Starting off your Moustachian journey with Debt?

[keith]

Recently discovered the blog and I've been inspired to start my Moustachian journey towards financial independence.... but my journey includes a really annoying $35,000 wall of debt to bust through first.

I'm curious to hear about other readers tackling debt issues at the beginning of their journey.
I would love to hear your progress and success stories - lets help keep each other motivated!

My Breakdown:
7k in a car loan -> foolish I now know ;)
~28k in student loans.
0 in credit card debt (recently paid off, never to be used again).

My goal is to hit 100% debt free by the end of 2012. If I really flex some muscles, I should be able to swing that.

Can't wait to be Debt free!

[Skinnyneo]

Right after college I started with about 25k in student loans, 3k in credit cards.  That was about 4 years ago.  Along the way I picked up an 8k car loan.  I am now completely debt free.

The first year was pretty rough.  The exchange rate was pretty crap so for every 100 yen I sent back to the states I got about 70-80 cents.  This doesn't help when your trying to pay debt.  I tackled all of the credit cards first.  The credit card debt was half regrettable (just dumb stuff), and the other half necessary (expenses for moving over seas).  Looking back I could have saved tons on moving if I had had a more moustachian mentality.

Once those were done I concentrated on the student loans.  The exchange rate started to shift in my direction because of the real-estate implosion so now 100 yen was more like 1 dollar.  I did everything I could to hit my student loans.

Around my third year I came back to the states and my step dad had imported a car from Japan.  It was a 1999 Honda Prelude with, get this, only 20k miles on it!  The thing was in basically brand new condition, and my step dad is a mechanic so I trust him when it comes to cars.  He kept everything Japanese on it  (right side drive, etc.) and told me the car blue books for about 12k.  I told him that I wanted to buy it from him for 8k.  The deal was was that while I am in Japan he can use it (he has about 15 cars) but when I eventually move back, or when I visit, it's mine.  Seems like a good investment to me.

My fourth year the exchange rate has been scarely good.  Now 100 yen is about $1.30!  This has been great so I try to take on side job to send money home.  It really helped me tackle that car loan in about two months, and then just this last December I finished my student loans.  Without skipping a beat I still send money home to invest.

Moral of the story:  Live cheap, exploit your opportunities, and keep your chin up.  Your goal of being debt free sounds pretty lofty but I also don't know your situation.  I say go for it and never look back!

[arebelspy]

my journey includes a really annoying $35,000 wall of debt to bust through first.

...

My goal is to hit 100% debt free by the end of 2012.

Hey, if you can pay off 35K of debt in a year, you're well on the right track, and that "wall" of debt you're about to run through is made of paper.  ;)

It'll barely be a tiny speed bump on your Mustachian journey.

[Landor n Stella]

We're starting with:
$55,000 in Student loans, some subsidized some not
$6,000 in car loans
$0 credit card debt

And we currently have one income at $52,500 before taxes. So we are hoping for the end of 2013 or 2014 to be debt free.
There are some really good debt spreadsheets on the web if you do a search. They are very helpful for laying out everything you owe, and pinning down how much extra you need to pay to become debt free. And the one we use has a place where if you make an extra payment above the monthly amount you can type that in independently.
Although it sucks to have to start out with so much debt, I figure that by the time we are done paying off loans we will be really good at the Mustachian ways, and becoming FI will be no big deal. ~Stella

[arebelspy]

I figure that by the time we are done paying off loans we will be really good at the Mustachian ways, and becoming FI will be no big deal.

What a great attitude!  So many people get overwhelmed with debt and give up, and then end up accruing more debt.   I like your style.

[Mike Key]

I was in about $6,000 worth of CC debt and living paycheck to paycheck in 2007 when I discovered my first two finance blogs, The Simple Dollar and Get Rich Slowly. That started me down the Mustachian path of spending less than you earn and achieving personal freedom. I experimented with side businesses and did everything I could to pay off my debt.

FI is pure bliss. When I reached it, I spent 3 months doing something I always wanted to do. Traveling the US, exploring national parks and rock climbing. Most fun of my life. It took a lot of sacrificing to get there. But in the end it was worth it.

I'm a traditionalist, so when I got married I accepted my wife's debt. She was a lot like me, no one ever explained how to handle your money, and debt was considered normal. The last two years of our marriage we've been on this journey back to FI.

Together we paid off $8800.00 worth of credit card debt, saved up a $9000.00 emergency fund, and now we are tackling the last debt challenge, a 175K student loan.

