Graphing Our Loan Repayment Progress

Why graphing your loan repayment progress is important

Graphing out your loan repayment progress can be a great way to maintain motivation during your journey towards financial independence. With this post on Graphing Our Loan Repayment Progress, I will pull back the curtain on our personal finances and trajectory. I hope you enjoy!

This is ‘feedback’

My wife and I were out walking through our neighborhood a few nights ago.  Our daughter was getting tired but we needed to keep her up for about a half hour more.  We often take walks to get quality time and to catch up on each other’s day.  I inevitably started yapping about my plan for the next blog post.  I could almost feel the ‘ugh’ coming on through her silence.  Since I started The Motivated M.D. I have perseverated on its progress…to a fault. 

Surprisingly she responded relatively upbeat!  “Do you want me to blindly be your hype man? Or would you like some feedback?”  Feedback!? I felt like a medical student on my clinical rotations again!  My honest response was that I kind of wanted both.  Is that possible?  Blogging can be onerous and time consuming. Sometimes you really need a ‘hype-man’ to stay motivated.  However, my blog could use an edge.  Any feedback would be helpful and I knew my wife would be honest. 

“You need to write more personal posts.  People want to know that it’s not easy for us either.”  She’s of course correct.  I do find myself quicker to engage in posts if they feel rooted in reality.  It was needed feedback…

Oh…it’s personal

I made a promise that I would try and break up the monotony of my regular ‘personal finance’ posts with an occasional reality check.  I vowed to try and write more personal posts.  That leads us to this particular publication!  I have previously written about 3 Tabs Every Budget Should Have.  Here I argue why one of those tabs should be a ‘student loans’ section.

There are many reasons a graphical representation of your student loans is not only beneficial, but necessary! Here I intend to convince you why this aspect of your budget is critical…by showing you my personal student loan repayment graph.  Let’s dive right in!

Visualize your progress

The first benefit of graphing out your loan repayment progress is to have a visual representation.  Look, as healthcare providers we are analytical individuals.  We like evidence and data!  When you find a way to combine the two…it’s magical. 

What you can quickly see with our graph is a trend.  As time has gone on we have been able to keep a steady downward trajectory.  One really important thing to point out here is that our progress is not exactly linear. 

Life happens

This graph is a reminder that life happens!  You will have setbacks.  We have had many months where we played host to family and stretched our budget.  We had other months where we both moonlit and were able to make huge strides towards paying down our debt.  All of this ebb and flow is natural and expected. 

For example, you can see between November and December of 2019 our total student debt actually increased.  This is because we were in the process of refinancing our student loans.  During that process we were disincentivized to make excess payments while we were transitioning to our new lender.  For that reason we remained stagnant and our interest accumulated.  The opposite of that example is between August and September of 2021. 

In the late summer of 2021 COVID was marching onward.  My wife and I were home-bodies because our first child was due to arrive at any moment.  Because we were living frugally, and the quarterly distribution of our overage reimbursements, we were able to put an extra $20,000 towards our debt!  Capitalizing on these financial opportunities is based on your ability to adhere to your budget and navigate unexpected expenses. 

The benefits of refinancing

Another important aspect of repayment this graph demonstrates is the benefits of refinancing your student loans.  When we started our journey Tackling Our $670,000 Medical Student Debt, both of our loans were federally owned.  We each had a combined interest rate of approximately 7%!  This was a massive barrier to our ability to eliminate debt. 

We previously wrote a post on why we Chose Refinancing over Public Service Loan Forgiveness (PSLF).  If you want to understand our reasoning for choosing this path, I suggest you check out the article above!  However, the take-away is that we ultimately refinanced…twice.  Our first time refinancing our student debt was during the month of November 2019.  When the COVID-19 pandemic happened and a moratorium was placed on federal student debt, interest rates plummeted.  We chose to capitalize and refinanced our student loans for a second time.  This occurred during August 2021.  We now carry an interest rate of approximately 3% on our student loans and remain vigilant for rates to drop further. 

