Thrifty Wife Happy Life

Helping women love what they wear on a budget

How to Pay off Your Student Loans

by Katie Haller

How to pay off your student loans before you're 30
I’ve been wanting to share my story about how I paid my student loans off for quite some time now. I’m hoping that my story will prove to all young graduates with student loan debt, that it is not impossible to pay off your debt at a reasonable time.

First of all, I have to say that I would have never been able to pay off my loans at the rate I did, without the help from my husband.  He is the financial brains behind the whole thing.  He’s my personal financial planner.  Without him, I would have been struggling to make the minimum payments on the loans or I would have had to refinance them and continued to make payments on them well into my 50’s.

How did I get in so much dept?

It all started back when I was a junior in college.  My family had always taken care of me financially. I never really thought the day would come that I would fully be on my own.  I was enjoying my college life, working a part-time job, going to school and enjoying my sorority life.  It was then that my dad started breaking the news to me that he could no longer fully financially support me through school.  He said I would have to look into financial aid or some student loans to help me get through the rest of my schooling.  After talking with some friends in similar situations, I decided that it would be a good idea to take out student loans.  It was easy.  All you had to do was go to a website, give them your information and you could take out as much money as you needed.  Giving a 21-year-old this kind of power is never a good thing.  I took out enough money for tuition, housing, books and then some.  I knew I had to pay it all back one day, but at the time I wasn’t thinking about the future.
I was only thinking about what my weekend plans were going to be.

I ended up doing horrible in the first semester of my junior year.  It really put me behind in my program and that’s when I got off track with my classes.  In my fifth year (yup that’s right, I stayed in college forever!) I finally found a major that I could stick with. One that I ended up loving…if only I would have figured this out sooner I could have saved myself a lot of money down the road.
Things came together for me in my fifth year of college.  I met my husband, who at the time was already graduated and had his first job out of college.  I worked hard and eventually graduated with a degree in Family Studies and Child Development…..oh yeah and with about $70,000 of debt.
It was literately 2 weeks after I started my first job in early childhood that I received my first student loan bill.  You see, when I was borrowing this money, I thought that you would only have to make payments of $100 per month.  Boy was I wrong about that.  My payments were well over $600 a month, with most of it going only to the interest.  It was a nice welcoming to the real world.

The journey to becoming debt-free

Little did I know, long before I was thinking about those loan payments, my husband had been thinking about marrying me.  One thing about my husband is that he hates debt.  He hates the thought of owing money.  So he had already been brainstorming how he was going to make me his wife and get those loans out of the way as fast as he could.
We got married in the spring of 2011.  We were 26.  The plan was that we would have the loans paid off by the time we turned 30.  We ended up paying them off by age 28.  By January 2013 we were completely debt-free.  This was not bad considering at the time our yearly combined income was never over $60,000.
So that’s my story.  People are always interested in how we did this.  Everyone from our friends to our own parents can’t believe how fast we paid those loans off.

How did we pay them off so quickly??

We made a plan- Having a plan is always the first step that you need to make in all financial situations.  Before we got married, both of us understood the plan.  We knew that there would be sacrifices, and we knew it wouldn’t be easy.  Every month we would re-evaluate the plan to see what we had to do to make it work.  We had our moments where the plan seemed difficult and it seemed like we would never get through it, but we stuck to it no matter what.

Pay off the loans with the highest interest first- If you have any kind of debt, you understand that your money is mostly going towards the interest, not principle.  Some of my loans had over 11% interest rates.  It was important to get those loans out of the way first, then we made our way down to the lower interest rate loans.

Do NOT take on any extra debt- Whatever you do, do NOT create any extra debt for yourself when you already have so much.  It’s very tempting when you get your first real job out of college to want nice, new, shiny things.  New clothes, new purses, new cars, new furniture…the problem here is that most likely you can’t afford it.  Which means you will be using a credit or taking out more loans.  Think about it… is this really a good way to start out your adult life?  Owing more than you have, when you are already in debt up to your elbows?  Wait a few years.  Once your student loans are paid off you won’t believe the amount of extra money you will have.

Live off of half your income- We put half of everything that we made towards the loans.  You might be thinking that we were lucky because we had 2 incomes, well each of us had abnormally low salaries.  We still made it work.

NEVER spend more than you have- Credit cards can be a great financial tool, but when used incorrectly they can get you into trouble.  Like I said before, do not take on any extra debt!

Put all extra money towards your debt- After our wedding, we put all of the money that we got as gifts towards the loans.  When we got our tax returns, we would put all the tax money towards the loans.  And when we sold my husband’s condo that he owned before we got married, all the money went towards the loans (this is what really helped us pay them off so fast).

So why not just make the minimum payments and slowly pay off the loans?  Well, there are many reasons.  First of all, my husband doesn’t believe in having any kind of debt and I’ve adapted his view on this.  Owing money is a horrible feeling to have.  Another reason was that we didn’t want to start a family with so much debt.  We wanted to be financially prepared for when it’s time to have a family. The most important reason why we wanted to get the loans paid off so quickly was that we wanted to start saving for retirement.  After the loans were gone we were so used to living on a small income, we were able to put all that extra money into our retirement funds full force.

I’m hoping that my story will help inspire people to crack down and pay your debt off as quickly as you can.  It’s been a year in a half since we made our last payment towards the loans and it feels great to have financial freedom.  We both will be 30 at the end of this summer and it feels amazing to know that the rest of our lives are still ahead of us… debt-free!  This is why I wanted to share my story with all of you.  I hope you can use my advice to reach financial freedom and take those debt chains off.  Good luck to you!

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