Our Student Loan Debt Pay Off Journey

A few months after I started blogging, my wife, who was my girlfriend at the time, and I decided to share our journey paying off her student loan debt.

When she graduated in May 2011, she had over $80,000 of student loan debt.

It was scary, but together we decided we would destroy the student loan debt as fast as possible.

Student Loan Debt Pay Off Updates

Unfortunately, we didn’t start publishing monthly student loan debt updates until December 2012. At that time she had $60,266 of student loan debt remaining.

However, from December 2012 until we paid the student loan debt off in full, we shared exactly how much debt we paid off each month.

We also shared what was going on in our lives that affected how much we could pay and how we were going about paying off the debt.

The journey was not a straight path. There were good speed bumps and bad speed bumps that delayed our debt pay off date. In the end, we’re glad we took the approach we did to paying off the student loan debt.

Below is a listing of all of the student loan debt update posts if you’d like to read about our journey. I’ve listed the month, the total balance remaining and the debt paid off since the prior update.

It is important to note that we only kept track of the principal reduction of the student loans. We did not include the amount of interest we paid each month in our payments.

The Keys To Paying Off Our Debt

As you can tell from the updates, it took us just shy of 3 years to pay off the student loan debt. Initially, we thought it’d take us much longer. However, we were proactive and worked hard to pay our debt off ahead of schedule.

The two main ways we paid the debt off ahead of schedule were keeping expenses low and earning extra income.

Keeping Expenses Low

It was easy for us to keep our expenses low as we had both recently graduated from college. We lived as simply as possible and rarely spent on many of the luxuries that many college graduates indulge in after graduating.

We rarely ate out. My wife and I didn’t decorate our house much. We didn’t buy new furniture. We simply got by with what we had or bought inexpensive items on craigslist.

Earning Extra Income

Earning extra income was the major contributor to paying off the debt so quickly.

I started blogging in 2012 and within a year I was earning thousands of dollars a month from my blogging work. This money was set aside for paying off the student loan debt after accounting for the taxes.

If you’re struggling with paying off debt, please use our story for inspiration to help you achieve your debt goals. Start working to cut your expenses back. Start figuring out ways to earn extra income. Your options are endless if you just put your mind to it.

Start Your Own Blog

You don’t have to do what we did to pay off our debt, but if you would like to start a blog, I have a couple major tips you should follow.

First, blogging isn’t easy. It takes a lot of work and that work probably won’t pay off right away. It took months before I earned my first dollar from my blog. That said, blogging and freelancing online is now my full time business.

Second, if you’re going to start a blog, do yourself a favor and start out right. I had tried to start blogs before Money Manifesto and they all failed. If you want to be taken seriously, you need to have a self-hosted WordPress blog.

Having a self-hosted WordPress blog means you have a real website address, not something like BlogName.FreeService.com. Instead, you just simply have BlogName.com. Being self-hosted is also a benefit because you’ll have total control over your website.

If you want to start a self-hosted WordPress blog, I suggest using SiteGround for hosting. They have great prices and amazing customer service.

While many bigger bloggers recommend BlueHost, their customer service and product have seriously gone downhill over the last few years.

The big bloggers continue to recommend BlueHost because of the name recognition and the high affiliate payouts the bloggers receive.

Instead of going with a company that used to be good, go with a company that is still good even if it does cost just a bit more. That’s why I recommend SiteGround.

More Details On How We Paid Off Our Debt

If you want more details about exactly how we paid off our student loan debt and our journey, check out the summary post – How We Paid Off $80,000 Of Student Loan Debt In Under 3 Years.

Are you working on paying off debt? What challenges have come up during your journey? What has helped pay off your debt faster than anticipated? Share your experiences in the comments below!

Should We Treat Ourselves While Destroying Our Student Loan Debt?

Recently I shared how intensely I think people should destroy their debt depending on what type of debt they have and the interest rate of the debt.

We’re pretty lucky that we didn’t have any of the worst types of debt, which include payday loans and credit cards.

However, as you may be aware of, we do have a mortgage and once had a lot of student loan debt left that we were working on paying off.

How serious are we about our different types of debt?

We decided to pay off our student loan debt as fast as possible. In fact, we paid off over $80,000 of student loan debt in less than three years.

That said, we have no intention to pay our mortgages off any faster than their 30 year terms.

While we were paying off our debt, we were trying to decide whether or not we should treat ourselves with a couple of larger purchases before the student loans were gone.

Here’s what we were considering.

What Are We Considering Buying

At the time, we were considering buying a roughly $500 laptop and a much larger purchase of $4,000 fencing in our backyard.