I can tell you all, sometimes it really can seem unsurmountable. I actually did the math on how long it would take to pay off making the regularly scheduled payments and it made my heart sink. I'm 29 and my wife is 27. She'd be 54 yrs of age by the time she paid it off if she makes the minimum payments. And she'd end up paying well over 200K worth of interest.

Our goal isn't set 100% in stone just yet. As we recently moved and have been adjusting areas of our budget to a new city. But we do know we want to tackle and pay this loan off within the next 3 years. We hope to put a full plan in place come June, after we've sold both cars and are more certain of our living arrangements.

Press on folks. It's all possible!

[MEJG]

Me

I've been interested in money and finances all my life (setting up my first bank account as a young child is one of my favorite memories of me and my dad).  I started a Roth when I got my first job as a teenager.  I got through college with no debt.  Then I went to graduate school.

I finished this December and I am currently job hunting.  My first loan payments are due at the end of May.

Looking back I could have worked more in college, 2 yrs between college and  during the first three years of grad school.  I could have been MUCH more frugal all the way through.  I was still saving, and didn't have debt, and contributed $15,000 to my Roth by the age or 23 so I thought I was doing well.    I suppose I take some comfort in most of my peers financed their entire grad education and have about $300,000.


My breakdown

$140,000 in student loans - sub, unsub, and one grad plus.  Interest rates from 6.8% the majority to 7.9 (25,000 or so)

No other debt at this point.

I (I'm 28) have a Mr. MEJG (30) and a Mini MEJG  (almost 2yrs).  We moved back to the states from overseas when I finished my grad program so we're reestablishing a US household.  This is hard, but also great as we are starting fresh and can create a simple Mustacian life for ourselves without ingrained habits and clutter.

I have one offer and two more job prospects.  Salary with be $65-70,000 +/- production based bonuses depending on the job I take.  Mr. MEJG is also job hunting and will most likely be making $50-60,000.

We have a little bit of a cushion from moving which will go toward a new to us reliable car (Probably a toyota matrix, which we will hopefully not finance any of). 

Goals

Live on $3,000 or less per month (including housing and childcare - may not be able to depending on child care options due to job locations)

Create a 3 month ($9,000) emergency fund - since we don't have springy debt availible

Utilize employer match if either job has one

Throw every last penny into the student loans - pay them weekly to decrease compound interest.  I REALLY want to be putting $1,000+ into the loans a week.  I'm going to take advantage of the direct loan consolidation special that ends in June and consolidate my loans into 3 so I can lower my interest rate but not have just one loan.  This way I can pay off in chucks and decrease my monthly minimums.

Once student loans are at a more reasonable level ($50,000) then think about a down payment fund (maybe). Since the housing market such a buyers market.

[Guitarist]

I have just over $4k in CC debt right now, all still under the introductory period of no interest.
One of them will be paid off next month (been making $1.1k payments on it to meet the deadline, it will be SO nice have that extra money not going to a payment in April), the other's have until August before they need to be paid off (though I plan to have them done sooner then that). And from here on out I don't plan to get another credit card. Maybe if I decide to start a business one day I might reconsider for rewards reasons, but I don't plan to spend enough anymore to get a lot out of them.
I had about $2.5k in student loans that I paid off right away, and that was a great feeling.

Once the CC's are paid off, I will be putting money away. First maxing out the roth IRA, then raising what I put into my 401k, then putting some away to save for a house. 2012 will be a liberating year.

[Mike Key]

My breakdown

$140,000 in student loans - sub, unsub, and one grad plus.  Interest rates from 6.8% the majority to 7.9 (25,000 or so)

No other debt at this point.

I (I'm 28) have a Mr. MEJG (30) and a Mini MEJG  (almost 2yrs).  We moved back to the states from overseas when I finished my grad program so we're reestablishing a US household.  This is hard, but also great as we are starting fresh and can create a simple Mustacian life for ourselves without ingrained habits and clutter.

I have one offer and two more job prospects.  Salary with be $65-70,000 +/- production based bonuses depending on the job I take.  Mr. MEJG is also job hunting and will most likely be making $50-60,000.

Goals

Live on $3,000 or less per month (including housing and childcare - may not be able to depending on child care options due to job locations)

Create a 3 month ($9,000) emergency fund - since we don't have springy debt availible

You're situation is very similar to ours. My wife is the one with the Masters, and we are lucky she landed a job right out of graduation. She's in a very secure and stable field currently at the 70K mark with the average person in her career making 6 figures after 5 years.

