So just as I bragged about reaching the $10,000+ milestone in our house down payment fund, a new thought occurred to me.
I still had $12,397.84 in student loans that were costing me $80 a month or so in interest. We were making 0.5% interest in our savings account. Why don’t I pay off or refinance my student loans?
Once I get an idea into my head, I get obsessive about it. I could not stop thinking about it. I was so obsessed with my brand new idea that I couldn’t even wait for Eric to come home from a 72-hour shift, so I sent him like 20 text messages in a row explaining my thinking and asking for his approval.
Was it crazy? Was this nuts? Was I really going to hunker down 6 months of hard earned savings on one payment?
I debated the pros and cons of paying off my debt. I knew that I would be able to roll the $250 in monthly student loan payments into our savings account, and that we would most likely be able to save another $10,000 by the end of the year.
Did it suck to start over? Yes. But the reality is that we have no intention of buying a house for a few years, we just want to be prepared in case the opportunity arises. Wouldn’t it be better to be debt free beforehand and have no other debt except a mortgage? In addition, I could now start really saving my side hustle income instead of using it to pay off debt.
I’ve often asked how people manage to pay for it all? Pay off debt, buy a house, buy a car, pay for everyday expenses, etc, etc. Maybe the answer is one step at a time.
So on Friday, when I got paid, and with my newest freelance check in my account, I took $12,296.09 and paid off my interest-accruing loans.
I feel lucky that I didn’t have to completely drain all our savings accounts to make this a reality. We still have our $1,000 emergency fund, plus additional funds in other accounts (Christmas, Car Insurance, Side hustle income, etc).
We are not debt free yet. I still have a $1,176.33 0% interest loan, with a $52 monthly payment. And we still have Eric’s $5,500 subsidized loans, with 0% interest until the first payment is due in December 2014.
While our new goal now is to rebuild our house down payment fund (and maybe start saving up for a new car?) , I have a feeling that we will be completely debt free by the end of this year. I don’t see $6,624.33 standing in my way.
I cannot express the amount of joy I feel being so close to debt freedom. I cannot express the emotion I feel knowing that we were so broke just two short years ago and seeing how far we’ve been able to come in such a short time.
We’ve been on this journey toward debt freedom for the entire three years of our marriage. And I can finally see the light at the end of the tunnel.
(I’ve updated our debt total accordingly…15% left!)