How We Paid Off $25,000 in Student Loans in 10 Months!

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How We Paid Off $25,000 in Student Loans in 10 Months!

Our debt free journey began in May of 2014. We were in the middle of building a gigantic chicken coop since I surprised my husband with chicks while he was working one night (I’ll save that for another post!) when I discovered Dave Ramsey. If you are not familiar with Dave Ramsey, he has built an empire on helping people get out of debt and live on a budget. I read his book The Total Money Makeover and was hooked. I then quickly became obsessed with making a budget and paying off debt.

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When we started our debt free journey we had around $45,000 in consumer debt (not including the mortgage). We owed $25,000 on my student loans, $12,600 on a Yukon Denali, and $6600 to the IRS! UGH. I had always kept a written budget but to do a zero-based budget was a little bit more challenging. Basically a zero-based budget consists of assigning every single dollar to something. When I had been doing my budget before, I would write down all the bills each week thenΒ I would spend whatever was left without really thinking about it. I didn’t like debt but I figured we were fine since we had money in savings and were saving for retirement.

Once we decided to become debt-free, I got busy planning out our budget for the next couple of months. I cancelled anything that was on auto-pay and we didn’t need; like magazines and radio subscriptions. I quit buying name brand products and started meal planning. Before we started really paying attention to where our money was going, we were spending around $1,200 a month eating out and on groceries. We cut our grocery budget to $600 a month and $160 for eating out for lunch for two of us. We sold everything we could think of and worked a ton of overtime. At one point someone even told me to quit “acting like you are destitute.” If you get comments like that on your journey, you are doing it right, keep going!

We used a tax refund toward our debt. I also adjusted our tax withholdings by using the IRS withholding calculator so that they would take out less and we wouldn’t get as big of a refund. I also shut off all our retirement contributions during this time.

We paid every extra dollar toward the lowest debt. Once one was paid off we started sending every dollar to the next debt. We knocked out the taxes and Yukon by December 2015. On January 1st, 2016, we started on my student loans. My original loan amount when I graduated in December 2006 was $28,000. So, in 9 years, I had only paid off $3,000 because of interest. I got MAD about this and vowed to do everything possible to get them paid off by the end of the year. I calculated how much interest I was paying daily and it was $4.62. EVERY.SINGLE.DAY. I stayed motivated by calculating how much we were saving daily as we went along. We ended up paying it off on October 28th, 2016.

If we can do this, so can you. You may not be able to do it in the same amount of time but progress is progress. Stay motivated by keeping track of your progress and keeping a written budget. Make sure that you have someone who can be your accountability partner to help you stay on track.

Where are you in your debt-free journey? Let me know in the comments.

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58 comments on “How We Paid Off $25,000 in Student Loans in 10 Months!

  1. Great job, I wish I could be as motivated! Did you use any programs or tools to account for everything?
    I keep getting side tracked. My computer is old and works when it wants so I’m pretty bound to my phone for stuff like that. Writing it down just means it’ll get shuffled to the back of the pile!!
    I’m not a math person, period….

    1. I used an Excel spreadsheet for the last year. It makes it easier to keep track of things and make changes compared to pen and paper. There are programs that you can use on your phone to keep track of your budget, but I didn’t use them.

  2. Great post! My husband read the same book many years ago and it helped him pay off a large amount of consumer debt. He still references the snowball method today. We too have spent the last year focusing on paying off debt and have gotten down to the mortgage, cars and small $8000 student loan (which I plan to tackle next). Having nearly $60,000 in student loans between the two of us took awhile to pay off but we’re getting there.
    I’m anxious to hear about how to budget better and incorporate meal planning into that. Those are my two weak points!

    1. It is an a great program! We are now saving our emergency fund. By the end of the year we should have that done, fund our retirement accounts and pay for a trip to Disney!

      1. Wow, you are doing great! Keep it up and you will get there. You have done the hardest part already, which is getting started! I like to read other people’s stories to keep motivated and looking back at my own progress helps too.

  3. Ashely’s advice really works. She coached me through paying off $11k in student loan/cc debt in less than a year. And like she said, it helps to have an extremely supportive and understanding husband/partner to keep you accountable and moving forward.

    1. The plan is to pay cash for our next vehicle but we haven’t started that fund yet. We are working on our emergency fund first and then will start on that. So, hopefully our cars don’t have any major issues before then. Luckily for me, my husband is a mechanic, so it will have to be major to cause us to buy something before we can pay cash for it.