Living on $3,000 a month is totally do-able, as we're doing that and trying to shave down more and more right now so we can tackle her student loans which are just a wee bit more than yours. But our interest rates are the same.

Good luck man, it's all do-able.

[adam]

Someone mentioned spreadsheets so I figured I'd post the one I use for planning:
http://www.vertex42.com/Calculators/debt-reduction-calculator.html

I also have one that tracks actual balances/payments.  $110,841.35 to go not counting 2 mortgages ($356k, both under water) :(

I think I calculated that if we never changed our lifestyle beyond getting rid of the various debts, we would put away $44-50k a year easy.  Its so far away though.

[MEJG]

Living on $3,000 a month is totally do-able, as we're doing that and trying to shave down more and more right now so we can tackle her student loans which are just a wee bit more than yours. But our interest rates are the same.

Good luck man, it's all do-able.

Oh I know :-)  It's doable I just want to be 'Stach building now darn it!  The $3,000 a month would be totally doable with 2 people, it's the kidlet that makes it difficult.  In order to pay down aggressively we need to both work - so Kidlet needs childcare which is looking to be about $1000 a month depending on which job I am offered/take. 

Good luck to you too!  We should keep up on each other for encouragement.

[keith]

I figure that by the time we are done paying off loans we will be really good at the Mustachian ways, and becoming FI will be no big deal.

What a great attitude!  So many people get overwhelmed with debt and give up, and then end up accruing more debt.   I like your style.

Totally agreed. Once you are finished with the debt you have the momentum already going to reach FI without much extra work.

[keith]

my journey includes a really annoying $35,000 wall of debt to bust through first.

...

My goal is to hit 100% debt free by the end of 2012.

Hey, if you can pay off 35K of debt in a year, you're well on the right track, and that "wall" of debt you're about to run through is made of paper.  ;)

It'll barely be a tiny speed bump on your Mustachian journey.

Based on my stats, I would have to really blow it to not achieve this by the end of the year.

I'm 27, single, no kids. I currently make around 90k a year (my base pay). I also will be receiving a bonus from work sometime this year for about 10k.

After crunching the numbers it looks like I will need to pay about $2500 per month on top of my minimum payments to reach the goal.

The one thing holding me back is my cost of housing... currently renting a place with my brother and rent/utilities come to about $1600 a month. Ouch! Not moustachian at all, what was I thinking????. I'm stuck in a lease and as soon as its up this summer I will be moving myself into a small studio apartment for significantly less.

[velocistar237]

My wife and I started off with about $120K in school debt. Unfortunately, the job market tanked right before she graduated, so we are a single-earner family for a while. In the past five years, we've knocked the debt down to ~$50K while putting together a down payment and saving a bit in both retirement and non-retirement accounts. The student loans have really low interest rates, most less than 4%, so we aren't paying them down very fast. The highest interest rate loan remaining has $13K left in it, and after that, we'll prefer saving to paying down debt. We have a 15-year mortgage, so we're already paying that down ahead of the typical schedule.

[HumanAfterAll]

I also started this journey with debt.  Bad decisions in grad school (unemployed / depressed girlfriend, took out loans to cover her share of living expenses...) started me off 80K in the hole in 2006.  Got a dream job but after a couple of years my net worth was making no forward progress (but I had a lot of shiny toys!). 

Eventually I learned to pay myself first and really work on that debt, and started investing (VFINX) as well.  With some inspiration from MMM I'm putting 58% of my gross pay into savings or debt payoff. Things are looking good, I passed Net Worth Zero in 1/2011 and I'm on track to be completely debt-free by 12/2012!   

On top of my improved financial situation, I have a growing sense of security as I abandon lifestyle expansion, and embrace DIY.  I love fixing my bikes and my car, and now I have more incentives to keep maintaining them, instead of jumping on the upgrade cycle like the rest of the world.  As an extra bonus for a curious engineer, I'm learning a lot by taking on new projects (house repair) that my previous self would have outsourced.

Viva la MMM!

[Nancy]

I'm in!

I have about $46K in student loan debt, which I will pay off in 20 months. I have no other debts, and my lifestyle is already very frugal. I'm putting 75% of my take home pay toward my loans. I still want to try and pay it off sooner than 20 months.

