According to the always-correct Internet about 40 million Americans are carrying some sort of student loan debt. About 6 months ago, Nick and I were part of those 40 million. Between Nick’s few years at ASU and my attempt at full-time school and work we had accumulated a little over $20,000 in debt.
This type of debt is so common and typically has such a low interest rate it is easy to put it on the back burner and just pay the minimum hoping that it will be gone in 20 years. Nick and I started out just like that, happy to pay the minimum each month, until I got pregnant. Finding out you are expecting a baby changes more than just the number of people living in your house.
I realized that we needed to make some changes, starting with our debt.
I always feel like the hardest part of anything is just starting, but with debt you just have to start. What helped us the most was creating a budget. We used a website and app called Everydollar, it’s free and I highly recommend it. At the beginning of the month you put in your projected income and assign every dollar you are going to make to a certain category. When you do this you are telling your money what to do. As you make purchases throughout the month you update that app to make sure you don’t go over your budgeted amount. Since we had a baby coming we kept paying the minimum on our debts, but we piled money in our savings account. Every month it felt like we were making more money, enough though our salaries hadn’t changed. For once we knew where our money was going.
Just by budgeting and telling our money where to go, between the months of May and December we had saved around $10,000. Combine that amount with our tax return and we were able to completely clear all the student loans. It feels great to have that paid off and because we don’t have that extra monthly payment I am able to stay at home with Emerson instead of working.
Comment below if you have any tips about paying off debt or if you would like to see more tips for budgeting.