$30,000 Paid Off in 9 Months

by Jessica

Being one of four sisters, my parents agreed to pay for our first year of college and then we were on our own. I didn’t really know how loans worked or even the difference between a subsidized and unsubsidized loan, so I took out two Stafford subsidized loans and an unsubsidized loan from Chase Bank. I was thankful to be a mentor/RA for 3 years at Michigan State University because it saved me over $24,000 since I got free room & board.

Getting on the Dave Ramsey plan

When Dave and I got married in May 2010, I had a total of $30,000 in student loans (Dave’s parents paid for his tuition). Dave got an internship during what would have been his senior year at MSU, so he had to finish up one more year while I completed my post-bachelor dietetic internship. Since I was considered a full time student, I did not have to start paying off loans until I completed the internship.

Thankfully, Dave landed a job as a mechanical engineer and started working right when I finished my dietetic internship. Paying off loans was a top priority to us, so we read Dave Ramsey’s book “The Total Money Makeover” during our pre-marital counseling and set up a monthly budget that would allow us to pay off our loans in 25 months. Initially, we were throwing about $1,200 per month at student loans. I picked up a lot of babysitting gigs while searching for work as a registered dietitian and brought in $500 per month that went straight to loans after tithing.

Once I started working at a nearby hospital as a contingent dietitian (as needed basis), we threw an additional $500 at loans (totaling $2,200 per month). Our monthly payments were adding up and we were now on schedule to be done in 13 months! Add in a few other financial blessings like selling one of our cars & getting our tax return and we were able to completely pay off my student loans in just 9 months! You can see the breakdown of the interest vs. principal amount of the three loans we paid off in my article WE’RE DEBT FREE.

How did we do it?

How did we do it? We kept living like broke college kids. We got a one-bedroom apartment right next to Dave’s work so he could walk and we could get by with one car. We managed to stick to our allowance of $250 for groceries and $40 for entertainment. My parents let us do laundry at their place and we just bought the detergent. Those are just a few of many ways we saved money to put toward loans. We’ve never known what it’s felt like to have a real salary, so that did make it easier to continue living off the same amount we did without jobs.

Now that we’re debt free, our next two financial goals for 2012 are to max out our emergency fund and a Roth IRA. The best part of being done with loans is that we will finally get to see our money start working for us instead of flushing all of it away to loans! What an awesome feeling :)

Jessica and her husband Dave are 9 months into their first careers but have kept a tight budget in order to pay off loans and save up. Jessica’s site, Budget For Health, seeks to provide practical, useful information about food, fitness, and finance. Jessica is a registered dietitian and lives in Michigan.

Posted in Debt Free Stories | 10 comments.

10 Responses to $30,000 Paid Off in 9 Months

  1. Jai Catalano says:

    Holy S*** and there is nothing holy about s*** as my dad used to say. I am so happy reading this post. Picture me standing on my roof and screaming.

    CONGRATULATIONS.

  2. that’s awesome jessica!! i don’t know that we have an extra $30,000 lying around now, but I wish I would have been as smart to pay off loans when I first graduated college. I actually didn’t decide to become debt free until recently. but we’ve paid off a lot and we have $22,000 left in student loans!

  3. Michelle says:

    So much hope from reading your story. Thanks so much for sharing!

  4. Thanks for the encouragement, guys!
    Jai- pictured it and loved it
    Newlyweds- I can’t imagine we’d be able to find $30k lying around either if we already had our money allocated to other spending categories. At least you’ve made it over one big hill with credit card debt paid off and well on your way to knocking out the student loans!
    Michelle- I’m glad our story could encourage you :)

  5. Great job. Now it will be interesting to see if you can continue with one car. If you can’t you’ll be in debt again.

    Start building your emergency fund, a short term goal fund(car for example) and retirement contribution.

  6. That is such an awesome story. I’ve always said it is great to live like a college student even when you’re not in school, and you’re living proof of that!

  7. Another story that proves that frugality principles work. Thanks for sharing :)

  8. Woo hoo! I’m a huge proponent of paying off debt – I’ve paid off my two car loans years in advance, including one loan just last week. I haven’t paid off my student loans, though; other than my mortgage, it’s the only one I have left!

  9. Congratulations! It sure is a great feeling, right? I won’t be able to max my retirement accounts this year but should in 2013.