“Shoot for the moon and even if you miss you’ll land among the stars.” That was my attitude when we set our goal to pay off over $130,000 of law school student loan debt. I wasn’t sure how it would happen, but I knew that by setting an audacious stretch goal we would end up in a much better place than if we had just tried hard.
When we were deciding on our goal, we didn’t do so based on the numbers. I had suggested five years, but my husband said, “That’s too far away… Let’s say three years.” I was eager to be debt-free too, and the sooner, the better. And so in September 2013, we set our big goal to pay off all of our debt by the end of 2016 (a little more than three years).
It looked very much impossible on paper. At the time, my husband was making $39,000 (pre-tax) and I was bringing in some side income with my Etsy shop. When I calculated how much we needed to pay each month to be on track to reach our goal on time, it was over $3,000, about the same as our total take-home pay!
That is where faith comes in. We trusted that in those three years we would be able to find ways to increase our income. We have, and we have been blessed tremendously!
If you read our last monthly budget update and you know how we make two payments each month, this will come as no surprise. Since we live on last month’s income, at the beginning of July all of our income from June became available to budget. In June, our income was the biggest it has ever been. We made our final debt payment at the beginning of July!
We did it! We’re done! We are debt-free!
Zero has never looked or felt so good! It’s pretty surreal.
In total, we paid $144, 064.
Because I think graphs are fun to look at, here are a couple I put together. If there are any others you’d like to see, just holler!
The graph below shows our income each month along with the amount we paid in debt that month. Keep in mind that we live on last month’s income, so we use June’s income for July’s expenses/debt payment.
The next graph shows our cumulative debt repayment over time. I like that steep slope over the last six or seven months.
I thought it would be fun to give you a timeline of highlights too. Here are a few that stand out:
May 2012— Mr. SixFiguresUnder graduates with a JD and MBA (4 years of school) with debt totaling somewhere over $130,000. I don’t know the exact figure because I was afraid to look at the actual number back then.
November 2012— We are on an income-based repayment plan so we don’t have any payments due, but we decided to pay off the smallest loan of $4,000 with money from a CD that had just come up for renewal and happened to be about the same size as the loan. At this point we are still saving for a house and planning to buy one before paying off student loan debt.
May 2013— After reading The Total Money Makeover, which I found at the thrift store, we talk about changing our financial plans. We decide to make paying off student loans our financial priority even though we really (really) want to save for a house. We prove it by putting all the money we had earmarked for a down payment, over $17,000, toward our student loans.
June 2013— We pay nearly $8,000 toward our loans after gathering together all the money we have sitting in different accounts. Some of it we have been holding onto since just after law school, since we weren’t sure if my husband’s job would be strictly commission or not.
September 2013— I start Six Figures Under to document our debt repayment progress (and for a few other reasons). After setting our audacious goal, we decide to be totally transparent with our finances on the blog.
December 2013— We make it to just five figures under! Hooray!
March 2014— We start living on last month’s income, which is seriously a game-changer! You can get my free Guide to Getting a Month Ahead Financially when you subscribe to my newsletter.
June 2015— My husband’s income changes from a draw system, to strict commission (more about our change to variable income here). We also reach the point where our “debt paid” was finally more than our “debt remaining.
September 2015– My husband changes jobs, moving from a small law firm to work for the state of California. He keeps some of his clients and starts his own law firm on the side so he can continue to take care of them.
March 2016— We pass the six figures mark in debt paid!
July 2016— We’re done!!
I’m sure there are many other highlights and milestones that I didn’t mention. It’s been quite a journey!
And if you’re new here, please know that everyone’s journey will look different. Your journey won’t look just like ours, and that’s a good thing!
How did we increase our income?
I get lots of questions about what we did to increase our income during the time we paid off debt, so I filmed a little video to walk you through it. Or I have a post where I talk all about how to increase your income to pay off debt .
Thanks to YOU!
Nearly three years ago I started Six Figures Under to document our paying off our student debt. I am SO GLAD I did. I’m truly humbled by all of your support. Besides a handful of family and friends who read here, I’ve never met any of you, yet you’ve cheered us on all the way. You’ve encouraged us and celebrated the milestones with us. That means more than you know!
The accountability of having this public record read by all of you has also kept us in check! It might sound silly, but I really do think, “Would I be proud to tell my readers about [insert bad financial move]?” I don’t want to have to admit to going over budget or wasting money for something dumb, so I usually rethink things.
We need to keep the momentum up. I think I’m even more excited about saving for a house than I was about paying off debt. It’s going to be another colossal goal thanks to the high housing prices in California. We’re still working out the details of our next goals, but you better believe I’ll let you know!
If you’re wondering what we’re doing to celebrate, check out our plans for when we’re debt-free. So far we have new bikes and sleeping bags for the kids. Hopefully next weekend, we’ll take care of the grown up bikes. We’re so excited to have earned them before the summer is over!
Are your working to pay off your debt too?
If you are just starting out on your journey to pay off debt, check out my Smash Debt Quick-Start Guide to help you get organized and make a plan to pay off your debt. It will walk you through the steps we went through to achieve our goal to be debt-free. It includes some printables to help you get organized, too!