Photo: Screen shot of my home screen for my student loan servicer. As you will notice, the balance is zero!
After posting “Steps to Financial Independence: Step 3” yesterday, I decided to check my student loans. The last time that I checked the account, the loan balance was $17,734. Since, the teacher loan forgiveness program only forgives $17,500, I decided to pay it down to $17,500. So, today I logged in to check the balance and the balance was $0. I was so excited that I wanted to post another article, but I didn’t want to post two articles in one day. My goal has always been to not post on Saturday or Sunday to have a true weekend, but this news is so good that it required a special Saturday post!
So, 2 years, 1 month and 23 days after my wife and I got married, we are officially debt free. Here is the story of how we started out our marriage in debt and how we paid it off:
We paid off my car loan and the engagement ring over the next six months. We used the debt snowball. The debt snowball is a strategy where you pay off the smallest debt first and then use that payment to pay off the next smallest debt. This continues until all debts are paid off. My wife and I, placed the student loan last, due to teacher loan forgiveness. By December of 2013 our debts looked like the following:
In the next year, we paid off my wife’s car and took out some student loans to get the balance over $17,500. Our debts looked like this at the end of 2014.
At the beginning of 2015, we took $7,470 from our savings and paid the balance down to $17,500. The loan was still building up interest and by July 2015, the balance was $17,734. I set up a payment for August 3, 2014. This payment was $234 to knock the balance down to $17,500. I honestly don’t know when the balance was forgiven, but on August 7, 2015 I discovered that we were debt free!
We owe no money to anybody. We have no payments. We don’t have answer to anyone. Here’s to a nation of Americans reaching the debt free milestone! Get out there and pay off your loans and enjoy the freedom of no debt.