It wasn’t designer clothes, fancy cars, or expensive hobbies. We didn’t start a business or make bad investments. It was just school. Law school. Oh yeah, business school too!
We were completely debt-free (and with a good tech job) before we felt that my husband should go back to school for 4 years for a JD/MBA. His scholarship covered a good portion of the tuition at a top 25 law school. We knew we would have some debt to deal with afterward, but education is one of the few things we felt okay about going a little in debt for.
What we didn’t anticipate, however, was the rate at which the tuition would go up each year, without a corresponding increase in the scholarship amount. For the second year, we qualified for in-state tuition, but the in-state tuition the second year was as high as out-of-state tuition had been the first year. Yikes!
During law school we lived frugally. My husband worked most of the time, which helped to cover living expenses. I stayed at home with our young daughter who was born the year before law school and our two sons who were born during the law school years. After the kids were in bed, I worked on my Etsy shop, which usually covered our food budget.
Deep in debt
In May 2012, upon finishing law school and an MBA, we had accrued over $130,000 in student loans. Outrageous! Believe me, I know. Seeing the total was quite shocking. During law school I avoided looking at the actual numbers during school because we “couldn’t do anything about it.”
Massive debt like this, is the norm though, at least with law school. Many young lawyers head to the huge firms where they work insane hours, but make six figures right out of school to pay off their debts. My husband had absolutely no interest in working at a big firm downtown. He was more interested in being around the family than making big bucks. And I was grateful not to go to bed alone each night.
In fact, at first we were in no hurry to pay off our loans at all. We were in the Income Based Repayment program (here’s why we chose IBR), so with our income and family size, we didn’t even have any payments due.
In fact, for the entire time we were repaying our student loan debt, our required payment was actually zero dollars because our income level was low for our family size. However, our unsubsidized loans were still gaining interest (and fast). While under IBR we were not required to begin paying off the loans, the total amount owed still increased as interest accrued.
A change of heart
At first, we weren’t sold on working to pay off our loans right away. We really wanted to save for a house. In November 2012 we paid off a small $4,000 loan just for the heck of it, but kept saving what little we could for a house.
Then in May 2013 I read Dave Ramsey’s Total Money Makeover and started considering his ideas. Once I crunched some numbers and realized how fast our loans are growing (and how enormous they would be if we put them on hold to save for a down payment first), I was convinced that paying off the loans first was what we should do. I know my husband wanted a house even more than I do, but he was also willing to give his all to paying off debt first.
By the end of August 2013, we had paid off around $32,500. We got a head start, thanks to the money we had squirreled away for a future down payment. When I started Six Figures Under, we still had $104,000 to go (plus the rapidly accruing 6.8% or 7.9% of interest). You can see the current loan balance in the sidebar. Update: Except the loan balance is now zero, which isn’t very interesting, so we took it off the sidebar.
Thankfully we are both upbeat, positive, and enjoy a good challenge. We set a goal to pay off the loans by the end of 2016. This was a stretch goal because at the time, my husband was making $39 K, but we knew that with serious motivation and determination we could make it happen.
Is this TMI?
For most people, the idea of sharing the taboo numbers of earning, spending, and debt is just plain crazy. Well call us crazy, ’cause that’s what we’re doing! And honestly, we’re loving it and we’re so glad we decided to.
But this website isn’t just about us.
Sure, our personal story is woven throughout this blog, but more than that, SixFiguresUnder.com was created to be a resource for you! At Six Figures Under, you’ll find:
- Frugal Living Ideas— We share loads of frugal know-how to help you reduce your expenses in every aspect of life, from making your own dishwasher detergent to how to save money on road trips. We cook from scratch and share tutorials on growing and preserving food.
- Budgeting and Finance— We’re pretty serious about budgeting, so we share things like how and why we live on last month’s income and secrets to budgeting variable income.
- Debt— Of course paying off debt is a major theme, so we share how to get started paying off debt and how zero-based budgeting helps us pay off more debt. I also tell you not to do what we do in our debt repayment.
- Ideas for Increasing Income— We talk about everything from tips for starting a money-making blog to earning on Etsy and other things you can do on the side, like plan the ultimate yard sale.
- Motivation— Isn’t it nice to know you’re not alone? This is a positive, upbeat place where you’ll be inspired to embrace your season of life and be happy on any income, but you’ll be motivated to set goals for your financial journey.
Join other readers who are committed to paying off debt and living frugally. We have a great community of readers here who will inspire and uplift you. In the meantime, you’ll pick up lots of frugal and financial tips for your own journey.
When you subscribe to Six Figures Under, you’ll get a free weekly email with some bonus material and a summary of posts for the week. You’ll also receive the “Guide to Getting a Month Ahead Financially” for free! This was a life-changer for us, and we hope it can be for you too.
We are now debt-free! Get a behind-the-scenes look at our payoff complete with graphs, numbers, and other fun stuff like that! If you want to see the 7-step process we used to pay off debt, you can get all the details in my free Smash Debt email course.
Note: This post contains an affiliate link for a book that I wholeheartedly recommend! For more information, see my disclosure policy.