This past year, Colby and I became serious about becoming debt free. I am happy to say that we are half way to that goal. Thankfully our debt isn’t huge and only consists of student loans but regardless it is debt and we wanted it gone! Recently, we paid off the remainder of my student loans in full. Our goal was to have my student loans paid off by March 2016 and I am happy to report we made that goal. In total, this past year (about 14 months) we paid off 14k in student loans….and that is only my loans. This amount doesn’t include our regular payments towards Colby’s student loans.
Every month we have been paying the minimum amount due on Colby’s loans and paying extra on mine. We also utilized money from our tax refund and a work bonus in order to pay off my loans. If we would have just been paying the minimum the entire time, these loans would hang over our head until 2021 (5 more years!).
Paying off loans is a funny thing though. Although we are ecstatic to no longer have these loans it doesn’t come without other emotions as well. I found a quote that summed it up perfectly the other day. It said “I have never been so happy and so heartbroken at spending that amount of money on something.” Paying off those loans is such a happy and rewarding feeling but at the same time giving someone else $14,000 of your money hurts a little and you definitely feel it.
Now that we have one set of loans paid off, we will be moving forward in tackling Colby’s student loans. Our goal is to have them paid off by the same time next year. In March of 2017 we hope to be officially 100% debt free.
One thing I noticed this past year is just how many people are aspiring towards a goal of becoming debt free. While I think this is amazing, I have found that many seem to think there is only one right way to do this and that there is only one path that everyone must take. If you do something that others feel you shouldn’t while in debt, you are doing it wrong. I disagree. In my personal opinion, I believe there is no right way to get out of debt and also it is important to remember that not every debt free journey is the same.
For some, it may take years of dealing with debt before they decide to do something about. One family might try to get out of debt, fail, and not try again for a couple years. Some families are working with one income and others two. There could be credit card debt, medical debt, student loan debt, etc. The debt free journey might include a family of four, a newly married couple, or those of retiring age. Although everyone is aspiring to become debt free, not one person is going to have an identical situation to someone else, which means every debt free journey is going to be different. What works for one family may not work for another. While you might feel that eating out shouldn’t happen when getting out a debt, another family might need that one night out to save their sanity. Completely depriving yourself of things while in debt is only going to make you bitter and resentful towards your goal. There has to be some wiggle room, even if it is only $20.
10 Things About Our Debt Free Journey
- We paid off 14k on mainly one income. During this time, I did not work a full time job outside of the home. I work from the home and bring in an income, which we used for extra items as well as putting towards debt. The first thing most people recommend when getting out of debt is to get a second job or have both partners working. For us, only having 1 of us work outside of the home was OK.
- We still went on vacation. Many people advise stopping vacations when getting out of debt. I personally think going on vacation is OK while in debt if it isn’t a lavish vacation and if it is budgeted for and paid for in cash. We went to both Ocean City, MD and Washington DC while in debt, but paid for everything in cash.
- We have pets. Pets are expensive and most people say don’t get a pet while in debt or even to get rid of your pets while in debt. For us, not only did we already have 2 cats in our home but we brought a dog into the mix. Getting a dog is something we have talked about since we first got married and something we knew would bring us great joy. In adding a dog to the mix, we added new expenses. Puppy wellness visits, dog food, etc. To us, adding an addition to our family was important to us and well worth any extra costs.
- We moved. Moving is expensive and most people tend to stay in the same place while in debt or move to the cheapest place possible. For us, we wanted more space and a yard. This decision was something we had been talking about for the past 3 years and when we found the opportunity to do so, we did. In moving, we actually lowered most of our living costs. Our rent is now cheaper, our utilities are lower, and we are happier in this home than we were in our apartment. Sometimes your mental health needs to come before debt. For us, we weren’t as happy in our apartment as we are in our house and our pets are happier as well.
- We had 2 cars. Many families choose to sell their vehicles if they have more than one. For us, having 2 cars didn’t cost much. We did not have car payments, as both cars had been paid in cash. Our only expense was gas and general car maintenance. If we had car payments, we would have sold one or both and bought cars in cash.
- Pocket Money. While most people do have some sort of pocket money while in debt, how much seems to vary. Colby and I each get $100 per month ($200 total) to do with as we please. I have seen other couples have as little as $25 per month and while I applaud them for being so devoted that is just not something we were willing to do.
- Tax refunds. Everyone talks about tax refunds and what they are going to do with them. What Colby and I did with our refund is apply it towards debt….we knew that whatever amount we received, no matter how big or little, that it would go towards paying off loans.
- Work Bonus. The same goes for Colby’s work bonus. Colby’s company offers a pretty large work bonus and we knew that that amount would also be going towards loans. There are a ton of things we would have loved to do with both the refund and bonus but we are trying to get out of debt and that is more important than any want.
- Why Do I Want That. When you are working on getting out of debt and you limit yourself to a certain amount of spending money, you make conscious decisions when it comes to a purchase. I can’t recall how many times I have had a cart full of items and then stopped to ask myself, why do I want this? Do I really need this? What am I going to do with this? If I can’t answer those questions, I probably don’t really want it but it was more of an impulse to just toss in some cute item that I wanted at the moment. If I can’t see myself wanting it a week from now, it goes back on the shelf.
- Relationships: Your relationships are tested when you are getting out of debt. This could be with friends, family, or your spouse. For us, most of our friends are in the same boat as us and have student loans or simply ask us about our journey and our family is supportive of our journey but not everyone has that. Some friends and family get angry when you have to say no to stuff, that can really test your relationships. Same goes for your spouse, it can be hard to get on the same page or to say no we can’t do that. For us, I have found that getting out of debt has actually brought us closer. We talk about money and our financial goals together. We work together to come up with a plan and a time line for these goals. We are constantly talking about our pay off date or what time we can pay off a certain amount of money and we celebrate together when we make a large payment. Paying off debt together has made us work together as a team and learn to lean on one another while working towards a goal, that at times, can seem overwhelming and far away.
There are a million and one things we could have done differently but at the end of the day we are happy with our progress and where we are at. No debt free journey is the same and while we could get their faster by doing x,y,z we are doing what works for us. The end result is all that matters. In my opinion, as long as someone is working towards their goal, in this case, paying off debt, nothing else matters. While someone might do things differently than us that doesn’t make their journey better or worse than ours. It is simply that, YOUR debt free journey. Any debt free journey, in my opinion, is a good one. Working towards a better financial future for yourself and your family is a great goal to have, a hard goal at times, but so worth it in the end.
I can not even begin to say how happy I am that we have one of our student loans paid off and although we have another year to go, we now know what we are up against and what we should do differently. We have a plan in place for Colby’s loans and a time line to reach them. Here’s to the second half of our debt free journey!