The fence would have been nice so we could let our dog, Daphne, roam around without going on a leash. This also would have freed up a tiny bit of our time since we wouldn’t have to physically take her out multiple times a day.

Why We Didn’t Think It Is A Good Idea To Buy

Tori’s student loan debt hung over both of our heads because, while it was necessary to pay her way through college, she ended up with a crazy amount of debt. We were constantly reminded of the debt every time we made a payment.

By making either of these large purchases we would have been delaying our student loan debt payoff. The loans would hang over our heads that much longer.

We were also against taking out debt for purchases such as computers or a fence. We felt these should be cash purchases and I think 99% of the people reading this will agree.

While we would technically have paid cash for these items, to us it would feel like we’re taking out a loan to purchase either the computer or the fence. What was our logic?

By purchasing these large items while still owing money on the student loans we would have essentially been buying something else instead of paying off and lowering our debt. So, instead of having less debt we would have had more stuff.

In our minds, that is almost as bad as taking out more debt to buy more stuff.

Why We Might Have Made The Purchases

Paying off over $80,000 of student loan debt is more of a marathon than a sprint. By balancing debt pay off with our other goals, it could be argued that we’d end up paying the debt off in a more controlled way.

By planning purchases like a laptop and a fence, we would have been less likely to splurge on unplanned purchases along the way.

That said, we did already have a mini fun budget each month so we already had the little splurges baked into our plan. If we budgeted to buy a laptop or fence we would have been increasing this mini fun budget by quite a bit.

What Did We End Up Doing?

We ended up purchasing the laptop a few months before the student loan debt was paid off. It replaced an aging machine that had slowed down significantly over the years. However, we paid off our student loan debt just four months later.

Ultimately, we decided against purchasing the fence. Even after the student loan debt was paid off, we still didn’t install a fence. We ended up selling that house, so we’re glad we held off as fences rarely add any money to the selling price of a home.

We are, however, installing a fence at our new home as I write this.

In the end, we were happy we bought the laptop. It made our lives much less frustrating and it only delayed the student loan debt pay off by a couple weeks at most.

Do you think we made the right decision or do you think we should have waited to buy the laptop until the loans were paid off?

How Intensely Should You Destroy Your Debt?

Have you read the stories about crazy people who paid off their debt as quickly as possible but suffered majorly in order to do so?

I’ve come across some insane stories of people who have cashed out their 401(k)s and paid huge penalties to pay off low interest rate student loan debt.

That’s pretty extreme. I personally wouldn’t recommend it.

It does raise an interesting question though.

Where do you draw the line between extreme debt payoff at all costs and a healthy dose of pain you need to suffer due to the reality that you’re in debt?

How Crazy Fast You Must Attack Your Debt

The first major factor in determining how crazy fast you need to attack your debt is the interest rate and type of debt you have.

If you have a payday loan with insane interest rates, you need to destroy your debt like it is your mortal enemy. There are no excuses. You must realize that these types of debts can destroy your life in no time flat and lead you down the path of financial ruin.

Do whatever you can to get rid of these loans as fast as possible.

Credit cards are another type of debt that you must take seriously as they normally carry a high interest rate. You’d want to make some fairly extreme financial moves to get rid of the high interest rate credit card debt, but there are a few things I’d probably avoid doing.

For instance, I wouldn’t pull money out of my 401(k) to get rid of this debt. You likely lived above your means in order to get into credit card debt, so it is time to pay the price now and live a not so plush life until it is gone.

Where Debt Destruction Gets A Bit Fuzzier

Things get a bit fuzzier after payday loans and credit cards. How intensely you should destroy your debt varies greatly depending on your personal situation and your intolerance for debt.

There are some types of debt, such as low fixed interest rate car loans, student loans and mortgages that I probably wouldn’t pay off quickly. These types of debt should all be carefully considered before you incur them as you must only incur them within reason.

For instance, I’d only off pay car loans slowly if you’re using arbitrage to earn extra interest with the cash you would have used to pay for the car by keeping it in a high interest bank account. After all, I don’t advise buying cars you couldn’t pay for in cash.

Student loans are unfortunately another type of evil debt that many people face. If your interest rates are fixed at or below 4% I wouldn’t be in a rush to pay them off. In fact, I’d probably pay them off as slowly as possible, but that’s just me.

If your student loan interest rates are 6% or higher I’d probably try to pay them off more quickly than the normal term of the loan agreement. You don’t have to go all or nothing toward these types of debt unless the interest rates or total debt owed are insane.

The Largest Debt You’ll Likely Ever Incur

Mortgages are extremely common when buying a house as very few people can afford to pay cash.

