A couple weeks ago, we were ecstatic to pay off two of our smallest student loans (over $36,000 in total) – freeing $900 of cashflow each month for us to roll over to our next student loan balance.
It feels like this is the tipping point for us. As though the tides are finally turning and we actually have a shot at paying off our loans, rather than just dreaming about it. It feels more tangible. Believable.
We have about $150,000 left in student loans. Getting rid of two of them in one shot gave us a jolt of hope and empowerment. And, we want to pay the rest off as quickly as we can and move on with our lives.
That said, our goal is to be student loan-free by December 2020.
This means we have three years to pay it all off – about $50,000 each year, if we’re to break it down evenly.
We’re not exactly sure how we are going to accomplish this yet, but we want to at least shoot for something and get moving in the right direction.
Our two remaining loans consist of my $50,000 Discover student loan and my husband’s monster loan of $100,000 Navient student loan (originally through Wells Fargo, which we recently refinanced it through College Ave).
Starting next month, we plan to pay a minimum of $1,100 each month toward my Discover student loan – $900 from the two student loan payments we’ve gotten rid of on top of the $200 minimum we’ve originally been paying on it.
Our goal is to pay that sucker off in one year – by December 2018. However, paying $1,100 each month next year only erases $13,200 of it.
Leaving use $36,800 short.
We’re not exactly sure yet how we’ll come up with the money to pay off my Discover loan by next December, but we’ll have to figure something out.
Sprinting Through a Marathon
We’re in a marathon (correction: been in a marathon). It’s time we start attempting to sprint through it – at the very least, run it in intervals.
It’s been hard and will get even harder. And surely, there’ll be times when we’re going to want to quit.
So, we need to have the right mindset and heart to endure this and persevere through it.
To help us get our minds right, endure this journey and actually squash our debt to make this student loan-free thing a reality for us, we’re going to:
1. Invest in Training
Paul and I both agree that sometimes you just need to invest in education and training. You might have figured that out from our insane amount of student loan debt ;).
We just bought Dave Ramsey’s Financial Peace University.
Paul’s been listening to his radio show a lot recently. And I used to listen to him and agree with a lot (not all, but a lot) of his teachings. Dave can definitely teach us a thing or two! So, I told Paul about this course and suggested we buy it for each other as our Christmas presents and he agreed.
Can we do this on our own? Probably.
But why not equip ourselves with tools that can help us and have something like a coach behind us – to guide us and motivate us to get going and keep going to increase our chance for success?
I think we’ll find value in what he teaches in his course. Plus, there are so many other things we want to
2. Consistently Have Budget Meetings
We’ve been budgeting for a while now, but it has only been in the last several months that we started having family meetings. In these meetings, my husband and I discuss our family operations, budget, and anything else we need to decide on together.
But what also blossomed from these meetings were our discussions about some of our personal and financial goals. It’s actually from these meetings that reignited our desire to TRULY move more quickly with our debt pay-off plan and begin to take action. I say truly because although we have in the past talked about the awesomeness of paying off our loans as quickly as possible,
From our family meetings, we talked about not only our desire to pay off our student
Recently, we’ve fallen off the wagon with consistently having our family meetings and need to get back on this. Moving forward, our plan is to have regular financial meetings (outside our family meetings), so we can have focused discussions regarding our budget and financial goals, and keep these goals in our line of sight.
3. Give Each Other Some Tough Love
My husband and I have a tendency to go soft on each other and give in to each other’s wants and whims. We’re not crazy spenders who spoil each other ridiculously. But in a way, we’re enablers to each other and it isn’t helping our financial situation.
If I’m too lazy to cook dinner after work, Paul will offer to get some take-out. And, if Paul craves a burger and kombucha over the weekend, I’ll drive us there, even though I know we’ve hit our “Dining Out” budget for the month. We like food. Can you tell?
Moving forward, we will need to be tougher with each other. If we know that a purchase (one that is more of a want than a necessity) or decision is not in line with our overall financial goals and/or within our planned budget, even if we really want to do it for the other, we’re just going to have to suck it up and not give in.
We need to hold each other accountable and remind ourselves of our WHY (more on this later) and our end game, and the importance delayed gratification plays in making our end game a reality.
4. Keep an Open Mind
We have to get creative to achieve our goal of paying off $150,000 in three years. This means we are going to have to be open to ideas and strategies that we may not have considered in the past of doing or trying. Not only should we keep an open mind
5. Prepare to Get Uncomfortable
In our pursuit to be student loan-free, we most likely will need to push ourselves further out of our comfort zones to do more with regard to this endeavor.
- Should we push ourselves to find ways to bring in more income? Perhaps carve out time during the weekends for a part-time gig, instead of hanging out with the family?
- Should we get additional training in our fields to help us level up in our careers even though it already feels like we don’t have the time to?
- While we love living in the Bay area, should we move to a more affordable city?
- What other expenses can we cut from our budget?
6. Define and Share Our Whys
Last but not least, we need to capture and externalize our whys, and keep it within view. Always.
He who has a why can endure any how.Frederick Nietzche
Paul and I both have the general reasons why we wish to pay off our student loans swimming around in our heads. We’ve talked about them here and there since we’ve amassed them. But it’ll help us tremendously if we are to intentionally think about our WHY for this endeavor, write them down and share them with each other. It’ll solidify the thoughts that are just swimming around in our heads as something more tangible to motivate us in times we need motivating.
Clearly identifying our reason – what is driving us – for doing this will be integral in helping us endure this challenging journey. We must keep these reasons front and center to help us push through and serve as our north star, guiding us to stay on course when times get tough and we stray from our path.
So, Paul and I agreed to write down why we want to be debt-free and plan to share it with each other during our family meeting next week.
I hope we don’t lose steam and keep our momentum going. We’ve been in this situation for the last 10 years. We really don’t want to be in this same position, shackled by our student loans another 10 years from now.
To be honest with you, I have doubts whether we would even be able to hit our first goal of paying off my $50,000 student loan in a year. But I can’t let that doubt immobilize us. I need to get on the right footing that while we may not know exactly yet how we will make this happen, it doesn’t mean we won’t figure out a way.
For now, we’ve set our goal and agreed on it. We just need to roll up our sleeves, get creative, hold each other accountable and continue to dig in.