Some people will tell you it is "good debt" and you should use your extra cash for other things. I am not going to argue the financial merits in this post but the emotional, spiritual and mental aspects of paying it off and a show you how we did it and you can too!
I never realized or thought about how I was going to pay for all those nice private university classes I took, just trying to make my way in the world and keep my head above water while focusing on my studies. I didn't use college as a party time, but just never thought about the financial aspects of my decisions. Fast forward 4 years and I have $27,000 in student loan debt to go with my shiny new degree. My wife had $10,000 for her less fancy public school degree, but considering she was retiring from paid work ASAP to stay home with the baby it seemed like a lot more.
Fact check:
1) $37,000 in student loans @5% avg. - check
2) $35K/yr job for Mrs. - check (worked 3 years total)
3) Part time Grocery Store and tutoring for me (15k/yr maybe) - check
4) Pregnant Wife quickly becoming stay at home mom - check
5) Cash Flow Emergency- CHECK!
Here is what we did:
1) Found the cheapest apartment we could find that was close to friends, work and safe for a family ($450/month)
2) Prayed and Prayed for a fulltime job for me. Asked around everyone we knew for openings. Praise God I got a full-time job @ $26k/yr with benefits right before Red#1 was born.
3)Treated visits to family across town as vacations.
4)Set a budget using Dave Ramsey as a guide (tracked it with an excel spreadsheet every month) and used the 7 Baby Steps Method. Thanks to Bob @ CPF http://christianpf.com/10-free-household-budget-spreadsheets/
5)Cancelled every subscription we had (yes i mean internet, cable, newspaper, magazines). We use the library a lot!
6) Went down to one car and sold the other when baby was born.
7) Funneled every extra penny to the student loan payment using the Debt Snowball Method (including gifts, tax returns, etc.)
8) Used the Crockpot and ate the same dinners multiple times per week (meatless is cheaper for sure)
9) Set the thermostats colder and hotter than we liked but nothing extreme (not according to Mrs.)
10) Called and took car insurance coverage to higher deductible once we had $1000 saved up and had liability only.
11) Packed Lunch Everyday for work ( I have paid for lunch out 1 time in 5 years of work)
12) Worked every extra bit of overtime, side projects, babysitting, housesitting, credit card rewards, you name it we probably tried it.
13) Had one normal cell phone with a limited minutes plan.
14) Installed low flow fixtures and compact bulbs (not sure how much this helped)
15) Gave ourselves prizes and date nights when we hit a predetermined milestone - $500, $1000, etc.
I know you may have seen all these tips before, but it never hurts to try to clean up an area where money is going out too fast.
We tried to name every dollar and make it count towards our FREEDOM!
On the other side of it now for a year and a half we are a lot less stressed out and have know we could not have handled the $500+/month student loan payment with their being 5 people in the family now.
I enjoy this stuff and would love to help you out with advice if I can! The little thing really do add up.
Leave your tips in the comments too!
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