[fruplicity]

We're starting with:
$55,000 in Student loans, some subsidized some not
$6,000 in car loans
$0 credit card debt

And we currently have one income at $52,500 before taxes. So we are hoping for the end of 2013 or 2014 to be debt free.
There are some really good debt spreadsheets on the web if you do a search. They are very helpful for laying out everything you owe, and pinning down how much extra you need to pay to become debt free. And the one we use has a place where if you make an extra payment above the monthly amount you can type that in independently.
Although it sucks to have to start out with so much debt, I figure that by the time we are done paying off loans we will be really good at the Mustachian ways, and becoming FI will be no big deal. ~Stella

Stella I would love to hear more about your plan to achieve this! You'll be able to send more than 50% income for the next year and a half to your debts!? Wow!!

I need some pushing/direction in this department. Like some of you I consider my and my partner's finances (income & debt) to be one in the same. We're 30 and here are the stats:

$42000 student loans
$105000 take home pay (up from $72000 recently)

$30000 retirement balance
$15000 short-term savings

Sounds like it'll be a breeze, right? Well -
1) We live in a high cost of living area and are not likely to move due to family.
2) Partner is not as "on board" with the MMM/FI lifestyle as me.
3) We also have a dog and enjoy traveling, which we are not willing to give up for faster FI.
4) Our current overspend categories are groceries and alcohol (staying in and enjoying high end wines/beers, not partying) which I'm working on
5) There are other goals we want to move forward with in the next 1-3 years around family planning (including moving to a better apartment and reducing work hours) and replacing our 12-year old car (paying cash of course - no more than 10k).

I hate sounding like I'm full of excuses!! Grr.

It's hard for me to prioritize, which I hope is where you all can help. Based on our current spending we're putting 30% take-home pay toward our goals. But I always question how to distribute it? Currently we're 10% short-term savings, 12% debt, and 8% retirement.

I think my overall goal is more financial flexibility forever, not necessarily speeding to the FI finish line.

Any feedback? Thanks!

[fruplicity]

Upon further review, my percentages are a bit off - It's actually 41% income going toward debt repayment and savings:
15% short-term savings
18% long-term/retirement savings
8% debt payoff

It's obvious to me now that we need to boost the debt repayment quick! With a great debt "avalanche" spreadsheet I found, looks like we could pay it off in 3-4 years. WAH-hoo!

[Miyazaki]

Fruplicity - You said your take home pay is 105000, your debt is 42000, and you have 15000 in savings, with an overall 41% savings rate. If I were you, I would spend all of my savings on the debt, thus reducing it to 27000, then continue to spend the whole 41% on the debt, making you debt free in a mere 7.5 months! After that, you can build up an emergency fund again, and continue putting most of your savings percentage toward your retirement fund. If your job is stable, and you're happy with your lifestyle spending 59%, then I don't see any problem!

[fruplicity]

Thank you Miyazaki, this is why I love this website/way of thinking - it keeps opening my mind to the possibilities!!

After reviewing my homemade spreadsheet (= very "rough") I miscalculated our retirement contributions so our total non-spending income is 39%, not 41%. Also 7% of retirement is matched so it's untouchable. Also I'm psychologically/emotionally averse to emptying our short-term savings, though I could deal with lowering it to 5000.

Based on my very rough math, this still means my original 3-4 years debt repayment could be reduced to 2 or a little less! Excellent!!!

[keith]

February Win - sent an extra $2600 towards my debt this month. (Ammount paid beyond my monthly minimum payments)

[Nancy]

February Win - sent an extra $2600 towards my debt this month. (Ammount paid beyond my monthly minimum payments)

Well done, Keith! I just made my March payment of $2065 (rest will be taken via auto payment for lower interest rate). Let's see if we can beat our February payments this month by cutting in other areas. Then report back. Sound good?

[keith]

February Win - sent an extra $2600 towards my debt this month. (Ammount paid beyond my monthly minimum payments)

Well done, Keith! I just made my March payment of $2065 (rest will be taken via auto payment for lower interest rate). Let's see if we can beat our February payments this month by cutting in other areas. Then report back. Sound good?

Nice! Yeah I'm up for the challange. :)

[old_man_m]

I like this thread. We have $25,000 in student loans in my household, plus a mortgage. One kid on the way. BUT I've recently gained the ability/comfort level to send around $3000/month to the student loans. My challenge is paying off the student loans by the end of 2012 while also increasing 401k contributions and participating in my employee stock-purchase program (15% discount on the lowest price of my company's stock over a set period of time).

Daycare will become an expense in September, but I think I can still power through it!

