Budgeting for 2012 Part 2: Our Story About Paying Off College Debt

Paying Off College Debt

Thrifty Thinking

How We Paid Off Our College Debt

Are you carrying the weight and burden of debt?   Do you have thousands of dollars of debt?  Are you feeling so overwhelmed with debt you just ignore it?

When Jonathan and I married, I was fresh out of college, and he had 3 years of full-time schooling yet to accomplish (1 year as an undergrad and 2 in graduate school).  He brought over $38,000 in college debt to our marriage, which 0f course became OUR debt.  We had no credit card debt and we had no car payments.  I brought about $7000 into the marriage, and a month after we got married we paid $5000 cash for a 1994 Toyota Tercel that we still drive.  By the way, it’s my secret hope that our oldest child, Ellie, will be able to drive this car in 10 more years. The only thing we owed was the college debt.

Our first year of marriage we lived in an apartment and started to tackle the college debt right away, paying $500 month, which was about double what we were required to pay per month at that time.  There were three student loans, and one we only owed $1000, so we tackled that right away.  We knew it was just for a season, but I was the primary “bread winner” as Jonathan was completing his undergraduate degree that year.  At that time Jonathan worked at Eagle (now Lowe’s) full-time, earning a little over minimum wage.

After being married 11 months, we bought our first house.  It came with a $147,500 mortgage.  After this purchase, we no longer paid $500/month to the college debt.  We did pay an extra $100 to our mortgage, though (which will save you thousands of dollars if you do and for us would have cut our 30 year mortgage to a 22 year mortgage.  We’ll talk about that at a later date.).  So we went to paying the minimum $117.96 and $114.53 to each of the remaining two student loans.

Fast forward eight years.  I was now a stay-at-home mom, teaching piano lessons at home about six or seven hours a week.  Jonathan was working full-time, and we would have been considered a close-to-median income family.  I wish it were socially-acceptable to share with you exactly what we make in order to encourage people on the road, but unfortunately, it’s not.  On one college loan we had only paid the minimum, and on the other loan we were paying $319.05 monthly.

In the summer of 2008 we decided to get super aggressive about paying down the debt.  We had listened to the Dave Ramsey “The Total Money Makeover ” and grabbed onto the “debt snowball” concept.  This is where you first give money to the Lord (if you weren’t already doing so; it’s His anyway), build a $1000 emergency fund, and then take the smallest debt (regardless of interest rate) and work to pay it off.  Let’s say it’s a car payment of $219 per month.  Once you pay off the car, you throw that $219 in the direction of your next-smallest (now smallest) debt, and so on.  Every month.  Until you have zero debt, period. It’s a pretty effective method, and very popular.

  How We Paid Off  $38,000 in College Debt


At this point, we had about $16,000 left to pay on the student loans.  We started paying the minimum to our mortgage, and we focused on the smallest of the two loans, which at that time was about $2500.  We started going after it aggressively.  I had accompanied for many weddings that summer, and we were able to pay $500 a month to it during the summer.  This got REALLY addicting.  Then during the school year I was getting paid weekly with lessons (even if people prepay for the month, I only pay myself as I earn it because I can’t use money I haven’t earned yet), and I started paying down the debt weekly sometimes.  I would put the money in an envelop.  Sometimes I would put $20, sometimes it was $2, and sometimes it was $200.  Any amount of money helped us chip away at the debt.  If money went into the envelope, it couldn’t be touched.  Even if we thought we really needed it, we lived like it didn’t exist.

A couple of months we were able to pay close to $2000 with tax returns, or some unexpected income.  Other months we had to pay the new minimum in our head of $500 because in that time span I had my baby boy and we had some medical expenses.  We ended up averaging a payment amount of about $1000 per month to the college debt.

The snowball was growing.  It was building more momentum.  It was sooo fun to see the numbers go down!!!  I am excited just thinking about this now!  Before we knew it, in 16 months, we had paid off $16,000!   We caught the fire and had the desire to get the weight of the debt off of our shoulders.  It was gone.

Now we still do have mortgage debt, so we are not debt-free.  Some would consider us debt-free because we only have mortgage payments left, but we don’t think that way.  We owe money to someone, so we are not debt-free.  Some would consider college debt, good debt.  We don’t agree.  That is money owed, so it is a debt, and we’ve got it in our sights….

So what did our spending and budgeting look like while we were trying to pay off student loan debt?  It looks very similar to how it does now.  To be clear, these are strategies that we use that may or may not work for other you; it depends on your situation.

We paint ourselves into a corner; we start off each month with $300 in our main checking account.  This is how we pay our gasoline and incidentals, gifts, clothes…whatever may come up.  The rest of Jonathan’s income is designated to pay the bills, for savings and loans.  Our grocery money comes out of piano lessons, and if there’s anything left over it goes to bills, loans, or for cash for Jonathan.  In our main checking account I really want to end up with about $50 at the end of the month so I only have to replenish $250, and then the $50 I didn’t use would go to pay down the next bill.  There are times when we have almost no money in the checking account, and then we can’t spend.

How do you get out from under ALL this debt, you may ask?  You do it dollar by dollar.  If you have bad financial habits, turn a 180 and don’t look back.  If you think saving one dollar won’t matter, you are wrong.  When you are buying, you have to ask yourself if you are buying things because they are a need or a want, and then you have to make sure that the need is really a need.  We encourage you to try to save some money and pay down your smallest debt first.  It can be so addicting because it is so freeing!!

