How We Paid Off 100K in Debt:

As of today, my husband and I sit fairly care free as we have accomplished paying off 100K dollars worth of debt! And now cash flow everything.  A big accomplishment, eh?  Today I will write about what kind of debts we accrued, how we managed to pay them off, and why we strive not be in debt ever again.  Unless we purchase a house somewhere down the road…and we can tackle that once we cross that bridge!

I can’t be too specific on numbers as I didn’t really start calculating how much debt we had until after it was paid off.  In general our debts consisted of my student loans, his student loans, my car, and two small credit card debts.

Based on my best memory, our student loans together were averaging about 85K, mine being 55K of that.  My car had approximately $10K left on it, and we each had small credit card debts.  My husband owned our home then, but I’m not counting that as part of the debt here!

Credit Card Debt:

Starting with the order in which they were paid off, I’ll start with our credit cards.  I honestly have no idea what my husband’s was.  We were so new to dating then, I assume it was just paid off and closed.  Mine oddly enough was a credit card to New York and Company, which is weird, because that sure as hell ain’t my style!  I opened that account when I conveniently lived across the street from the store in my early 20’s and would use it for work clothes. Goes to show I clearly couldn’t afford them! I still have some of those black pants today so perhaps it was worth the additional interest paid. 😉

After we started dating, I had some additional money to put towards that credit card, as my priorities were shifting and I wasn’t going out to the bars nearly as much as I once did. Instead, I was staying home watching movies. We both closed the credit card accounts, and still to this day, don’t have them.  I know some people are screaming, “but that’s how you build your credit”. Or “what about travel hacking!?” Our credit scores are both in good standing.  As far as travel hacking with credit cards goes…let’s just say I’m not opposed to it 100% but I feel better without having such easy access to spending more than I would without one.

My Better Half’s Student Loan Debt:

My husband is 5 years older than me so when I met him, he was already well into his career after obtaining a Bachelor’s Degree and tackling his student debt.  He obtained a Bachelor’s Degree in Psychology but went into a sales position.  After graduating he signed himself up for a 30 year debt repayment plan. He was determined to pay that off in 10 years!. That made him 33 when his student loans were paid in full.  He took the monthly payments Sallie Mae had decided for him and simply tripled the payments each month and 10 years later, they were gone!  Of course, this was a new strategy to me. Pay more than the monthly payment?!

He was financially responsible for all of his college education where I was only responsible for my Master’s Degree so how he had 20K less than me, one will never know…We attended the same university! He has always been smart with money so perhaps that is how at the age of 23 he knew living below his means and paying off debt was important and smart.  He also allowed himself the flexibility of a 30 year plan, in the off chance he lost his income, fell into financial hardship where he could no longer afford the triple payments.

My Student Loan Debt:

As for me, my parents were generous enough to pay for my undergrad degree! I had always been told should I obtain any further education, I would be financially responsible.  So naturally as I saw most other’s do, I signed myself up for 55K dollars worth of debt, while I obtained a Master’s Degree. A degree in which would eventually pay me 30K a year.  Something doesn’t add up here!  I received my Master’s Degree in Social Work.  I absolutely loved the classes, what social work is all about, and the idea of helping others.  But once I was actually practicing in the field, I no longer felt that joy. Feelings of incompetency occurred. I didn’t feel like quick enough progress was being made with my clients.  I sure as hell didn’t feel like I’d ever be able to pay down those student loans!

When I learned of our move we would be making to New Orleans, I knew staying in the field of social work would quickly come to an end.  It was a new opportunity!  What would eventually pay off my student loans was the equity we made from selling the house.  We had made almost 60K in the sale of the house, which was well, exactly what was needed for my loans.  We both knew there wasn’t another option.  I’m certainly not saying everyone has this quick fix opportunity at their hands. It’s how our lives have unfolded though.  What we gave up was 60K in an investment account, which likely would have dealt us a better hand down the road with compounding interest, but frankly, we just didn’t like that debt there, lingering.

My Precious Prius:

I just love my Prius! It was the first car I had purchased on my own.  Prior to that well, I drove beaters.  Proud is an understatement.  I felt like an adult, and well it doesn’t hurt that she is better for the earth and cheap on gas! After our student loans were taken care of, I hustled to pay off our final debt of my car.  Any extra money I had was being thrown at the car, even if it was just an additional $20.  I eventually got to the point where my payments weren’t technically “due” for awhile.  The car lending agency doesn’t want you to pay it off sooner than planned. That was a learning curve for me.

I had a choice when paying off my car.  Do I continue to stash money into my savings and retirement accounts, or do I just get rid of it all together?  My 4% interest rate was telling me to pay if off as planned.  My crazy rabbit hole of being debt free was telling me to kick it to the curb! I ultimately decided to make a final 3K dollar payment in September of 2017 to be 100% debt free. Not to jinx myself, but I haven’t had very many problems with my car at all since I purchased it used 5 years ago.  A couple flat tires here and there but nothing too problematic.  I plan to drive this car really for quite some time.  I hope she has the same plans for me!

What Did We Sacrifice?

Some of ya’ll might be thinking we didn’t have to make very many sacrifices.  I would reply we make sacrifices every day to continue to live debt free.  No, we never had to live on rice and beans.  But, we also gave up lavish house purchases.  We gave up investing that money into a market that would in the long run give us a return of more than the 4%-6% interest rates we were paying on.  We gave up a very stable environment where the cost of living is super low for an opportunity of the unknown in New Orleans.  Being debt free honestly gives you a peace of mind and is now allowing us to save for an early retirement.  Simply put, it provides freedom.