[sideways8]

Ugh, I have $97,723.42 to go on my mortgage (interest rate is 4.879%). Then I have just under $500 yet on my credit card but not for long! I got into a bad spending habit after a bad breakup last year but I'm getting my butt back on track in just about every way. Oh, and I am still paying off a loan from my parents ($3767.5 left) that helped me buy my grand piano for my home studio (at the moment this brings in a couple hundred dollars, woo!).

My employer automatically contributes 12% to my 401K without me having to put anything in so I've had that going for the last 5 years and will finally be contributing some of my own money to that this year (despite our insultingly low raises) as well as starting a RothIRA.

I'm totally pumped for early retirement and am itching to prove everyone wrong! Of course the naysayers are usually the ones dumping their money into fake nails, expensive cable TV packages, and financing new cars at the drop of a hat. Muahahahaha!

[MEJG]

Started my new job and got my first paycheck!!

What did I do? I stared in on my student loans.  $1,000 to the ones at great lakes to get started, and $3,700 to the ones at ACS to pay off all of the interest I've accrued.  This spent my paycheck.... and took money out of the e-fund we'd been maintaining since I was jobless.

Next week I use the special direct consolidation program to put the loans at ACS under greatlakes.  It will put me in repayment to the tune of $137 or so a month, but lower my interest rate by 0.5% and start getting after those loans.

My goal is to have all of interest paid off (another 6,000) before the rest of the loans come into repayment at the end of May, so it won't capitalize.

[arebelspy]

It's so encouraging to hear people working their plan to get out of debt or build their 'stach.

Thanks for sharing MEJG and keep it up.  Awesome! 

[Landor n Stella]

Stella I would love to hear more about your plan to achieve this! You'll be able to send more than 50% income for the next year and a half to your debts!? Wow!!

Hi Fruplicity!

Yes, we will be able to send about half of our income to debts. Even thought we have a combined income of about $55,000 (pre-tax), we live in a very cheap area of the country. Rent on a 4-bedroom house is $550, and we rent out two bedrooms to a fellow student, taking our housing costs down to $275/month plus utilities.

We don't have cable ($8/mo Netflix FTW!). We eat quite cheaply- see my post on how we save on food in the "Share Your Badassity" forum. Soon we will get out of the Verizon cell phone contract that sucks away over a thousand dollars per year. We live 2.5 blocks from my work building and 3 blocks from Landor's. We just sold our car #2, so now we are a 1 car household, and only drive it infrequently (side note on this- I called our insurance when we moved close to our works, and they knocked $360/year off our car insurance. It took less than 10 minutes on the phone with customer service. I will call them again this week after the 2nd car is sold and it should go down more). We do some freelance and consulting that brings in a little bit more income that goes to paying off student loans. We play board games with friends instead of going out to eat or to the movies.

We live a very simple but happy life. WAY happier than we were at first, when we were first married and not making much money and one of us was a shopaholic *ahem Stella ahem*. So I am proof that someone who is not on board with Mustachian ways can be converted. It just takes work, and lots of honest talking about what we value, and also honest looks at the state of the finances.

~Stella

[skandrae]

I currently have about $19,000 remaining on my truck - I know that everyone says new vehicles/financing are not worth it, but I live in a very remote town with no public transportation options to get to the nearest city. I travel to Whitehorse once every two months or so to do a massive grocery/shopping trip, and the road between here and there is often very isolated with no cell reception. I made the decision to buy a new vehicle with the intention of driving it until it dies of old old age, because I am not mechanically inclined, and there is not a mechanic in my town.

So, that's my debt. I'm look at seeing if I can make any additional payments on the loan, but I am not worried if I can't. I'm working on increasing my savings (currently saving 20% after taxes, which doesn't include my pre-tax deduction of 7% which is matched by my employer), cutting out any fripperies, and growing the most awesome 'stache I can ^_^

*I should add - I didn't have a vehicle when I moved up here in 2009, and I used the remainder of my relocation money to make the downpayment. If I'd had more time between getting the job up here and moving, I could have put together a better downpayment, but I wasn't really in the Mustache Mode back in late 2009/early 2010.

[wilk916]

Yes.  A mountain of it...

Mortgage: $434k (3.875%)
Student Loans: $71k ($15k @ 2%, $33k @ 3%, and $23k @ 6.8%)

[trammatic]

Those spreadsheets are great...  Typing my numbers in currently gives an 8-year debt free timeframe.  Now the fun to see how I can ramp up repayments.

[Mactrader]

Oh, loads of it.

