How We Started Our Journey to Financial Freedom

For the past 9 months Rick and I have been working hard at paying off our student loan debt and learning to live within our means. We’ve come a long way, and I want to share a little more about how we got started.

2 copy.jpgOur adventure began with Rick graduating from law school in December 2014. He had a fancy new juris doctor degree and about $140,000 in student loan debt.

Rick wasn’t in a big hurry to pay off this debt because he had planned to go the  –  work for the state, pay the monthly minimum and the rest will be forgiven in 10 years –  route. Starting out, his payments didn’t even cover the interest.

Side note: Not all lawyers make a lot of money starting out. But, oh, that would have been nice.

A little over a year ago, Rick started thinking about leaving the public sector, so the 10-year loan forgiveness deal would no longer stand. We started thinking about different approaches to pay off the student loans.

Soon after we got married in 2017, we decided to pay off a private loan with a high interest rate. That seemed like a logical starting point. Unsure of what to do next, we kept throwing some of our money at the loans and saving some money as well. We brought our debt down to about $100,000 toward the beginning of 2018, but we still didn’t really have a clear strategy.

Enter Dave Ramsey. I had listened to Dave’s talks as part of a wellness incentive program a few years ago, and I decided to check out his book, The Total Money Makeover, from the library.

rawpixel-602154-unsplash.jpgThis book gave us direction regarding budgeting and cutting expenses. We tracked our expenses for a bit, and in April 2018 we started our very first budget! We learned how to spend less, set aside an emergency fund (quite a bit more than the $1000 Dave recommends), and we decided on a set amount for a monthly loan payment.

Our student loan debt total was just under $100,000 that April. Our current total is $51,642.60. That’s about $48,000 paid in 9 months. Not too shabby!

We’ve had some recent changes in our life (new city, new jobs, new salaries, new expenses), and we have adjusted our budget accordingly. If we stay on pace with our projected average monthly loan payment, we’ll be debt-free by April 2020.

These are some things that have helped us so far:

Cutting Expenses:
We thought a lot about our wants vs. our needs and made some lifestyle modifications. Some of the expenses we cut included: Netflix, a gym membership, eating out, vacations, grocery bill, clothes, and other extra purchases.

Ways we made extra money:

1. We decluttered and sold some things we no longer use such as clothes, décor, books, CDs and DVDs.

2. I give plasma at least four times each month.

3. I use cashback apps and ebates.

Ways we stay motivated:img_20190109_102931995

1. Debt thermometer. I drew a thermometer and labeled the bottom of it with our total amount of debt. I put a big “0” at the top of the thermometer and dashes with amounts every $10-15,000 or so. We keep track of our progress by coloring in the thermometer a little bit when we make a loan payment. It’s super easy to make your own- clearly, you don’t have to be an artist. Or you can find plenty of free printables online.

2. This blog. I’m held accountable by my blog posts, especially the Top 10 Thrifty Wins each month. It’s a good review of our progress, and I think of how the next month can be even better.

3. Reading helpful books and blogs—The Total Money Makeover, Cut Your Grocery Bill in Half, The Power of Positive Thinking, And Then We Saved.

If you’re looking to pay off debt, save up for a house or a fun vacation, or if you just want to get a better grasp on your finances, I suggest beginning by tracking your expenses and creating a budget. See how we created our first budget to help you get started.

**This post contains affiliate links. You won’t pay any extra for making a purchase through these links, and I may earn some money to keep this blog going. I only link to products I support or use personally.

 

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