Thursday, July 25, 2013

Getting out of debt can take less time than you would think...

Abi has been posting lately about our grocery shopping excursions and our weekly menus. Her diligence with couponing and looking for deals has saved us an incredible amount of money in the 2 1/2 years we've been married. Without that work, I don't think we'd be doing as well as we are in getting out of the debts I'd accumulated in the years before we knew each other.

July is almost over and the last paycheck has been accounted for, so it's not likely that we'll be making any more payments this month. However, I found the binder that has all of the spreadsheets I'd saved since I started tracking our debts in December 2009. Several spreadsheets are, unfortunately, missing, and it wasn't until 2011 that I thought of keeping track of what our debt total was on the anniversary of the beginning of this journey. However, I do have the first spreadsheet, and it blows me away to look at it.

I graduated college in May 2008, which means I had until November 2008 before the grace period on my student loans was due. So by the time I started tracking the numbers, I'd already been regularly paying on my student loans for about a year. Here's how it all broke down:

I had six distinct loans through American Education Services. These are classified as student loans, but a good portion of the money had been borrowed to pay off a credit card I'd maxed out twice. I'd also borrowed $10,000-$12,500 through this group to cover living expenses while I was going through my internship. These six loans together totaled $74,441.55 and had a total monthly payment of $498.94. I've been able to pay each of these loans individually, which has been a huge help.

I'd been able to obtain some Stafford loans through school, serviced by Great Lakes. It was split into two payable loans, one at $2,907.55 with a monthly payment of $50.00 and the other at $21,331.20 with a monthly payment of $258.09. The total there was $24,238.75 with a monthly payment of $308.09.

Then I had two credit cards I was paying off (Wells Fargo: $2,157.61 @ $62.00/month; Bank of America: $6,429.36 @ $150.00/month), totaling $8,586.97 with a total monthly payment of $212.

I also traded in my car in May 2009 and took out a loan to cover the rest, which was $9,199.56 in December with a payment of $215 (this was before I'd heard anything about Dave Ramsey).

And I had a personal loan valued at $8,960.96 with a payment of $297.53. I honestly have no idea why I had this, which is rather distressing.

So, all in all, on December 22nd, 2009, I had a debt total of $125,427.79 with a total minimum monthly payment of $1,531.56. Yikes! Praise the Lord I was in a great job with a good salary. I was also sharing a cheap (for Rochester, MN) apartment and splitting the costs of rent and utilities.

By February 15th, 2010, I'd already made some fairly impressive strides. I'd completely knocked out the Wells Fargo credit card and paid off almost $2,500.00 of the lower Stafford loan. I finished off that Stafford loan by April 9th, 2010, and by then had already paid off $8,492.43 (that's just 3 1/2 months!).

Fast forward to today. We owe my sister-in-law, Susanna, $11,250.00. She had loaned us $10,000 at 5% for 5 years when Abi and I got married to pay off the car and make a big payment on some of the other debt. Rather than deal with monthly payments to her, she let us make the total $12,500.00 with a payment of $500.00/year for 5 years. That has freed us up to make bigger payments on the rest of what we owe. In addition to that loan, my Stafford loan is down to $6,852.67, made possible through a program at work where I was awarded $5,000. And I only have two loans left through American Education Services, totaling $18,946.52. Not making allowance for what we owe Susanna, our monthly payments are now $441.58.

This boils down to having paid off $88,378.60 in just over 3 1/2 years. We've managed to pay off $11,610.06 this year alone, and are on track to make our total payoff this year almost $20,000.00 (Abi says we should really pinch our pennies and get that up to $25,000.00).

Even if I don't receive an award from work this year (though I'm most definitely hoping I will get something through work), we should have all of the student loans paid off by the end of 2014 at the latest. Depending on Abi's income and the potential award through work, we could even possibly have Susanna paid off by then. It's exciting to think about!


  1. All I can say is that this is truly impressive! I see a lot of wise stewardship and definitely working together to make it happen. :) to be able to pay that huge amount off by the end of next year is impressive! Blessings!

  2. I am a number cruncher and I loved this post! What an excellent job you have done and what a great witness. :)
    We had twice that in student debt with my hubby's tuition topping out at $58,000 per year and only $498 per month to live on after our rent and utilities ( our student loan center felt I should have been working and not a stay at home Mom). IT was a HUGE pinch and I was very thankful for family who the odd time helped out with a bill or Christmas gift!
    In the 6 years since Dh graduated we have managed to pay off a mind boggling amount of debt (mind boggling to me who was not going to marry anybody in debt *G*), pay off a house and 15 acres worth $85,000, as well as purchase a second hand vehicle that was in reliable condition (which is more than I can say for the first 6 vehicles we have had LOL). And all while working for a very low industry standard amount of money (we live in a rural place that does not offer good salary that other places do)
    The incredible stories we have of the Lord providing when we had nothing (we never purchased a vehicle up until this new one as all were given to us) are incredible.
    Anyway, most people don't share details and as I love details it is nice to see how others handle the debt.
    DH chose to go to part time as our kids are old enough that we felt DH working like a dog to pay off debt was sacrificing our family so instead chose to take a bit more to pay off the last bit. When I sit and look at the debt we paid off I actually sometimes can not figure out how it happened :)
    We are down to $55,000 of student debt and no other debt and blessed beyond measure!

  3. Wow, Heather - you guys have done SO well! That's super impressive to have already been able to pay off your house and 15 acres, and while working part time, too! Very inspiring. YOU guys should be the ones blogging about your progress. ;) And yes, isn't it amazing to see how God provides?! That's the most exciting part about all of this, for sure.

    And I had to chuckle about your "not going to marry anybody in debt" comment - that was me, too. ;) Looking back, I kinda wonder what in the world I was thinking walking into this kind of financial situation. Just took it on faith that Joe was going to stay focused on paying things off...and he has proved himself worth every bit of that confidence. I'm so proud of his hard work and dedication to remaining frugal in our lifestyle choices - something that is probably a lot harder for him than I realize, since I grew up with even less than we live on now.

  4. Amazing! Way to go guys! It is HARD to pinch pennies so much, especially when life gets busy with a newborn, etc. and even more so when peers spend very differently. We had some student loans to pay off, though "only" $15,000 and it took a lot of work and penny pinching (on a part-time labouring job). Way to go, I'm impressed by your continued perseverance! It will pay off big time long-term!

  5. Abigail, we are BOTh blessed to have hubbies who are so supportive of paying off debt. My hubby has happily been on board for everything we do and when I'm stressed about finances, he says, "Well, let's cut back more - what do we need to do?"
    Which means if I want to pinch pennies more, he jumps on board and understands and sometimes when I need to back off, he reminds me of the fun in a night off or a splurge of icecream on a summer evening. :)
    And just when I'm stressing over selling a place, the cost to renovate etc he gets a production bonus that will more than cover things that stress me :). Of course maybe i should have just not stressed in the first place ;) *G*

  6. Wow! I am truly impressed. Joe, it is true that we can get to financial freedom by having proper management of the money that comes to us and the pieces that leave. We should be in control of every dollar we own by handling them the right way, or else it will take control of us. Keeping track of everything helps you know what the next move should be. I am happy for your family!

    Andre Steinberg @Credit 360 Consulting

  7. Debt, like food, is already a part of our routine. It is something that we shouldn't miss, nor take wholly. There comes a time that we need it as back up when we ran out of money. You should not be afraid to ask for debt. Instead, learn how to control yourself from engaging.