I started really attacking it in December of 2011, so here's my progress:

December 2011
Credit Cards / 0% Store Cards: $8.7k  (we used credit cards as our monthly spending, never carried balance. $4.4k of this was the Nov CC)
Medical Bills: $2.2k
Unemployment payback to State: $3k (wife took U/E years back and they said she didn't qualify long down the road...)
Auto Loans: $20.5k
Student Loans: $39.7k
Mortgage: 222k
Rental home mortgage: 153k (not in the real estate business, underwater and couldn't sell when I got a new job)

Paydown at month end: $6.1k
Got real aggressive, switched to debit and started budgeting for all of our spending. Was a three paycheck month so it was a good month to switch due to having to pay both months expenses from stopping the use of the CC.

March 2012
Credit Cards / 0% Store Cards: $0
Medical Bills: $0k
Unemployment payback to State: $2.7k (wife took U/E years back and they said she didn't qualify long down the road...)
Auto Loans: $18.5k
Student Loans: $39.2k
Mortgage: 220.5k
Rental home mortgage: 152k

Paydown since start: $12.5k.

I received my annual bonus in March, have taxes coming at the end of this month and an unexpected $1k coming my way. I'm trying to buy a cheaper/older car right now and will sell my daily driver. That'll wipe out $7k of the auto loan, and free up about 4-5k to be used on the other loans, another 6k that needs to be applied still from the cash from the bonus/taxes/etc.  I SHOULD be out of non-student loan debt in a month or two if I sell my car for a good price. The lease is up on my rental in June 2013 and the tenants want to buy it. The principal payments should reduce the balance to a point I can sell it, but may have to use my bonus/taxes to pay for realtor fees and any gaps in value that will slow my student loan paydown. Think I'm forecasting 2014 for those suckers to be totally gone. The plan I have, which doesn't include any income from the side business I'm spinning up, has me totally debt free in 2020. That doesn't include any wage/bonus inflation, surprise income, or reduction of expenses. We need to get to work!

[keith]

February Win - sent an extra $2600 towards my debt this month. (Ammount paid beyond my monthly minimum payments)

Well done, Keith! I just made my March payment of $2065 (rest will be taken via auto payment for lower interest rate). Let's see if we can beat our February payments this month by cutting in other areas. Then report back. Sound good?

OK all my payments have been made for March. I personally felt it was a crappy month - way too much spending all around... but I still managed to pull out ahead. I did make some budget cuts in other areas so it all evened out.

March debt removal (beyond minimum payments): $2,774.00

I feel I can easily hit 3k next month.

How's it looking for you so far?

[James]

We started with a $20k LOC, $5k car loan, and $40k in student loans two and a half years ago.  The LOC and car loan have been paid off, and the student loan is down to $32k.  I've also got $20k saved up in case we need to short sell our house in order to down size, but if we don't need the money for that then we'll be able to pay off the student loan faster.

My goal is to be debt free by the end of 2012 and I'm on track to get there if I can sell my damn house.  If not I'll be debt free except for the mortgage anyway...

[naija]

I'm starting off my journey with ~120K in student loan debt from business school.

I just graduated last May and back then it was up to $160K so I've come a long way even since almost a year ago.

Salary: 120K
Bonus: 5-10K (annually)
Debt: 120K only from student loans (6.8 - 7.9% interest)

I moved back home to live with my parents to help with paying back my debt and also because I may be moving to the West Coast to be with my boyfriend - we'll see about the latter. Living at home has been a god-send and I'm currently plugging 5,500 - 5,800/monthly to reduce my debt.

I also have no other real expenses. I have no car and my company even pays for my high-priced smartphone bill. I travel for work every week and only spend money on my lunch - as breakfast and dinner are covered.

At this rate I will be debt free by February 2014. But I plan to allocate every additional cash from bonuses, tax returns (yeah, this is probably the last year I'll even get a return) to this debt so I'm hoping for December 2013. Wish me luck!

[MEJG]

March student loan payments = $5,700

April will bring special direct loan consolidation for 1 loan, and a CC balance transfer of 8,000 that will go toward the student loans.  I should have all the accrued interest payed before May 30th when all the loans go into repayment.

With my job I should be able to put $2,000 (+/- 300) into the loans a month.  Once Mr. MEJG starts working (hopefully soon!!!!) we'll be living on his income and putting $4,000 a month into the loans.

[Nancy]

February Win - sent an extra $2600 towards my debt this month. (Ammount paid beyond my monthly minimum payments)

Well done, Keith! I just made my March payment of $2065 (rest will be taken via auto payment for lower interest rate). Let's see if we can beat our February payments this month by cutting in other areas. Then report back. Sound good?