As long as you’ve bought a house that was well within what you can afford and your fixed interest rate is 5% or lower, I wouldn’t be attacking your mortgage debt unless it keeps you up at a night.

Just make sure that you’re not paying PMI, which normally requires putting down 20% when you first buy your house.

However, if you aren’t going to invest the money that you could use to pay down your mortgage faster, then you may want to consider paying down the debt.

Paying down debt increases your net worth and reduces your the amount you owe to others, while spending the extra money frivolously won’t further your financial goals.

Make sure you’re always working toward bettering yourself financially.

What is your take on how intensely people should destroy debt? Does it matter what type of debt it is?

You Paid Off Your Debt… What’s Next?

Are you ready to pay off your debt but have no clue where to start? Read the first post in my series about paying off your debt, then read through this series until you get to this post, our twelfth in the series.

It’s a great feeling to finally be rid of your evil debt.

Don’t forget that feeling for one second.

You worked long and hard to get to this point. Cherish it.

Before you celebrate too much, there’s one thing you have to remember.

You’re not out of the water yet.

There is still a ton of work left to do after you’ve completed paying off the debts you wanted to eliminate.

You Made Big Changes – Don’t Let Them Be Temporary

You likely had to make some big changes to get to the end of your debt pay off journey. Some of them were extreme but temporary measures. However, I’d venture that a majority of the changes you made were good permanent lifestyle adjustments.

If you immediately go back to how things were before you started your debt pay off journey, you’re just going to end up back where you started in a few months or years.

Wouldn’t it be a shame if you worked so hard to pay off all of that debt, just to end up in the same exact position again? I know I would be devastated if that ever happened to me.

You need to keep the momentum moving in the right direction after you’ve paid your debts off.

You Can Add Some Things Back

It’s okay to add some things back into your monthly spending that you had cut back on, but examine every item with extreme scrutiny.

Does this spending make my life better? Do I value what I’d be spending the money on highly? Does spending this money help me reach my long-term goals?

If the answers to these questions are yes, you may be able to responsibly add some spending back.

You might notice that you now really enjoy dining out every once in a while. However, if you make it a habit and dining out turns into eating out multiple times per week, it won’t feel as special any more.

I’m all for enjoying life. Just don’t fall back into bad habits. They could become a permanent part of your lifestyle again.

If you had cut back on your shopping for entertainment budget, do you really miss buying things that likely ended up hanging in the closet forever after only being worn a couple of times?

I’m guessing once you broke the habit, all of the window shopping wasn’t really something you missed anymore. Make sure you still evaluate each purchase to see if you really need it or if it is a want.

Have a process in place to make sure you don’t return to those credit card swiping days that led to maxed out credit cards you couldn’t pay off.

Don’t Quit Earning Extra Income

Earning extra income was a key to our debt pay off success and we didn’t quit simply because our debt is gone.

Your extra income may lead to even bigger opportunities than you main income source one day. My blogging side hustle became my full time career.

Of course, if you just got a part time job delivering pizzas, you might want to consider dropping that if you don’t enjoy it. However, if you started a side business or have found a side gig you’re passionate about, don’t give it up.

Now that your most painful debts are gone, you have more options than ever.

Paying Off Debt Wasn’t A Goal

As my friend Joe Saul-Sehy from Stacking Benjamins would say, paying off debt is not a goal. That statement makes a ton of sense once you really think about it.

Paying off debt is a milestone in your life, but it isn’t the ultimate destination. Why is this important? You should still be working toward your actual financial goals now more than ever.

The money you once dedicated to destroying your debt is no longer obligated to paying other people back for your past purchases. It’s now available for you to move further along with your life goals.

Unfortunately, some of these life goals, like retirement, are so monstrous that we don’t even see them as goals. Instead we see them as insurmountable challenges.

Channel Your Debt Money Into Bigger Goals

Instead of increasing your spending or quitting your side gigs, channel your debt repayment money into goals that matter to you.

Is your emergency fund in good shape? Are your retirement accounts where they should be? If the answer is yes, good for you. 

Just make sure all aspects of your financial life other than debt are in good shape before you start increasing your spending again. Getting out of debt is just step one on a long journey to financial independence.

You’ve worked hard to change your financial lifestyle. This is just the beginning. Continue to live responsibly. If you do, money worries may soon be a thing of the past.

Focus on the big goals. Don’t forget about your retirement. Keep pushing yourself down the path to a better financial future.

What do you plan to do with your debt money once your debt is paid off? I’d love to hear your plans in the comments below.

