This is My Story

I consider myself the luckiest man in the world. I have the most loving, caring, sweet, kind, beautiful person in the world as my wife. My two fur-babies are the most adorable dogs the world has ever seen. I have a fantastic, encouraging family who are there for every need. Life is good. The numbers in this article are unimportant. It is the meaning and steps behind them that matters. Coming up with a game plan to kick your debt to the curb! Everyone’s story and situation is different. This is my story.

Seven years ago, as I was on the verge of receiving my Master’s Degree in Accounting from Siena, a private college in Upstate NY, I began to realize the enormity of the debt challenge ahead of me. When all was said and done, before me stood $110,000 of Student Loan debt. Insanity. Three years of undergrad and a year of graduate school. $27,500 a year. I even lived at home throughout, saving $10,000 a year with no room and board! It is a shock to any recent graduate and something no one really talks to you about beforehand.

Time For a Plan

The worst part of my Student Loan debt was the high interest rates attached to the loans, between 6.125% and 8.125%. These were high rates at the time and still are today. I knew that I needed to make priority the paying off of my student loans so it was time to put my degrees in accounting to use and come up with a plan to kick-start my debt payoff!

After creating an elaborate debt schedule showing my entire loan portfolio all on one page, it was clear what needed to happen: I needed to attack my highest interest percentage loans with large extra monthly payments. Paying over $1,000 a month more than my minimum payment had my payoff date for the first half of my loan balance in late 2017. Starting my payments in January 2014, and having been at my new job for only a month and making $46,000 a year, this seemed like a lifetime away but I knew the rest of my life was counting on this schedule.

After my highest interest loans were done, I thought it would make the most sense to take the large payment I was making on the higher interest loans and start paying that balance on the “smaller” (still quite large) interest student loan balances. This plan put my loan payoff date in January 2020. Not quite before my end of the decade goal, but close enough to get started.

And so my plan was finalized. In total, $1,823.31 per month. $1,500 to the loan that was consolidated at 8.125% interest with the additional $323.31 minimum payment being made on the loans with 6.125% interest.

Debt Payoff in Action

Coming up with a plan was the easy part. It’s easy to say “I am going to make a significant extra payment on my loans for the next 6 years to have them paid off this decade.” It is a lot harder to consistently follow the plan. There were many times I thought “I could pay for a trip for my wife and I if I don’t pay the extra on my loans.” Luckily, I had the full backing and support of my amazing wife. I do, and always will, give her all of the credit in encouraging me to achieve my successes. Heck, it was her idea to start this blog!

Every month became a balancing act. Looking at my bank account carefully each month, making sure the balance never dropped too low. $500, I thought, would be my base to make sure if anything went wrong, I would have some sort of safety net. There were many months during my journey that I was close to that safety net but that wasn’t going to stop me!

Things didn’t go 100% according to plan to start off. Within 6 months of starting my full time position, my car was in a ditch and totaled. Getting a newer car was great, but was not part of the original plan. Adding another $20,500 loan on top of my significant student loan balance was not ideal as it added an additional $318.58 to my already high payments. Now I was paying over $2,100 a month on loan payments! There wasn’t a whole lot left for anything else!

Different Actions, Better Results?

Looking back, I definitely could have gone for a cheaper car or purchased a used car for cash on a website like craigslist for the amount of the down payment I made and not had a loan. I would advise anyone in need of a car to go that route instead of overpaying for a car at a dealership.

Though I could have made a different decision on my car, there were many decisions that I did make that kept me ahead. I decided that instead of renting a place of my own, I would live with my parents in order to prioritize my debt. This saved at minimum $800 a month in rent payments I did not have to make. Once married and living in our own house, my wife and I cancelled our cable, saving around $100 a month, for a service that was not a necessity, especially given our affinity for Netflix. We neither drink nor smoke, saving hundreds, if not thousands, of dollars a year. All of this added up to give me a significant advantage in my battle against my Student Loan debt.

After the car fiasco, I was lucky and was able to focus on my loans without much distraction. Month after month, year after year, I would log onto the student loan servicing website and make the large extra payment on my loans. Every month I would give my then girlfriend, who turned into my fiance, and is now my wife an update on my loan balance. I am under $100,000!!! Now I am under $90,000! It is those milestones that keep you going. Knowing each payment is the next step to making your dreams come true. Celebrate each milestone on your journey, it’s important!

Beginning of the End

In September of 2017, the first part of my student loan journey came to an end. I had finally finished paying off the highest interest student loans! And was I ecstatic! Knowing that was the hard part, I gave myself the rest of the year to pay the minimum balance on my other loan to begin building up my bank account balance to have some breathing room that I had never had. Beginning in January 2018, I had decided. By December 2019, the end of the decade, I WOULD have my entire Student Loan balance vanquished. I would not go into the next decade straddled with student debt.

So I re-ran my numbers. To make this happen, I would need to pay about $1,970 a month to bring the balance to $0 at the end of my deadline. Luckily, I had progressed in my career where I could do that on top of my car payment.

And so the final sprint of the marathon began. Almost $2,000 every single month for the next 2 years for just Student Loans. At this point I never had a second thought. I had come too far. I could see the finish line. Nothing would stop me. This time the milestones flew by. Starting with over $44,000 in January 2018, I was below $40,000 by March. $30,000 came and went 6 months later in September. In October I passed $26,900, which is the average student loan debt in America after graduation. It took me a long time making significant payments each month just to reach the “average” loan balance. But I was on a roll. Suddenly, in February of 2019 only $20,000 remained. Once July 2019 came, I was down to $10,000!

Victory Achieved!

I was getting ready to make my payment at the beginning of September when I noticed something interesting. Some excess cash had accumulated in my bank account that was just sitting there making minimal interest. I ran a quick schedule and saw that if I paid off my loans then instead of waiting until December, I would save an additional $60 in interest! Not a lot but I can take my wife out for a nice dinner for that! So it was decided. September 2nd, 2019. That was the day my student loan journey would be over. One final payment of $5,705.50 was made. My student loan debt was gone. Forever!

Over the following months, my pesky car payment, with a small interest rate of 2.34% also finished. No extra payments were made but they weren’t necessary with my other loans as a priority. Suddenly, after all of the years of loan payments, the only mountain left to climb was our mortgage. Starting January 2020, it was determined that it was time to begin that ascent. $2,000 a month on top of the current mortgage payment, putting us at a payoff date of June 2027. This mountain is higher than my student loans but the stakes are larger. Full debt freedom awaits at the summit!

What Will Your Story Be?

Take a moment to share your story and your battles with debt in the comments below. I want to hear all about your struggles and your successes.

Throughout our journey together, we will talk about creating a plan to pay down your debts. We will discuss budgeting and creating a debt payoff schedule. Then we will take deep dives into different categories of expenses to determine ways to save extra dollars every month which will show you that you DO have the power to pay down debts. We will determine a payoff strategy that works for you. All of this is important. But the most important step to take is to make sure you have the right state of mind. Making sure your goals and dreams align to your plans will make the journey possible. The next article will focus solely on getting your mind to the starting gate. That is the first step in teaching you that once your debt dies, your life will RISE!