OK all my payments have been made for March. I personally felt it was a crappy month - way too much spending all around... but I still managed to pull out ahead. I did make some budget cuts in other areas so it all evened out.

March debt removal (beyond minimum payments): $2,774.00

I feel I can easily hit 3k next month.

How's it looking for you so far?

Awesome job, Keith! You completely rocked March! I sent $2,418 toward my loan in March. Unfortunately, I was a bit of a spendthrift in the eating out category. I'm going to rein that in for April, and my goal is to hit $2,600. We'll see how that goes! Good luck this month. Let's crush it!

[MEJG]

Today I paid off the last of the accumulated interest on my student loans.  Two whole months before they went into repayment.  It feels FUCKING AWESOME.

Next goal is the $25,500 in grad plus loans at a 7.9% rate, in 6 months.  This gives me 2 months to focus on the goal and then 4 months on minimum payments on all the loans + extra to principle on the grad plus loans.

This major headway has inspired Mr. MEJG who was going along with my plans, but could not see the end in site so was not terribly enthusiastic.

[arebelspy]

That's awesome, MEJG.  Even better is the inspiring the significant other.  That'll pay dividends in the future, I'm sure.  Way to go.

[Nancy]

Today I paid off the last of the accumulated interest on my student loans.  Two whole months before they went into repayment.  It feels FUCKING AWESOME.

Next goal is the $25,500 in grad plus loans at a 7.9% rate, in 6 months.  This gives me 2 months to focus on the goal and then 4 months on minimum payments on all the loans + extra to principle on the grad plus loans.

This major headway has inspired Mr. MEJG who was going along with my plans, but could not see the end in site so was not terribly enthusiastic.

Way to crush it! Thanks for the inspiration!

[keith]

April numbers are in. My earlier estimate of "easily doing 3k" was way off. I actually did worse then last month. Way too much spending that I could have controlled (concert tickets, over spent on resturants).

April Debt Reduction: $2657.76

I'm still going to set my goal at 3k, but its actually a lot more difficult then I thought.

[arebelspy]

April numbers are in. My earlier estimate of "easily doing 3k" was way off. I actually did worse then last month. Way too much spending that I could have controlled (concert tickets, over spent on resturants).

April Debt Reduction: $2657.76

I'm still going to set my goal at 3k, but its actually a lot more difficult then I thought.

I think that's a pretty encouraging number! If you were able to do things like buy concert tickets and eat out a lot, and still reduce debt by about 2600, only $100 less than last month, then you're doing some things right in some other areas! Now when you have a month where you don't spend like this month, you should be able to get that $3000 goal.

[CNM]

Starting in debt sucks.  I started being frugal several years ago to pay down debt and I'm finally seeing the light at the end of the tunnel.  Here's my story.

I graduated from law school with $60,000 of student loan debt.  YIKES!  Despite what television tells you, the vast majority of attorneys out of law school do not suddenly start raking in 6 figure salaries.  It's a well-paying profession, sure, but it takes time to develop.  Anyway, for the first few years working I paid as much as I could toward the debt but it was really only when I got the principle down to $33K in that I really started making progress.  I was able to pay it all off in 14 months.  For the past few months, I have not had to make student loan payments and the financial freedom is completely liberating!  I mean, what the hell do I even do with an extra $1-$2K PER MONTH?!?  It's great.

But, as a family, we still have debts to pay.  My spouse still has about $25K of student loans and we have a home mortgage, too.  Spouse is also way frugal- more than I am really- and he has a very good handle on it.  We're trying to kill the remaining student loan debt so that's where my monthly "surplus" is going for the most part. 

I contribute to my 401(K) and to a Roth IRA (this year will be the first in a long time that I will reach the $5K max! yay!) but I can't wait until we have enough surplus to really get some investments going.   This is a great thread with all of the debt repayment successes!  Way to go everyone!

[keith]

April numbers are in. My earlier estimate of "easily doing 3k" was way off. I actually did worse then last month. Way too much spending that I could have controlled (concert tickets, over spent on resturants).

April Debt Reduction: $2657.76

I'm still going to set my goal at 3k, but its actually a lot more difficult then I thought.

I think that's a pretty encouraging number! If you were able to do things like buy concert tickets and eat out a lot, and still reduce debt by about 2600, only $100 less than last month, then you're doing some things right in some other areas! Now when you have a month where you don't spend like this month, you should be able to get that $3000 goal.