Want To Kill Your Debt? Big Changes Lead To Massive Pay Offs

Are you ready to pay off your debt but have no clue where to start? Read the first post in my series about paying off your debt, then read through this series until you get to this post, our eleventh in the series.

I bet you’re excited that you’ve been able to make a plan of which loan to pay off first.

It’s even more exciting when you start to see the progress you’ve made from changing your mindset and making some small changes in  your financial life.

I have some even better news, though.

Now it’s time to start making some big changes that can completely transform your debt pay off plan and speed up the process immensely.

Big Changes Will Have The Largest Impact On Your Plan

Small changes are a great way to start shifting your mindset. Those changes will get you excited as momentum grows in your debt pay off journey.

Unfortunately, there are only so many small changes you can make before you run out of ways to save a few bucks here and there. That’s when it’s time to bring in the big changes.

Many people resist these big changes, but the magnitude of how they can change your debt pay off plan can be huge. Don’t immediately dismiss these ideas as crazy.

Many people have made these changes and have made amazing progress because they were open minded enough to embrace big change.

Sell Your New Fancy Car

Chances are you have a newer, fancy car. You probably have a car loan to go with it. Yuck, that’s more debt you have to pay off. Want to know a quick way to get rid of that debt and get further ahead in your debt pay off journey?

Sell the car and pay off the loan. Am I insane? Not at all. A car is for transportation. It should not be a status symbol. Yes, you may need a reliable car to get to work and run errands around town. I totally agree with you.

However, you can easily find a car that will meet those needs for $5,000 to $10,000, rather than the $30,000+ that some of the fancier cars and SUVs cost today.

What about all the money you’ll lose by selling your brand new car? It’s a fact of life, but it is a sunk cost. Sunk costs are decisions you made in the past that you can’t change. You can’t make decisions based sunk costs.

You’ll never get that money back whether you sell the car today or 3 years from now. It’s gone. The only difference is you’ll lose even more money as the car gets older.

With $5,000 to $10,000 cars, you won’t lose anywhere near as much money to depreciation each year. Just think how nice it’d be to have a much smaller car loan, or even no car loan at all.

Is all of that extra debt worth your fancy ride? You might even save money on your car insurance due to the lower value of your new to you $5,000 to $10,000 car.

Downsize Your House

Housing is normally the largest category in any budget. If that’s the case in your budget, then it’s also the largest opportunity to make a dent in your debt pay off.

Americans have grown accustomed to huge homes with a ton of rooms that they rarely use for anything other than storage or allowing someone to sleep at your house once a year. Why pay for all of that extra space you never use?

Just like with your car, you can downsize your home, too. Whether you simply move to a smaller, cheaper home when your lease runs out or you decide to sell your home to move to a more appropriate dwelling, this is possibly one of the biggest wins you can ever score.

Whatever you do, make sure that you think this through for a long time. If you just end up upgrading again shortly after you downsize, you’ll have wasted a ton of money moving and in real estate fees if you owned your homes.

Move To A Different Area

Want to save even more money on housing and potentially everything else in your budget? Consider moving from a high cost of living area to a low cost of living area. Where you live has a huge effect on how much money you spend every month.

I personally moved from the rat race driven metro area of Washington, DC to the Florida panhandle. It is one of the best decisions I ever made.

I was lucky enough to keep a similar salary and almost all of my living expenses cost less in Florida. Plus, there’s no income tax. It was a huge win for us and it saved us thousands of dollars.

Get A Job That Pays You What You Deserve

Your income from your job is one of the biggest limiting factors in your debt pay off plan.

Due to the massive constraint income places on your plan, you should look to optimize your income as much as possible. If you’re being underpaid for your skill level, now is the time to see what you can do to raise your income.

You can ask for a raise if you’ve shown you deserve one. If that doesn’t work, you can always look for a new job that pays you in line with your skills and abilities.

Just be careful not to burn any bridges in the process. Your current income is a lot more than you’d get if you pressed the wrong button and got yourself fired.

Big Changes Aren’t Easy

I’m not suggesting that any of the above changes are easy. They aren’t. They shouldn’t be. Just keep an open mind and seriously consider them.

These actions can save or earn you thousands of dollars a year that you can use toward your debt pay off plan. Once your debt is gone, it can kick start your savings and retirement, too.

Don’t simply dismiss these ideas without giving them serious thought. The biggest changes offer the biggest rewards.

Once you’ve mastered this step, there’s just one more step to go. That step takes place after you paid off your debt. Read about it here.

Did you make any huge changes in your life in order to pay off your debt faster? We certainly did and it helped us pay our debt off faster than we could have ever imagined. Let us know what big changes you made in the comments below.