Living With Debt

How We’ve Paid Off More Than Half Our $27,000 Of Student Loan Debt In 10 Months

By | Thursday, November 10, 2016


Student loans continue to be on the rise, and are one of the biggest issues millennials are currently facing. Over 70% of college graduates finish school with student loans, which average between $26,000 to $37,000, depending on which sources you use and other factors. I’ll spare you any more dire statistics, but it’s clear that student loans are a big problem.

My wife and I both graduated with student loan debt, which combined added up to about $40,000. I guess you could consider us better than average with that amount, but it still felt like a huge burden that would take many years to successfully pay off.

Here’s a brief timeline of our progress:

  • May 2013: We graduated with around $40,000 worth of debt (we were still just dating at the time, but our relationship had progressed to the point where we were thinking long-term together).
  • We used the six-month grace period on our loans, and didn’t start making payments until November 2013, without realizing/caring that interest was accruing all throughout that time.
  • For about the next 21 months (November 2013 – July 2015), we just made slightly-above-minimum payments on our student loans, apart from a couple lump sums that were few and far between. There were a lot of reasons for this, including focusing on building up savings, paying for a wedding and honeymoon, inconsistent employment, etc.
  • I started learning a lot about managing our finances effectively around August of 2015, and started tracking our spending carefully. Before this point, our mindset had been, “Just try not to spend too much, while making occasional splurges.”
  • Our first goal was to build up a healthy emergency fund. At this point, we had some savings built up, but since we live in an area with such a high cost of living, we wanted some additional security.
  • In January 2016, our student loan balance stood at about $27,000. We then started to aggressively pay down our loans. As of November 1, 2016, our balance is down to about $12,000 and we see a light at the end of the tunnel!
  • It took us over 2.5 years to pay down our balance from $40,000 to $27,000. Now, in the past 10 months we’ve paid down the balance from $27,000 to $12,000.

We consider this to be a big accomplishment, and it’s just the beginning. So how did we get to this point? There are obviously a lot of people out there with student loan debt, and I think a lot of times, it can be incredibly daunting to get started. It can feel hopeless when you’re bogged down with debt payments, yet struggling to get by every month.

Like many other concepts in personal finance, there’s no “one size fits all” approach. What works for some people may not work for other’s situations. You may have different circumstances, values, and goals to consider. This post is meant to share some of the ways we’ve been able to start paying off our debt faster, and hopefully a few of these methods can be applied to your particular situation, and help you reach debt freedom sooner.

1. Build Up An Emergency Fund

Building up an emergency fund was our first main money goal. After experiencing some inconsistent employment, we wanted to be sure we were protected from future hardships. This also helps you avoid going into additional debt if an expensive emergency comes your way. Many financial advisers recommend at least $1,000. Since we live in an area with higher cost of living, we saved up more than that before fully focusing on our debt. Also, when times got hard during our debt re-payment process, we were able to look back and realize that we had already accomplished one goal together, and we just had to continue pushing forward.

2. Dave Ramsey and Gazelle Intensity

What really sparked us to ramp up our debt repayment was attending Financial Peace University, a financial class that teaches the methods of popular financial teacher Dave Ramsey. Ramsey’s methods helped get us “gazelle intense,” which means attacking your debt with the intensity of a gazelle fleeing a hungry cheetah! While some people may not agree with all of Ramey’s philosophies (me included), viewing our debt with this level of seriousness was paramount for us to speed up the process. I’m a huge believer that motivation is the single biggest key to paying off debt quickly. You have to make it your number one focus in your budget to start seeing the most progress.

3. Tracking Spending

One of the biggest keys to managing our money better and paying down our debt quickly has been a result of being more aware of where our money is going each month. We utilize Mint to track our expenses and set up a monthly budget. This helps us avoid spending too much in any particular area, and be intentional with how much money we allocate towards debt repayment each month.

4. Challenging Everything

This step is all about identifying areas in your budget where you can improve, and challenging all your regular expenses. After tracking our expenses and budgeting for a few months, we found areas where we were spending more money than expected. I went through every one of our bills to see what we could cut back on. This included switching companies for our car insurance, switching cellphone providers, cutting down on food costs, and selling unwanted items. All of this freed up money went straight towards paying off our debt.

There are a ton of ways to cut back on your expenses, but be sure to cut back on the spending that you care about LEAST. Don’t cut out the areas of your spending that bring you the most joy; focus on the expenses that are most forgettable. For example, we’ve still been setting aside some money every month for a “Travel” fund, because we value getting to explore new places together.

5. #SideHustle

I work a second job with a minor league baseball team April through September. There are many benefits to having a side hustle; the biggest one is that all money you make can be considered “extra.” Presumably, you’re already making ends meet with your full-time job, so you don’t “need” the side hustle money to get by. For us, we kept our budget exactly the same as it had been the rest of the year. Every time one of my paychecks came in from my second job, it went right towards attacking our debt.

6. Automate

Before the month started, we set up our monthly budget on Mint, and allocated as much as possible towards debt re-payment. Then I broke down that amount into four automatic payments and scheduled them one per week. Scheduling a month’s worth of payments before the month started meant there was no way of talking ourselves out of it. Psychologically, it felt really bad to cancel a payment, so we avoided doing so at all costs.

7. Small Rewards and Celebrating Progress

The road to debt freedom is often a long and arduous one. Take the time for some small indulgences along the way. We made sure to recognize the progress we were making, and celebrate our big milestones. It’s also important to not sacrifice what you find the most joy in. Yes, paying off debt is difficult and requires a lot of dedication, but it’s also necessary to avoid making your life miserable at the same time.

8. Patience

Debt feels like a big weight on your shoulders. It can be overwhelming and stressful, and if progress doesn’t appear to be happening, it can get really discouraging. During debt repayment, it’s extremely important to remain patient and focus on taking small steps forward. Running a marathon starts with taking the first step. While I’m anxious to get out of debt as quickly as possible, I also recognize the importance to appreciate the journey and continue pushing forward. One bad month doesn’t undo all the progress you’ve made — let it go, and get back on the right track.

9. Team Effort

My wife and I couldn’t have made this much progress in such a short amount of time without the support of each other. Encouraging one another and continuing to push towards our long-term goals has helped us when times got tough. It’s helped us stay on course from an emotional standpoint, but also, having two incomes to work with has made a huge difference. If you’re married, I’d encourage you to lean on your spouse during your debt repayment journey. If you’re single, find a support group of family members and friends to help check in with you throughout your progress.

Final Thoughts

You might notice that some of these points recur often in my posts, but that’s because I’ve experienced firsthand that they work. They may not be groundbreaking, or a perfect blueprint for your situation, but I’m confident that anyone can take a few of these principles and improve their finances. It all starts with gaining awareness of where your money is going, and having the motivation to improve.

A lifelong Bay Area native, Matt Spillar graduated in May 2013 from Fresno State with a Sports Marketing degree. He currently works on the Content Management team for and has worked four seasons with the San Jose Giants. You can read more of his writing on the DealsPlus blog, or his personal blog. He is also on Twitter

Image via Unsplash 



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