Ha, good point! When I take a step back and think about it - overall I'm still doing really well. I am still on-track to meet my long-term goals anyway.

[keith]

Starting in debt sucks.  I started being frugal several years ago to pay down debt and I'm finally seeing the light at the end of the tunnel.  Here's my story.

I graduated from law school with $60,000 of student loan debt.  YIKES!  Despite what television tells you, the vast majority of attorneys out of law school do not suddenly start raking in 6 figure salaries.  It's a well-paying profession, sure, but it takes time to develop.  Anyway, for the first few years working I paid as much as I could toward the debt but it was really only when I got the principle down to $33K in that I really started making progress.  I was able to pay it all off in 14 months.  For the past few months, I have not had to make student loan payments and the financial freedom is completely liberating!  I mean, what the hell do I even do with an extra $1-$2K PER MONTH?!?  It's great.

But, as a family, we still have debts to pay.  My spouse still has about $25K of student loans and we have a home mortgage, too.  Spouse is also way frugal- more than I am really- and he has a very good handle on it.  We're trying to kill the remaining student loan debt so that's where my monthly "surplus" is going for the most part. 

I contribute to my 401(K) and to a Roth IRA (this year will be the first in a long time that I will reach the $5K max! yay!) but I can't wait until we have enough surplus to really get some investments going.   This is a great thread with all of the debt repayment successes!  Way to go everyone!

Awesome! good to hear about your progress. Regarding that "extra" money every month, its going to be so awesome to funnel all of that into savings and investments once we are all debt free. This is what helps keep me motivated.

[gecko10x]

Just found the blog a week or two ago, and it has inspired me to try harder to reach FI.

Here are our starting debts (in theory, assuming we sell our current house, and with the new mortgage numbers):
Mortgage: $200k ($942/mo) @3.75%
VW Rabbit: $7600 ($293/mo) @6%?
CX-9 lease: $411/mo (1yr left)
Student loans: $40k ($240/mo) @2.85%

Clearly, we will be working on the cars first. My current plan is to get the VW paid off before we have to turn in the CX-9, because we will need to replace it with something comparable (which, unfortunately, means another loan). If we can get the VW paid, then we should have enough cash flow to do a quick 3yr loan for the new vehicle.

THEN, we can start working on the other debts... but I haven't fully decided if we will want to pay those last two down since they are at such low rates...

[Nancy]

April numbers are in. My earlier estimate of "easily doing 3k" was way off. I actually did worse then last month. Way too much spending that I could have controlled (concert tickets, over spent on resturants).

April Debt Reduction: $2657.76

I'm still going to set my goal at 3k, but its actually a lot more difficult then I thought.

Still a solid performance, Keith. One thing that has really worked for me is that my student loan (way over)payment is the first thing I pay every month. So, I pay my $2,418 on the first of every month, and then for the rest of the month, I make it work with the money I have left (I get paid monthly, and I have a $500 cushion in my checking account for emergencies; although I've never dipped into it). I noticed when I tried to set a goal  that depended on paying extra at the end of the month, something would always come up (an extra dinner out, etc.). Not saying this way will work for everyone or that you should even try it, but it works for me.  Regardless, you're crushing it. Well done!

[keith]

Hmmm yeah thats a totally different strategy then I have now. I'm doing the "take the leftover cash at the end of the month and throw it at the wall of debt" method. I can see how switching things up might help. I will do some more thinking about this...

[Phundit]

Still a solid performance, Keith. One thing that has really worked for me is that my student loan (way over)payment is the first thing I pay every month. So, I pay my $2,418 on the first of every month, and then for the rest of the month, I make it work with the money I have left (I get paid monthly, and I have a $500 cushion in my checking account for emergencies; although I've never dipped into it). I noticed when I tried to set a goal  that depended on paying extra at the end of the month, something would always come up (an extra dinner out, etc.). Not saying this way will work for everyone or that you should even try it, but it works for me.  Regardless, you're crushing it. Well done!

This is how I kicked the crap out of my student loans--making big fat payments is/was part of my budget, before any "free" or "flex" money. I'm working with a friend who's struggled with money all his life; he keeps talking about saving, but something comes up every single time and he runs out of room in his budget. Things like direct deposit and automatic transfers are your friend when it comes to saving/killing debt. Keep up the good work!

[CNM]

That's a great idea.  Too often I find myself justifying a smaller payment to debt or to my investment account because "things come up."  Not this month.  This is my personal Maximum Mustache May.