Drowning in Debt (Part 1)

It was late 2014 – a big year for us full of college graduation, starting new jobs, getting married, moving to a new state, and more.   As crazy as it sounds, all of that was relatively low stress for us. In fact, we found those changes to be pretty easy to adjust to.  What threw us for a loop that year was the realization that we had to start paying back our student loan debt.

What we were facing:

  • 16 loans
  • $97,935 of loans that had grown to over $110,000
  • Interest rates of 3.5% – 12%.
  • Monthly payments of $1200 (more than I made in a month at the time)

I was sick to my stomach looking at all of this.  It was so stressful to see the numbers and to know that at our minimum payments we would be paying til at least 2024. Instantly we realized that our finances were not in good shape.  We made some changes like cutting some of our spending, getting ridiculously good at meal planning to cut grocery bills, and more, but we knew we needed help.

Someone mentioned Dave Ramsey to us, so we did some digging and found out that January 2015, there was a couple from our church who was leading a class called Financial Peace University.  It made me nervous to spend $100 to take this class, but it was our last ditch effort to find a way to get through the next decade that would likely bring more than insane debt payments, but hopefully some travel, buying a house, and starting a family.

Paying off debt seemed impossible

We started the class in January of 2015 with a “we’re so broke” mindset. We figured that we would probably have to move to a studio apartment, eat nothing but ramen, and never do ANYTHING fun for the next ten years.  During the nine week class, we realized some things we were doing a little backwards.  They taught us how to stay on track with our debt.  We learned that it would be possible to get out of debt sooner if we were truly focused, and we set some goals.  We learned that we could afford to stay in our apartment, and even travel some if we wanted.

Our goals set during the nine weeks were:

Our 8-10 year financial goals when we took FPU in 2015.

1) Pay off all debt by Christmas 2022.
2) Take a vacation at least once a year.
3) Have an emergency fund with 3 months worth of expenses.
4) Increase retirement savings to 15%.
5) Start saving for a car/house.

We set some big goals that we thought we would try to tackle over the next eight-ten years. We learned a lot!! The real question was whether or not we could maintain the intensity we had for the long run!  Only time would tell!

We’d love to have you follow our debt-free journey and connect with us here as you wait for Part 2 (coming soon)!   If you want to read more about our financial journey and experiences, you can do so here!