Picking up speed…

Returning to our graph, you can see that November 2019 was a turning point for our ability to successfully paydown debt.  We did accumulate interest during that month, but following our initial refinance, we started to slow interest accumulation, thus allowing us to make headway with our regular payments.  Further, looking to August 2021, our second refinance continues to provide momentum as the downward slope of our debt elimination hastens. 

Refinancing our student loans was a milestone in our ability to eliminate debt fast.  Once you refinance you are no longer eligible for PSLF.  This was honestly a relief as we no longer had to agonize over ‘if we made the right decision.’  The decision was made.  Our path was now clear…live below your means, pay off debt aggressively. 

If you want to know more on refinancing, check out our post on How to Refinance Student Loans. 

Only half of the picture

I wanted to touch on our personal financial situation to put this graph into perspective.  My wife is an emergency medicine attending physician at an academic center.  I too train at that same academic center and will be completing my fellowship in pulmonary and critical care in the summer of 2022.  Currently, the vast majority of our lifestyle is afforded by my wife’s salary.  I make a PGY-6 equivalent salary (basically a resident level salary in the eyes of ACGME).  I moonlight with regularity to help further eliminate debt and supplement our income.  This brings in approximately an extra $20,000-$30,000 a year.  Currently, between an academic attending emergency medicine physician and a fellow level trainee, we bring in a combine income of about $270,000 after taxes.

As of the start of the 2022 academic year (July 1, 2022), I will be staying on faculty at the same academic institution as my wife.  We will both bring in competitive academic salaries that are relatively equivalent.  I suspect that during the second half of 2022 our household take-home pay will be closer to $360,000-$375,000.

Why does this matter?

I utilize these numbers to make a few points.  First, the progress you are seeing above has really been on a single physician salary.  I don’t mean to discredit the contribution my trainee salary has made.  The majority of my salary as well as my moonlighting income goes towards debt.  However, currently our net income is that of the average single physician household.  With that, we have still been able to pay an average of $100,000 towards our student loans annually, and still afford our life style…all on an academic salary none-the-less. 

I am eager to start my attending life.  I am eager to offload a portion of the financial burden my wife has carried over the past few years.  More importantly I am ready to maintain our current lifestyle and supercharge our ability to eliminate debt, all while improving quality of life. 

It’s not all sunshine and rainbows…

I wanted to end on a more personal note.  The truth is that being consistent when it comes to eliminating debt is not easy.  It’s simple…but not easy. 

Understanding when to make excess payments towards debt versus saving that money…or investing…or treating yourself takes a lot of self-control.  Self-control that I thought I wouldn’t have to utilize with such stringency when I was a medical student.  This has led to disagreements and stress in our marriage at times.  The difficulty is that both grievances are usually valid.  We are slightly behind pace for our annual debt elimination goal…but we can’t host a holiday until we purchase a dining room table.  I don’t want to stray too far from our financial plan, but I want to be able to host friends and family without having tailgating chairs in the dining room!

The loan repayment graph (at least for us) has made tangible an often-intangible goal.  If you don’t have a means of visualizing your progress, it can be easy to lose motivation or quit entirely.  For my wife and I, the process of navigating our financial goals has proven to be a teaching point in our marriage.  I can often fall prey to being overly critical of our finances and wanting to sacrifice our enjoyment of life to pay just a few dollars more towards our debt.  This may expedite our debt elimination by a few weeks, but at what cost? 

Take home points

I would not be the man I am today if I hadn’t married a woman who is vibrant, extroverted, and loving enough to get me out of my comfort zone.  In medicine, we are frequently jaded by what we see.  I often forget to stop and ‘smell the roses’ sometimes.  Debt elimination is about the long-game.  Yes, I do want to have my debt paid off by 2024.  Yes, I want to have a 7-figure net worth before I turn 40 too.  Life, however, cannot be perceived as something I can only enjoy once I’m ‘debt free.’  There is a fine balance between frugality and indulgence that must be struck.  This, in my opinion, is the key to rapid debt elimination while still prioritizing what really matters in life.  Faith, family, friends, and time. 

I will do my best to continue to provide updates to our debt elimination process.  I will also try and incorporate our graphical progress with each update.  Thank you for your time!

To my dearest wife…I hope this was personal enough.  As always…

Stay motivated!

The Motivated M.D.

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