I need the cushion, just in case. The rational versus the emotional response to finances again! The old battle.

The house is rural and is on land (10 acres) - hence the increased price. I raise my own beef, pork and sheep meat (organically), and strive to do the same with vegetables.

How can you consider money as discretionary income when your efund is not up to your standards? Pick a percentage or amount you want to target towards savings and whatever that's left over can go towards paying down your debts.

Beating yourself up won't do you any good. Pay off your debts at a sustainable rate for yourself, try not to burn yourself out by depriving yourself.

You did not get into debt overnight, how can you expect to get yourself out of it overnight?

How do you keep your side business going?

Do you have separate accounts/income for raising your livestock?

How do you organize your finances in regards to that? Maybe we can help you with that?

Have you taken a good look at your budget to see where there are excess fat to be trimmed?

Welcome!

Thanks for the post. Will mull it over and respond at a later date.

I've already trimmed the fat completely, which includes a small portion for me (beer money!). I am paying myself a small amount first, then all other monies go towards getting the SL off my back. I find it depressing that I'm 35 years old and still beholden to a debt 10 years old.

I have decided to make a regular contribution to my EF - considering I never want to use a CC again or have another personal loan. So, it makes sense to me to save it now for the future. I'm dedicating $50 a fortnight to the EF to get me to the $500 goal (for 2011) and paying only $450 to the SL. Any extras(money) will go in to it too. Also toying with the idea of putting aside money for a vehicle fund.

My smallholding is really only for me and the family. Not a business. Just an extended hobby that provides free meat and vegetables (and fruit - we plkanted a small orhard 4 years ago). I reinvest all money from the farm into the property:fertilizer, seedlings, trees to plant for firewood, etc.

EF: Now at $100.00 (just paid 50 into the account today)
SL: reduced by $450 - waiting for confirmation but this should reduce it to below 20,000 (hurray!)

Both done today.

Personally, such a low emergency fund would terrify me, especially as you have possible emergency farm-related expenses. I would get that efund up to at least $1000 before putting all the money towards your student loans.

True - good point - but having been a small farmer for nearly 6 years I have never needed to use emergency money on the farm. Maybe just luck? The farm has no EF - apart from a small account that we put money into from the occasional boon (hay sales etc). I fix things myself - not afraid of DIY on machinery or farm plumbing. Never use a vet. Keep animals in good health by understocking and feeding well too. The organic side of things helps a lot too I think.

I just put another $20 in to the EF - total now at $120. Totally tapped out for the next fortnight. Time to live frugally and make rabbit curry for dinner.

I checked my balance this morning: broke the 20 grand mark! Offically I owe $19,677.01 on my SL. This doesn't include the regular repayments out of my salary - which is usually taken out at the end of the month, or the 10% on top of my regular contributions. My only debt is growing smaller - other than the mortgage that is (which is also slowly decreasing via regular payments)!

EF:$150 (up from 120)
SL:18,848.61

Making progress.

EF:$175
SL:$18,373.61

Chipping away. Good news is I get paid 3 times in November so I can really get some movement on repaying the SL and continue growing the EF.

I worked an extra shift over the weekend - 6 hours - and used the cash on extending my efund and paying extra off the SL. I'm aiming for $300 for my efund by the end of November plus diverting every buck I've got into paying the SL. At the moment I'm $175 dollars behind where I should be in voluntary repayments on the SL but I needed a bit of me money over the past two weeks. I reckon by the end of this month the balance owing will be under 18 grand - so another thousand knocked off soon I hope!

On a slightly different matter I have been trying to sell off my unnecessary accumulated things via the internet; getting mixed results. I intend on using this extra money for the efund. So far only 20 bucks, but I'll chip it in when I receive it so I don't spend it on anything else that's frivolous.

Still living very cheaply at the moment so I can put up the mortgage repayments when it comes to refixing.

I've been doing some research and reading on the net and found an article about SLs and what to do if you're paying 0% interest like I am. It seems I should just save my payments and collect the interest and then make an end of financial year payment in one go. Duh! I should have thought of that myself.

The only problem is self discipline, keeping the money secure from habit spending. I know I can do this. I've got a seperate account that I can deposit money into over the internet and I can only access it in person to take money out. So I'm stopping my fortnightly payments to the government - except the compulsory payments they take from my pay - and I'm stockpiling my extras into this account, all nice and ready for March next year.

I'll keep updating my progress here as it keeps me honest and motivated. It may not be so fun to watch though!