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How We're Paying Off $117,000 of Student Debt in Three Years

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By Jen Hayes for The Penny Hoarder

The second our  wedding  was over, my husband and I started saving for a down payment on our first home. We were excited about the prospect of being homeowners and couldn’t wait to move out of my parents’ basement.

However, after running the numbers, we realized buying a home at this point in our lives would be a terrible idea because of our massive  student loan debt .

When we got married shortly after I finished graduate school and he finished his bachelor’s degree, we knew we both had high student loan debt. But neither of us had done a good job of tracking  exactly  how much debt we had accumulated. When we realized we owed a combined total of $117,000, we felt overwhelmed and anxious about our future. So we put our plans to  buy a house  on the back burner, and made the decision to pay off all our debt in just three years.

Why We Decided to Pay Off Our Debt Sooner Rather Than Later

We considered multiple options. We thought about lowering our monthly payments by extending them over 20 years. But we knew that with that option, we’d end up  paying more than  double  what we owed . Compound interest is a nightmare! We also thought about staying on a 10-year payoff plan. But even then, we would pay more than $30,000 in interest. Our monthly payments would remain as high as a mortgage at $1,400 per month.

With either option, we wouldn’t be able to afford savings, a  retirement account  or an  emergency fund . If an unexpected issue came up, we would likely put it on a credit card and become trapped in an endless cycle of debt.

We needed to find a better way. So, inspired by  Dave Ramsey’s debt snowball approach , we committed to paying off our loans in just three years. This method isn’t easy—it requires hard work and sacrifice. But it will be well worth it.

Here are the steps we’re taking to finally get out of debt.

Related: Snowball? Avalanche? What’s the Best Way to Pay Off Your Debt?

1. We made a debt repayment plan .
I was wrong. My first job after grad school paid so little that 50 percent of my income went toward my student loan payments. I spent a lot of time wallowing in regret, wishing I had made smarter financial choices. But I soon realized obsessing over my debt wasn’t productive. What I needed to do was take action. Combined, my husband and I pay $1,200 per month on our loans. To boost our debt payoff, we try to pay an additional $1,500  each  on our own loans every month. While we have a joint savings account, we make payments on our own debt from our personal accounts. This isn’t always possible, but we still throw as much extra as we can toward our loans.  We’re able to do this because we side hustle and scrimp like crazy. 2. We found ways to make more money.
My husband side hustles as well. He does freelance graphic/web design projects and works part-time as an assistant wedding photographer. Related: 25 Ways to Turn Your Interests Into Income Together, our combined annual gross income is about $90,000. We have a small  emergency fund  of $1,000 and no other debt. And we’ve put saving for retirement and other funds on hold until we’ve finished paying off our student loans. 3. We practice extreme frugality.
I don’t spend any money on dinners out or other fun activities with friends. The hubby and I still get together with friends often, but we have found  free things to do for fun . We also don’t have car payments because we both drive old cars we’ve already paid off, and we plan to keep driving these cars as long as possible. Related: 15 Simple Ways to Save (Without Being a Social Recluse) 4. We live with my parents.
The easy choice would be to switch to a 25-year repayment plan on our student loans and buy our own home. It would be much more enjoyable than our current living situation. But it wouldn’t be smart. We’re one year into our debt payoff journey, and we have paid off about $30,000 so far. The sacrifices we’re making now will be well worth it when we finally attain financial freedom. This post originally appeared on The Penny Hoarder . More From The Penny Hoarder: