Today my husband and I are officially one step closer to financial freedom. We sent our very last snowball payment to my husband’s student loan lender. His student loan is now paid in full!
It’s taken us a long time to reach this point. My husband and I both brought a lot of debt to our marriage. Shortly after we first got married, we added up all of our debt – credit cards, student loans, a personal loan, and an auto loan. The total was shocking, almost 100k in debt. And we didn’t even own a home!
Debt payoff was slow at first. We decided to follow Dave Ramsey’s financial principles. First we saved up $1,000 for an emergency fund, guaranteeing the ability to stop charging money to our credit cards. It took a long time just to save this first thousand dollars. When you have hundreds of dollars a month in minimum payments, it’s difficult to come up with extra cash. But we plugged away, slowly but surely. We started paying off the lower balance credit cards. Then we were able to pay off our car.
Life, as expected, had the occasional financial setback. Some of them were unfortunate accidents and others were intentional choices. Our car broke down completely and it was cheaper to buy a new car than it was to pay for repairs. Against Dave Ramsey’s advice, we decided to finance a used car. I was so sick of getting stranded on the side of the freeway and I wanted the security of knowing that our car was unlikely to break down.
We also took a detour when we decided to adopt our daughter. The adoption process is crazy expensive! But bringing our daughter home was totally worth the financial detour.
Last year we began paying down debt in earnest again. We were able to eliminate almost all of our credit card debt, throwing every single extra cent at that debt. We were sick and tired of paying the bank every month and wanted freedom. Early this year we paid off the last credit card.
Then the coronavirus hit. We deviated from Dave Ramsey’s plan a second time when we decided to pay minimums on our student loans. Instead, we built up our six month emergency fund. My husband had just started his new job in November and we weren’t positive that the company would be avoiding layoffs. Rather than risk job loss and then financial disaster, we decided to boost our emergency fund from $1,000 to six full months’ of expenses.
We finished our full emergency fund last month. Then it was time to tackle the student loans! Two giant payments and that smaller student loan is toast. My husband is finally student loan debt free after 15 long years of monthly payments. It is going to be so nice to pocket that extra $148 each month!
First, though, we need to finish paying off my student loan and then our personal loan. We still have $11.5k left to go in debt payments but we are so close that I can taste the sweetness of complete financial freedom. When I wrote about finances earlier this year, I hoped that we would be debt free by my 40th birthday. I’ll be 38 this fall and I’m now hoping we’ll be out of debt by the end of the year.
My husband has worked so hard to advance in his career and reap the financial rewards of a higher paying job. Over the years, I’ve read tons of blogs, forum posts, and books about paying off debt and how to scrape pennies together to start that first snowball rolling. It took years to go from five extra dollars a paycheck to being able to make lump sum payments. Just a few more months and we’ll be completely free of debt.
The rich rules over the poor,
And the borrower is servant to the lender.Proverbs 22:7, NKJV
If you want help figuring out how to make that first snowball payment…
If you want to share your financial story…
If you just need someone to listen…
Leave me a comment! I’m always happy to help.