real life with (very) real debt
We’re slowing down our student loan repayment in 2021.
After a year that saw us shave close to $10K off the principal balance of the student loan, we set a goal for 2021 that will see the balance shrink by less than half that amount — about $3.5K.
Considering how paying back the student loan has been a key focus for us over the last two years, this represents a big shift.
But there are a few factors that make me feel good about the decision.
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Are you starting the debt-free journey this year?
If you’ve answered yes: congratulations! Committing to the debt-free journey is a big decision. It won’t always be an easy journey, but I do believe it’s worth it.
I also think there are a few things you should know before you get started.
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Starting your debt-free journey can be overwhelming.
Even when you know it’s the right thing to do, it’s still not necessarily easy — especially living at a time when having debt is considered the norm.
So what do you do? How do you move from wanting to pay off your debt to actually making it happen?
Unfortunately, as with most things in life, there isn’t one set of hard and fast rules for getting debt-free. What works for one person might not work for another.
But there are a few things that tend to be helpful for most people starting the debt-free journey.
Here are a few of those tips.
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April was a great month for us in terms of paying off debt.
We wiped out our car loan 14 months ahead of schedule (more details here). Watching that balance shrink was thrilling and seeing it finally reach zero felt like Christmas morning. That’s how exciting it was for me.
But the excitement did not last long. Don’t get me wrong, I’m proud of what we accomplished but the hard work is not finished.-
We still have an $8K credit line to pay back. And then there’s the $50k student loan to face.
It would be easy to get discouraged looking at what’s ahead. Sometimes I see those numbers and wonder if we’ll ever be able to pay it all off.
The discouraged feeling doesn’t last long, though. That’s because we have found a strategy that has made paying off debt easy: the snowball method.
We paid off our car loan last month.
This isn’t a big deal on its own — people pay off car loans all the time. What’s significant is that we made our final payment 14 months early.
We paid off our five-year car loan in less than four years.
And while we made sacrifices to do it, it was not nearly as difficult as I anticipated it would be.
Here are the three steps we took to shave 14 months off our car loan.