How I paid off $20,000 in student loans and car debt in 18 months

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  • My wife and I had about $20,000 in student loans and car debt when we got married.
  • We decided to use the debt snowball method to pay it all off, but realized we needed to earn more.
  • We got promoted and took on side jobs and celebrated every milestone.

$20,000. That’s the amount of nonmortgage debt my wife and I carried into our marriage before we started spending money seriously. 15% of our net pay went toward student loans and car payments, and we only paid the necessities. We felt like we were stuck with debt until the terms of the loans expired, and by then we would likely have new debt to replace it as people were doing just that.

My wife was the more financially savvy half of our partnership at the time, as her family had a decent education in the basics of money management. I was a bit naïve about the whole money thing and was happy to let my wife take control of the financial direction of our new marriage.

Two big moments happened around the same time to change that. My wife encouraged me to learn more about money so that we could be equally responsible for our family’s financial decisions, and the school where I taught asked me to teach a financial math class for the upcoming school year.

Both were signs that I needed to get on board and learn about finance, which I did through many podcasts and books. The end result was a burning fire to pull us out of debt and embark on a journey to financial independence that included the potential for early retirement.

We have agreed on a debt repayment strategy

Our debt was fairly basic and there were many positives to build on. There was no credit card debt, we didn’t overstate our home, and when we bought new cars we bought some of the cheapest new cars on the market (a Corolla and a Civic). Our student loan debt totaled $12,000 and the rest was auto debt.

After seeing the snowball and debt avalanche methods, we decided to take a snowball approach to using early gains for motivation. This meant that we attacked our smallest debts first and then built up the largest ones by rolling the payment of the previous debt into the next as they were paid off.

Our fridge was adorned with a new poster showing each of our debts (three student loans and two cars), the total amount owed for each, and small fundraising thermometers to visually show our progress in paying off each one.

The chart made it a fun experience and kept us going when each month’s progress felt small or insignificant. Going by the map each day helped keep the fire burning to stick to our plan and not give up until it was all gone.

We have cut spending as much as possible

At its core, personal finance is really simple. Earn more than you spend and use that extra money (“the gap”) to work on growing your net worth.

In this case, paying off our debts was the best way to improve our wealth. The problem for us is that there wasn’t a gap when we started. We had inflated our lifestyles to the point where we used up our entire paychecks each month, with a minimal amount going to retirement accounts and nothing to savings.

We cut spending where we could, but there wasn’t much left to cut back then. We needed more income to fill the gap to aggressively repay our debt.

We found ways to earn more

Over the next 18 months, my wife and I increased our income from eight different sources. This included improving our income in our full-time jobs through professional development and job changes, as well as taking on part-time jobs, temping and starting our own businesses.

As a teacher with summers off and a therapist who sets her own schedule, we have had the time and flexibility to build these new sources of income and sustain them for a short period of time. My wife worked on a winery and took a part-time job as a school social worker. I wrote a curriculum for my school district and started tutoring math in the evenings.

My favorite sideline was refereeing girls lacrosse. While being the one in the middle of the field with the whistle might not sound enticing to you, this was a way I was able to make a great hourly rate of about $1 a minute and it had a built in exercise.

We identified and celebrated milestones

In the beginning it was easy. The first two student loans were only a few hundred dollars each, so they fell pretty quickly. After that it went slowly. The snowball of money we threw at the debt had grown, but it still only made a small dent each month, which was very demoralizing at times.

We found that if we could break down the big debt into smaller milestones to celebrate, we could keep the small, quick wins mentality alive.

The celebration usually consisted of a small treat for ourselves. Nothing that would derail our efforts, but rather something to reward us for our hard work and perseverance. It could be as simple as a sweet treat or a takeout instead of cooking.

We were smart about future debt

After we made the last payment 18 months from the start, it was decided to avoid future debt if possible.

We continue to use credit cards, but they are always paid in full each month to take advantage of the rewards.

We immediately began funding an emergency fund to cover events that could force us back into debt.

Instead of bloating our budget with all the money freed up from debt repayments, we continued to pay for cars to ourselves and put it in a high-yielding savings account. This enabled us to pay for a used car in 2021 without having to take out a long-term car loan.

We’ve also used high-yield savings accounts for things like Christmas gifts, annual HOA expenses, and vacations. Anything we can reasonably plan now, we’re doing.

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