She Strengthens

Breaking Free from Debt: Our Journey to Financial Freedom

My husband and I embarked on a mission to save for a down payment on a home shortly after our wedding. However, upon crunching the numbers, we realized that buying a house at this stage of our lives would be a financially disastrous decision, mainly due to our staggering student loan debt of $117,000. We initially planned to pay off our loans over 10 years, but even that seemed challenging. My first job after grad school paid me a modest salary, with 50% of my income going towards student loan payments.

Rethinking Our Strategy

We explored various options, including switching to a 25-year repayment plan, which would reduce our monthly payments and free up space in our budget for a home purchase. However, we soon realized that this approach would result in paying more than double the original amount due to compound interest. It was clear that we needed a better solution.

Inspired by a Friend

A friend introduced us to Dave Ramsey’s debt snowball approach, which motivated us to commit to paying off our student loan debt in just three years. This aggressive strategy requires significant sacrifices, but the payoff will be worth it when we’re debt-free in a short three years.

The Five Main Sacrifices We’ve Made

To achieve our goal, we’ve had to give up several aspects of our lives. Here are the top five:

1. Social Outings

We’ve imposed a three-year spending ban on outings with friends, opting for free activities like yoga classes, walks, and game nights instead. This has allowed us to stay connected with friends while keeping our expenses in check.

2. Shopping

We’ve also banned non-essential purchases, with a few exceptions like makeup, Netflix, and phone data. I’ve had to cut back on beauty-related expenses, like fancy haircuts and manicures, and have gone back to my natural hair color to save money.

3. New Cars

We drive old, paid-off cars that may not be the most reliable, but they’re affordable. We only undertake repairs when necessary for safety reasons, which saves us from car payments, higher insurance costs, and interest on car loans.

4. Our Own Place

The biggest sacrifice we’ve made is living with my parents and older brother in a small, crowded house. While I’m grateful for their support, it’s challenging to give up independence, privacy, and personal space.

5. Starting a Family

We’ve had to delay starting a family, which was a difficult decision. However, knowing that we’ll be debt-free when we do start a family brings us comfort. We’ll be able to model good financial choices for our future kids.

It’s Worth It

Paying off massive student loan debt in three years on entry-level salaries is no easy feat. Our culture often encourages us to keep up with others, but we’ve chosen to prioritize our financial freedom. When we finally pay off our debt, it will be a huge accomplishment, and we’ll be grateful for the sacrifices we’ve made along the way.