As of June 30, 2019, the balance of the student loan is officially $10K less than it was six months ago.
In January 2019, this loan — our last one — sat at $47,355.79. For months, we made interest-only payments, followed by two months of minimum payments while we finished paying down all our non-student loan debt.
In January 2019, all our other debts were paid off and we started making big additional payments to the student loan.
Six months later, the loan is sitting at $37,171.16.
How did we get here? What have we been doing that has enabled us to pay off $10K of the principal balance of this loan? Here’s a snapshot of how we made it happen.
Our debt-free journey
We started our debt-free journey with upwards of $65K of debt. This debt came in four forms: small credit card balances, a car loan, a credit line and the student loan.
For the first year and a half or of our debt-free journey, we focused in on wiping out the smaller debts using the snowball method.
This is how we paid off all our credit cards (although we still use them regularly — here’s more about how) and knocked out the car loan 14 months early.
In November 2018, we finally — finally! — finished paying off the credit line.
This left one loan: the student loan. The biggest of all our debts combined — and the one we knew would take the longest to pay off.
How we wiped $10K from the principle of the student loan over six months
There are six key things that have helped us make so much progress as we pay back the student loan.
We made it a priority
We want to be debt-free — and we want to reach that point sooner as opposed to later. To do this, we know we need to make paying back the student loan a priority.
In our case, this meant rolling our debt snowball right over to the student loan once we finished paying off the car and the credit line. We make extra payments to the student loan every month. Is it fun sending so much money to student loans every month? No. But it has definitely made a difference.
You don’t get debt-free by accident. Making paying back the student loan a priority is the biggest key to the success we have had so far.
We paid a little bit every pay day
Most months, we make a total of five payments on the student loan — two mid-month (one on my pay day, one on Jeff’s), two at the end of the month, then the final, regular payment.
The regular payment includes a portion dedicated to paying the interest, but the majority of our payments go toward the principle.
I like making several payments throughout the month for a few reasons. One is because I like to actually see the principle go down on the site as the payments process. The second is because the more principal we pay down, the less the interest share of the payments will be in the future.
We decided on an amount and we stick to it
Each month, along with the regular payment ($450), we pay an additional $1K toward the loan.
This amount used to be higher and on months where we get paid three times, it still is. But around March, we made some adjustments to our budget, which included changes to the additional monthly payment.
An extra $1K per month allows us to make great progress. Paid with the minimum payment, about $1200 per month goes directly toward the principal.
I would be remiss if I didn’t acknowledge here the role our privilege plays in making it possible to pay so much additional money each month to this loan. We both work full-time in jobs that pay well enough to make this possible without being too uncomfortable. Throughout our debt-free journey, our debt snowball has been adjusted as our income has gone up. The point here isn’t the amount; it’s the idea of doing the best you can.
We make room for fun in our budget
Directly related to the last item, one big reason we scaled our additional payment back is to create more flexibility in our budget for personal spending (more on that decision here).
Yes, this pushed out our debt-free date but I can’t lie: it has been so nice.
I’m not a big spender, but it has been nice to not be so rigid with our budget. The number for personal spending fluctuates from month to month, but we are both so much more satisfied now that we have given our budget room to breathe.
We’re still making progress with our debt, so I would say it is working out well for us.
We track our progress
Have you checked out Debt Free Charts? If you haven’t, I highly recommend that you do!
One of the first things I did when we started paying back the student loan was head over to Debt Free Charts, print one off and stick it on our fridge. It has stayed there for the last six months as the bars are slowly coloured in — and honestly, shading them in is a huge highlight of the month for me. I love being able to see our progress in a tangible form.
(For the record: this is not at all sponsored or anything by Debt Free Charts — I just genuinely love the site. There are SO many free downloads and most of the ones that are not free are super cheap! I really recommend checking them out if you are looking for a chart to measure your progress!)
We keep our expectations realistic
As much as I would love to one of those people who gets debt-free in 18 months or whatever, that’s not going to be our story.
And honestly? I’m OK with that.
I really respect all those people who are going at their debt with gazelle intensity. That takes a lot of dedication and a lot of hard work.
But I’m not interested in being gazelle intense.
Don’t get me wrong: I want to get out of debt as soon as we can.
But I also want to be able to live my life now — because honestly, you never know how much time you have, you know? There are some things in life that are more important than being debt-free, and at this point in our journey, we know what those things are for us.
That doesn’t mean we stop trying — obviously, since we’re still sending an extra $1K toward the loan every month — but it does mean we don’t hang on to an unrealistic expectation of when we’re going to cross the finish line.
The debt-free journey is a marathon, not a sprint. It doesn’t matter as much to me about how long it takes to cross the finish line — as long as we cross it.
Final Thoughts
Watching the principal drop on the student loan over the last six months has been exciting.
There’s still a lot left to go, but I’m glad to have shaved $10K off the total — and looking forward to continuing that progress in the second half of the year.
What do you do to stay on track with your debt repayment goals on the debt-free journey?
