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How We Erased $19k Of Debt In Just In Six Months

(Last Updated On: November 22, 2020)

It all started with a dream of being debt free. In the Spring of 2020 when the corona virus hit the United States everything changed.

Lockdowns occurred, work shifted for me and my husband from going into the office everyday to working from home.

We also took a hard look at our finances.

Like many people, we didn’t know where this pandemic would take us six months later. In order to be more financially stable we would need to make a plan to pay off our massive amount of student loan and car debt.

So we made a plan to tackle it.

In August 2020 I am happy to say that we were able to pay off our first major debt which was our car loan.

We had purchased a used 2017 Toyota Rav4 back in July 2018. After making two years of payments we still had three more years to go.

Thankfully we were able to pay off the remaining $12,785.85 on our Toyota Rav4 just four months after making our “get out of debt plan” and with that the debt snowball began.

After paying off our first large loan we felt motivated to payoff our next one.

The monthly payment on our car loan was $296 dollars. That meant we now had an extra $296 dollars freed up to put towards are next targeted bill.

One of my private student loans called Navinet, formally Sallie Mae, (and still how I refer to it to this day) was the the next target.

The current loan amount was $6,301.51.

So, how were we able to come up with the extra money to pay off this loan just two months after paying off our $12,788.85 car loan? Let me explain.

One of the blessings from this economic recession we find ourselves in is that the federal government has paused all federal student loan payments until the end of 2020.

Things could change if a new stimulus package is agreed upon. It is up to the house, senate and the white house. But until then this is where we are.

Because of the pause on payments, my husband and I have been able to save the money we would normally be using to pay towards are federal loans.

Together our monthly federal student loan payments total $1,127.54.

So over two months (from the time of our car payoff) we were able to save an additional $2,255.08. We put all of that towards my private student loan Navinet.

Now we only had $4,046.43 remaining to payoff the Navinet Loan

In April of 2020 we had decided to refinance our mortgage due to the low interest rates for home financing. Even though we bought the home one year prior, we found that if we refinanced we would save almost $300 per month on our home mortgage.

So that is just what we did. I write about this and other frugal ideas in my blog post Money Saving Tips You Should Be Doing Now.

We were able to save an additional $600 dollars in two months from our lowered mortgage payment.

This brings us to $3,446.43 left on the Navinet Loan

Remember how I said at the beginning of this blog post that we were able to payoff our car loan in four months? Well, that created the debt snowball.

It allowed us to take what our monthly car payment was ($296/month) and put that towards our next debt.

So in the two months following the car payoff, we got to save those two months of what would have been our car payments. We then put that amount towards the Navinet student loan.

$296 (car payment amount) x 2 (months) = $592

$3,446.43 – $592 = $2,854.43 (new total)

At this point we have whittled the Navinet student loan debt down to $2,854.43

In October 2020 it just so happened that I got paid three times. I get paid bi-weekly. Which usually equates to two times a month.

But twice a year I get paid three times in one month. Its just how the paydays fall.

When this occurs an extra bonus happens. My insurance, union dues and gym membership deductions do not get deducted, which makes this extra check so special!

Lucky for me that allowed an entire paycheck to go towards the Navinet debt! So, $1550 went towards my Navinet student loan.

That brought the remaining Navinet total to $1304.43.

The very last thing my husband I did to save nearly $1300 dollars in two months to put towards are debts included the following:

  • We spent over $500 less on groceries
  • I didn’t spend any money on take-out food, saving me $400 each month, for a total of $800!
  • I used to easily spend $400 or more on fancy coffees, breakfasts, snacks and lunches when I physically went into the office. But since I now tele-work almost full time I have not been tempted to spend. Although over the course of the pandemic we have gotten our share of Thai food and pizza’s we both really cut back these past two months.

This brought us into the home stretch and we were able to put a final payment of $1304.43 on the Navinet loan at the end of October.

I can’t tell you how good it felt to pay off a student loan!

It wasn’t until earlier this year when my husband and I first learned about the FIRE (financial independence retire early) movement, that I had just succumbed to the fact that I would live with massive amounts of student debt forever.

But now I see the light at the end of the tunnel!

While this is just a small drop in the very large bucket that is our student loans, I am very encouraged by what we have paid off so far.

Sometimes I can’t even believe we paid off over 19k in just six months.

Never would I have imagined that we could pay off this amount of money in half a year. I think if we hadn’t been forced to really think about our budgeting and debts during the start of this pandemic we would not be where we are now.

Come January 2021 we will both be making our federal loan payments again, but that is okay because we have paid off other debts during that time that will allow our discretionary spending to be higher.

What To Do If You Can’t Cut Any Monthly Expenses?

Just because we were fortunate enough to have our federal loans paused in addition to the home refinance, extra paycheck and spending less on food if this sounds daunting to you don’t worry.

Consider A 2nd Job For Extra Cash

If you find yourself unable to lower any of your monthly costs, from housing, utilities and groceries I suggest starting a side hustle.

Taking up a second job will allow you to make extra money and give you that boost to take on your debts.

There are lots of possible jobs from freelance writing or other work from home jobs to boost your income.

The best parts about freelance writing jobs are that they can be done from home, at night or on the weekend. It doesn’t have to interfere with your daily schedule and it can give you extra money to pay off debt!

Paid off debt
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