We hope sharing this story can be an encouragement to someone.  Personal finances can be really tricky to discuss, but if you would like to share your story of tackling debt, we’d love to hear it.

If you missed Budgeting for 2012 Part 1, go here.  Go here for an encouraging anonymous getting-out-of-debt story.

Have you read…?



  1. says

    This is an inspiration! A few years ago I started making my New Year’s Resolution to pay off a certain credit card or other random debt. If I focused on only one piece of debt, I found that I could pay that off and start on another before the year was out! And it’s amazing how addicting paying down debt can be :)

  2. says

    This is encouraging. Thank you. We both carry student loans from schooling completed years ago. We are currently working away at another, much smaller debt, and have been pretty aggressive about it. Strangely, it never occurred to me that we could then turn around and apply that payment to those hovering, horrible student loans. Duh and thanks.

    • says

      You are welcome. I LOVE the snow ball effect. When you finish off your smaller debt and tackle the student loans, you will be so encouraged how much faster it goes to pay off the second debt with the addition of that “freed” up money from the first loan you can now apply to the second loan. Thanks for sharing and visiting!

  3. says

    Hi there, I’m far worst than your husband. I’m very much in debt..up to my nose. I’m the sole bread winner..my husband is a stay at home husband. He help to take care of our 4kids (age 8 yrs and below). He did a good job of it.

    Previously he own a restaurant (partnership) but not anymore. We can’t find enough money to feed the family, my transport to work and kept borrowing money from brother and mother. Am so ashamed of it but had to do it.

    I havent finished how you did it, but I felt like rying already of how bad I’ve put myself into. I have housing loan (which the house doesn’t belong to me anymore, it was auctioned off), credit cards debt and personal debt with the bank.

    It’s true what you wrote, it is so much until I don’t want to think about it anymore. ‘:(

    • says

      Hello Mrs. Nice, I am sorry to hear about your financial burden. When you are that buried in debt, try tackling the smallest debt first. It will be rewarding, and addicting to getting out of debt. I know this is a generic answer, but think out of the box. Is there something your husband can do to earn money, even if it is from home? Or can he look for a new job? Sometimes people look at their circumstances and think ‘this is what I have, and I can’t do anything about it’, when they really can. I don’t know your day to day circumstances, but it’s important that you try to not borrow any more money-soak dried beans, eat rice-not instant, etc. I don’t know if you have credit cards, but get rid of them/stop using them. If you have things like cable TV, that should go. To get out of debt you have to get drastic. Remember you will be encouraged as you tackle one thing at a time. Small changes demonstrate true and lasting change. May God bless your circumstances.

  4. says

    This is very inspiring. I’ve got tons of college debt hanging over me and not enough income to even cover the basics (yet). It’s overwhelming and extremely stressful, but very helpful to see others conquer their debt! Thank you!

  5. says

    Thank you so much for sharing Sonja because for 6+ years, this has been me: “Are you feeling so overwhelmed with debt you just ignore it?” I feel so suffocated by the thought of my debt that I just auto-pay the minimum and never look at that scary grand total. >_< This truly gives me hope that I can pay at least MOST of it off before we have kids!!

  6. says

    We have worked very hard to get out of our credit card debt before our children were born. We do have a mortgage which we, too, consider to be debt that we don’t want so we are working diligently to get it paid off as soon as possible. We have been hit very hard as a result of the economic downturn. Our income has been affected greatly so paying extra to mortgage debt is difficult, if not impossible. We live on as little as possible so we can do that, however, because we understand the importance. Thanks for sharing your story. It is an encouragement!

  7. Dee Brooks says

    When you said we I was thinking, “They are a two income house hold, of course they can do this”. Then I read the whole story. And I feel like if you guys did it so can I. I only have one child, and I have two decent sources of income. Sometimes 3 when I am receiving child support. I read this because I am planning on pulling out all the bills, old and new. I am going to open every piece of mail, and I am going to get very real about what I owe and pay it off. I admit that I believe in the tithe, but from my main job I haven’t been tithing. I tithe from my side job and child support when I receive it. But you are right. I am going to have faith. I am going to give God what is his and trust Him to provide the rest. I do a lot of needless things. Needless emotional spending, and used to be eating too. (I lost 35pounds recently) Something else I had to get very real about. Anyway. Thank you for sharing this.

    • says

      Hi Dee. Yes, you can totally do this! I am so glad to hear you are ready to put it all out there. You CAN do this. Pray about it. Pray for strength. Financial stewardship and stewardship of the body is connected since it’s all about taking care of what the Lord has entrusted to you. You get in debt dollar by dollar. You get out of debt the same way. Each dollar counts! Squirrel away every dollar you can!! Trust the Lord with all you have. He will provide. It’s seriously addicting to pay off the debt when you start seeing those numbers going down!! So stop the needless excess in your life, and give it to the Lord. Great job on losing the weight, too! God bless your stewardly endeavors!

  8. Sofia says

    Hi Sonja! I know this is an old post but I found IT yesterday on Pinterest. I have been thinking about paying back one of my student loans. We pay 312 dollars each month on our house loan. I have two student loans and the smallest one is 3750 and now my goal is to pay that one back. My big student loan is on 20 000 but has a low rate and I only have to pay on that one until I’m 65 y :). So big thanks for inspiring me all the way to the other side off the globe. /Sofia, from Sweden

    • says

      Hi Sofia. Thanks so much for sharing. Many blessings on your endeavors to get out of debt. You can do it! It’s dollar by dollar. It all counts!

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