How did I get in so much dept?
The journey to becoming debt-free
How did we pay them off so quickly??
We made a plan- Having a plan is always the first step that you need to make in all financial situations. Before we got married, both of us understood the plan. We knew that there would be sacrifices, and we knew it wouldn’t be easy. Every month we would re-evaluate the plan to see what we had to do to make it work. We had our moments where the plan seemed difficult and it seemed like we would never get through it, but we stuck to it no matter what.
Pay off the loans with the highest interest first- If you have any kind of debt, you understand that your money is mostly going towards the interest, not principle. Some of my loans had over 11% interest rates. It was important to get those loans out of the way first, then we made our way down to the lower interest rate loans.
Do NOT take on any extra debt- Whatever you do, do NOT create any extra debt for yourself when you already have so much. It’s very tempting when you get your first real job out of college to want nice, new, shiny things. New clothes, new purses, new cars, new furniture…the problem here is that most likely you can’t afford it. Which means you will be using a credit or taking out more loans. Think about it… is this really a good way to start out your adult life? Owing more than you have, when you are already in debt up to your elbows? Wait a few years. Once your student loans are paid off you won’t believe the amount of extra money you will have.
Live off of half your income- We put half of everything that we made towards the loans. You might be thinking that we were lucky because we had 2 incomes, well each of us had abnormally low salaries. We still made it work.
NEVER spend more than you have- Credit cards can be a great financial tool, but when used incorrectly they can get you into trouble. Like I said before, do not take on any extra debt!
Put all extra money towards your debt- After our wedding, we put all of the money that we got as gifts towards the loans. When we got our tax returns, we would put all the tax money towards the loans. And when we sold my husband’s condo that he owned before we got married, all the money went towards the loans (this is what really helped us pay them off so fast).