As the credits rolled on Adam Baker’s I’m Fine, Thanks documentary, tears streamed down my face. I had watched his TED Talk earlier that day about getting rid of your crap, paying off your debt, and doing what you love. I yearned to have the “freedom” he talked about in both videos. That’s when I looked at my husband and said, “I don’t want to live like this anymore. I want to pay off your student loan debt!”
The first tool that came to mind was Mint.com. I had heard of the site from friends who mentioned using the app. I never realized where all of the money we earned was going. We were living in Austin, Texas and working through a tough economy making roughly $12/hour each. Luckily, we had two old cars that were paid off (including my first car from when I was 15), so we didn’t have the burden of car loans or credit card debt.
The student loans were weighing heavy on us. Fortunately, a family gift of $5,000 helped us lower the loan from $24,000 to $19,000, but it was still a huge burden. I immediately logged on to Mint.com that same night after we finished Adam Baker’s inspiring videos and pulled in three months of history from our bank accounts. As I began categorizing every transaction and budget, I began to see a pattern of bad habits.
What was my husband buying at the convenience store every two days for $7.43? Did I really need to purchase those clothes from Goodwill last Tuesday night? Why were we eating out four times a week? OK, I’ll admit, my food budget is still being reworked two years later! As the transactions poured into our Mint.com account, they sparked a conversation between my husband and me. We committed to spend less on ‘wants’ and focus on the necessities and paying down the student debt.
We failed miserably the first months and still do in certain categories from time to time, but we adjusted the budget and aimed for more goals the next month. Our minimum payments for the student loans were $184 a month. There was no way we’d be able to make big progress by only paying the minimum, so we upped our payments little by little.
The first month, we paid $300 on the student loans. We didn’t feel too much of a pinch. At this point, I was watching our account with a microscope, and every single transaction was up for discussion. The next month, we paid $500. Still no pinch. I said, “Let’s be crazy and go for $1,000!” We met that goal and continued to pay upwards of $1,200 each month until the balance dwindled down to nothing. Even after moving cities and switching careers, we were able to pay off the student debt in full before my 27th birthday.
That feeling was amazing, and now we’re onto the next goals: saving for a house and preparing for our first baby due next year.
About the Author
Kelsey is the self-proclaimed financial guru of her household living in Houston, Texas, spreading the word about the benefits of paying down debt. She’s also a minimalist enthusiast, and founder of The Little Red Journal.