How I Paid Off $20,000 of Student Loans and Car Debt in 18 Months

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  • My wife and I had about $20,000 in student loans and car debt when we got married.
  • We decided to use the debt snowball method to pay it all off but realized we needed to earn more.
  • We get promotions and share hustles, and celebrate every milestone.

$20,000. That’s the amount of non-mortgage debt my wife and I took into our marriage before we started getting serious about money. 15% of our take-home pay goes to student loans and car payments, and we only pay the bare minimum. We feel like we’re stuck in debt until the terms of the loans are over, and by that time we might have a new loan to replace it with because that’s just what people do.

My wife, at the time, was the more financially literate half of our relationship because of a decent education from her family on the basics of money management. I am a little more naive about the whole money thing and am happy to let my wife control the financial direction of our new marriage.

Two great moments happened at the same time to change this. My wife has encouraged me to learn more about money so that we can be equally responsible for our family’s financial decisions, and the school where I teach has asked me to teach a financial math class next school year. .

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Both were signs that I needed to get on board and learn about finances, which I did through many podcasts and books. The end result is a burning fire to get us out of debt and onto a financial freedom journey that includes the potential for early retirement.

We settled on a debt repayment strategy

Our debt is very straightforward and there are many positives to develop. No credit card debt, we didn’t overbuy our house, and when we bought new cars, we bought some of the cheapest new cars on the market (a Corolla and a Civic) . Our student loan debt is a collective $12,000 and the rest is car debt.

Seeing the snowball methods of debt and debt overflows, we chose the snowball method to take advantage of early wins for motivation. This means we attack our smallest debt first and then add the biggest one, moving the payment from the previous debt to the next one as it is paid off.

Our refrigerator is adorned with a new poster showing each of our debts (three student loans and two cars), the total amount of each, and little fundraising thermometers to show our progress towards paying each.

The chart makes it a fun experience and keeps us going when progress feels small or insignificant each month. Walking along the chart every day helped fuel the fire to stick to our plan and not stop until it was all gone.

We cut costs as much as possible

Personal finance is very simple at its core. Make more than you spend, and put that extra money (“the gap”) to improve your net worth.

In this case, paying off our debt is the best way to improve our net worth. The problem we have is that there is no gap when we start. We’ve inflated our lifestyles to the point where we’re drawing our entire paycheck each month, with little money going into retirement accounts and no savings.

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We cut expenses as much as we could, but there wasn’t much else we could get rid of at the time. We need more income to improve our debt repayment gap aggressively.

We found ways to make more money

Over the next 18 months, my wife and I supplemented our income through eight different sources. This includes increasing our income at our full-time jobs through professional development and repositioning, as well as taking on part-time jobs, contract work, and starting our own. businesses.

As a teacher who doesn’t have summers and a therapist who sets her own schedule, one thing we have going for us is the time and flexibility to create these new streams of income and keep them going. short time. My wife works in a vineyard and took a part-time social work position at the school. I wrote the curriculum for my school district and started teaching math at night.

My favorite side hustle is officiating girls’ lacrosse. While the one in the center of the field with the whistle may not appeal to you, it is a way that I can make a good hourly rate of about $1 per minute, and it has exercise.

We recognize milestones and celebrate them

In the beginning, it was easy. The first two student loans were only a hundred dollars each, so they fell off quickly. After that, progress was slow. The snowball of money we put into debt grew, but it still made little each month, which was discouraging at times.

We’ve found that when we break down big debts into smaller milestones that we can celebrate, it allows us to keep the small, quick wins mentality alive.

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Celebration often involves a little attention to ourselves. Nothing can stop our efforts, but something to reward ourselves for our hard work and perseverance. It can be as simple as a sweet treat or takeout instead of cooking.

We are smart about future debt

When we made the last payment 18 months after we started, it was decided that future debt would be avoided if possible.

We continue to use credit cards, but they are always paid in full each month to take advantage of the rewards.

We immediately started raising an emergency fund to cover events that would force us back into debt.

Instead of increasing our budget with all the freed-up cash from paying off the loan, we continued to pay off the car ourselves and kept it in a high-yield savings account. This allows us to pay for a used car in 2021 without having to take out a long-term car loan.

We also use high-yield savings accounts for things like Christmas gifts, annual HOA expenses, and vacations. Whatever we can reasonably plan now, we will do.


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