  4. Hi! We are currently in the exact same position. Tax time is here and I am scared. They are taking $1000 out each month right now and that doesn’t include our medical bills (3,000), student loan (15,000) and car repair bill ($5000). I don’t know where to turn. Help!!

    1. Ann, do you have a written budget? I would suggest starting there, if you haven’t already. Then it’s time to sell everything! Check with your student loans to see if you qualify for any programs to lower the payment for now, while you work on the plan. Have you read any of Dave Ramsey’s books? I would read The Total Money Makeover first, check it out at the library if you have to. It will give you a great head start!

  5. Hi what a great post and congrats on being debt free! I’m trying myself but it’s hard – I would like to know how you did it though? I don’t even earn Β£25k in a year so me trying to pay that kind of money off in 10 months it’s just physically impossible. Unless I win the lottery!

    1. Thank you! It may take you longer but keep going! Everyone is different, the important thing is to start and just keep going!

  6. Great article! We are also working on our debt free journey. We still have those pesky student loan payments but have gotten rid of our second mortgage and all credit card debt. Now when I look at people living a lavish lifestyle, I think to myself “how much debt do they have.” πŸ™‚

  7. Great article! We are working on our debt as well. We still have student loans, but have paid of the second mortgage and all credit card debt. Now when I see people living lavish, instead of being envious I think, “I wonder how much debt they have.”

  8. Great planning. I wish I could plan it the way you guys did. My wife is a bit of spender and just in a few months I will have to take up a huge loan. I will keep your planning style to understand how to decrease my debt quickly.

  9. I’m trying to pay off my car loan and my credit cards. I honestly regret spending so much money on my credit cards on things I did not need. Total mistake! I have cut off all auto-payments and it has helped a lot so far.

  10. So impressive! My husband and I are committed to getting our big payments done in the next 10 years. We are over 75% done with paying our car off. My husband has student loans, which are a big part of our budget, but since he’s a teacher, he qualifies for forgiveness after 10 years (yes!) Otherwise, we live relatively debt free–no credit cards, nothing! We don’t use auto-payments or anything like that to prevent problems.

  11. Wow congratulations! My loan amount is WAY higher and intimidating but I may have to start somewhere. Definitely crazy how much is spent without knowing each month!

  12. Congratulations!! Getting debt off the balance sheet is so key to so many important things in life (including how you feel) πŸ™‚ Nice work, and congrats! Cheers, Mary Jane

  13. Congratulations, it’s a good point that lots of people spend so much money on non-necessary things without even thinking about it. I imagine you both had steady, good jobs though?

  14. Thanks so much for sharing not only what you did but how you did it! πŸ™‚ It’s so inspiring! πŸ™‚ We really need to set up a budget as we are looking at buying a house, and so the more money we have saved the better. I’m not shopping for 6 months which helps but it would be good to budget and be more consistent πŸ™‚

    Hope you are having a great week πŸ™‚

    Away From The Blue Blog

  15. Wow that is a HUGE accomplishment. Well done you! We’re trying to keep a balance – pay off debt as much as we can while still putting aside some money for retirement. And we take advantage of 0% interest offers the bank sometimes have too.

  16. I love this! I am a student right now trying to save my first 1,000 for an emergency fund and knock out the last $800 of credit card debt before signing up for classes again. I love your determination on your “paying off” journey. Being mad creates a fire in us all haha, no debt stands a chance against a determined individual.

  17. So grateful for this post! I have so much student debt to clear and feel like I’m making no progress at all. I’ve heard a bit about these zero-based budgets but not really read into them so thanks for the explanation – it might be something I try from next payday!

    Dani x

  18. My anger towards Sallie Mae/Navient is what propelled my journey to being debt free also. I was able to use pretty much the same technique that you described to pay off 85K in student loan debt in 6 years. I have been completely debt free since 2015. My husband became inspired and he finally paid off his last piece of debt in 2016. I always say we are the richest poor people I know πŸ™‚ its honestly a great way to live! I have so much freedom knowing that I never have to worry about another bill. Thank you for sharing your journey and a HUGE CONGRATS!!!!!!!!!!!!!!!!!!!!!!

  19. WOOT! This is so amazing!! You have inspired me for sure. This is on my list of things to accomplish next year.

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