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So Long, Direct Loans!

May 16, 2011

I don’t think I have been this excited about money issues since… well, probably since I finished off my undergrad student loans last year.  But this plan is bigger.  Much bigger.

You want to hear what it is?  B and I have decided to try and pay off my student loans by October.  Yeah, five months from now.  And while I won’t share just how much that is, I will safely tell you that it is more than two used Honda Civics.

So how are we doing this?  By winning the lottery, of course!  No, just kidding (though it would make it a lot easier).  We’re doing it the same way our parents and grandparents paid down their debts – hard work, planning, and budgeting.  We were both inspired by this blog post that I stumbled across one evening while procrastinating on working out (like I’m doing now), and heck, if these people can do it in a year with $30,000, why not let us give it a shot?  Now remember, we’re NOT rich.  I’m a teacher and he’s a call center representative for a bank.  Teacher + call rep = not big paychecks.  But we will try!


Our plan is pretty simple:

1.  Keep paying our student loans like we normally do (since, you know, we don’t want to get arrested or anything).

2. Put my paychecks right into savings to save up for the big payoff.

3.  Live on B’s paychecks, something that we already have practice doing without even realizing it.  Somehow, we try super hard not to spend a whole lot and we are able to pay most bills out of what he brings in.

4.  Take out a small loan to buy a new car.  I know this seems to go against the point of paying off my student loans, but if we can pay part of it out of savings and then take out a small loan for the car, our credit score will be better and we won’t owe as much.  Plus, once my loans are gone, we will be able to pay off the car faster.

5.  Take advantage of coupons, specials, sales, etc. when shopping.  Every penny we save is golden.

6.  Put my extra curricular paychecks toward the loans too.  I coach and direct during the school year, so anything I make from those will go right into the loans.

Will it work?  Oh gosh, I hope so.  Once we pay off mine, we can save more to pay off B’s, which are a whole lot bigger than mine.  One step at a time will get us there, and the sooner we save, the sooner we get to Paris!

Oh, I didn’t tell you about Paris?  Hmm… I’ll have to write a post about that!


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