How To Pay Off $17,000 of Student Loan Debt in Less Than 18 Months

I have been waiting over a year and half for this day. Actually, maybe since I pulled my own student loan in November 2007. After paying off my student loan in 2009, I knew our next pile of student debt would be large. I wasn't yet married, so I wasn't super concerned at the time about my future husband's debt. There wasn't much I could do about it at the time, as I hadn't even landed a well-paying job (and wouldn't for several more years).

When we got married in October 2010, I jokingly said I couldn't wait to marry into $16,000 worth of debt. A couple of years later I would discover I was mistaken. My husband's debt totaled over $24,000! This slight miscalculation startled us once we realized we had more on our plate than we knew about. We paid down $5,000 immediately with the help of a family gift, and then faced $19,000 head on. We had six months until we had to begin paying, so we paid $500 in interest so it wouldn't be tacked on, and promptly avoided any further thought to the debt.

Fast forward to November 2012, and there we were, paying ONLY the minimum (roughly $184 a month, some of which was being applied to interest only). If anyone reading this has debt, which we all inevitably seem to have, then you'll know paying the minimum doesn't really do too much to your principle. Most of the "payment" goes towards your interest on the loan, and you'll be right on track to paying that loan off in ten or so years. I definitely just assumed we would be doing this, as we weren't making much money to even pay for other things outside of food and shelter.

After watching Adam Baker's Sell Your Crap, Pay Off Your Debt, and Do What You Love video, I cried and then told my husband we are going to be debt-free and pay off the remaining $17,000 in student debt. SOON. And here we are, a year and a half later. Student debt-free. So, how did we do it? BUDGETING. Lots and lots of budgeting. And lots of talking. Communication was a huge reason that we no longer have to EVER make a payment to MyFedLoan ever again. I've written several posts on this already, and I've listed them below for you if you'd like to read the full journey.

Why I Had to Trade in The Stratus for Kia Rio
Progress on Our Student Loans & How We'll be Debt-Free in 2014
Knocking Out Our Student Loans One at a Time
The Chair That Almost Blew Our Budget For The Month
Keeping Our Eyes on the [Financial] Prize
Finance 101: 7 Reasons Why I Love Mint.com
Sell your crap. Pay off your debt. Do what you love.

If you have ANY questions about paying off debt on a small budget, please let me know. I love to hear from my readers, and I'd like to help! If you have any questions on budgeting, ask away. 

Here's some quick tidbits of info on the topic, based on our experience of paying off $17,000 in less than a year and a half.

1. Talk openly and honestly about your debt. Always keep an open line of communication about money with your spouse or significant other. Hidden purchases cause unnecessary drama. As a rule, we check in with each other for anything that's not in the budget or purchases that are $30 and up. Yes, I said $30! (As I typed this sentence, my husband asked me if we would have a budget to upgrade our phones later this year. I love him!!!)

2. Consider one checking account. We truly live on a shoestring budget and we found that having two separate accounts was a bit of an overkill for us. With minimum balances and virtually no transparency, we discussed combining our accounts. After we combined our money, it only took another six months for me to start tracking our spending using Mint.com and that's when we realized we needed to make a change.

3. Don't avoid having fun every once in a while. When paying down debt, keep some fun money and budget for a few luxuries. By no means did we completely lock down ALL purchases or eat rice and beans for months. We still went out to eat, visited the movie theater, and treated ourselves every once in a while.

4. Start on your smallest debts first. I listened to Dave Ramsey before we paid down our debt, but his advice always played in the back of mind: pay off your smallest debts first and use the snowball effect in your favor. This will keep you motivated and on track. After we paid off each student loan, we celebrated in some way.

5. Celebrate your success with family and friends. I regularly kept our family and friends up to date on all of our progress. I didn't do this to brag, but more so to be held accountable for my promises to myself and to keep me motivated and excited about paying down this debt. You never know who you may inspire.

6. Pay what you can, when you can. There's no rule as to how much you have to pay. I set a goal to be student debt-free before my 27th birthday, and I've accomplished that goal with 8 days to spare! Even just setting a goal for each loan would be good.

7. If you can afford to pay more, do it! Our minimum was $180ish, and I challenged ourselves to pay $300 the month we began to really focus on our debt. The next month, I paid $500 on the loans, and I didn't really feel a pinch. I was now watching our money like a hawk and we were getting the hang of it. Then we bumped it to $1,000, just for shits and giggles. After a few months, we were up to $1,200 a month! Without even really missing that money!

8. Learn to accept one ridiculous budget, and just go with it. We have a budget labeled "Convenience Store". After I really started to pay attention to our money, I noticed that there were SEVERAL transactions for only a few dollars at a time every other day at convenience stores. My husband was making trips to grab a drink or chips and didn't realize he was racking up charges as much as he was. He's tried to cut back, but whatever! It's in the budget, so I know to expect it each month. Old habits die hard.

9. Know your priorities and pay down your debt accordingly. I'm not saying to put ALL of your "extra" money towards the debt. You need to save for retirement, pay for your child's daycare, and put food on the table. I know! Just take a good hard look at your budget and figure out where you can shuffle. I used to wander the aisles of Target aimlessly looking to purchase something when I was bored. I was raised to shop, and that was a tough habit to break, but paying down debt is well worth it.

10. Once you've accomplished your goals, prepare for your next one! I'm already dead-set on our next goal. We're saving for a down payment on a house. STARTING TODAY! We just paid off all of our student debt ($17,000!), so now we can begin to focus on another goal. And guess what? It's only going to take me about 5.8 months, because the money is already budgeted. I'm taking the $2,400 that I was paying during the last four weeks of our loan payoff and socking that away to the tune of $600/week for a down payment. Once something is budgeted for, you know to expect it each month.

And, as always, please send me an email if you're looking for inspiration, have any questions, or want to share your own accomplishments for paying off debt! I'd love to hear your story or help you get out of debt, too. Happy budgeting!

Additional resources:
I'm Fine Thanks (Documentary)
Mint.com | Review
Man Vs. Debt | Adam Baker