Thursday, August 29, 2013

Kicking Out Miss Sallie Mae

Excuse me Miss Sallie Mae, but get your interest and get out of my house! I am so happy to share
with you that we are DEBT FREE and no longer slaves to student loans. (Insert high pitched girly squeal!)

This has been a long journey for both the Hubs and I to get to this point. It has taken us 5 years to pay off $26,813 worth of student loans and credit card debt, but it was well worth it!! At 28 years old, we can focus on building wealth, saving for retirement, and giving generously. Yes, you heard right we are a couple under 30 who chose to control our money by working hard, living within our means and forgoing luxuries so that we can eventually live like no one else (Ramseyism)! Yes, we're weird and we're okay with it!

Also noticed that I am emphasizing "we" here. It doesn't matter who's student loan it was or who got suckered into the credit card because when we said "I do" everything became "ours". For better or worse, richer or poorer, we decided we were in this together for the long haul. Did you know money is cited as being one of the leading causes for divorce especially for couples married less than 7 years?

The first thing we did was chop the credit card which one of us signed up for in college. Big mistake to get that credit card. I think at its highest the interest rate was 29%! Of course, it started out low, but it quickly ballooned. Additionally, this credit card was used to make some useless purchases like soda or food which means that soda or that McDonalds meal was paid for over and over and over in interest. STUPID, STUPID.

When the Hubs and I were first married we lived with his parents. Living with them allowed us to save money for a house down payment. It wasn't fun, but it worked. We were young and finishing up our last semesters of college. We didn't need much so we made due. Now by the time we bought the house, we still had significant student loan debt hanging around our neck, but it was time for us to leave case de InLaws. This is one example were we're didn't follow the Ramsey strategy (Baby Steps from the Financial Peace University class) with fidelity; however, we were smart about it and got a great deal on our house and mortgage.

Let's talk about our driving situation for a moment. When this financial journey for us started we had our college car and truck. The hubs was driving the truck he got in high school and I was driving my little red sports car. Both of the vehicles were used, mostly reliable and paid off!! No fancy schamancy car payment for us. Many young adults run to a car lot and get new cars and payments. They use their student loans or part time jobs to pay that bill. I've never owned a brand new car. I've always bought used because that's what I could afford. My college car got me from point A to point B and C mostly without any trouble. I am thankful for that little red Celica, but she started to show more wear and tear at the end of 2010.

By this time, we knew a family car was needed. We ended up finding a nice low mileage 2007 Toyota Corolla-S for $11K. This is the newest car I've ever had and it was our second biggest purchase as a couple. How did we pay for it you ask? We made a large down payment and got a small loan. We made triple the minimum payment each month and had it payed off in 11 months. So once again, we're car payment free.

Other little things we did along the way is pay cash as much as possible! Money talks and the hubs and I learned the power of walking away and taking our money else where. Did you know you can sometimes get retailers to sell floor or display models? If you don't ask the answer is always "no."

Overall, we purposefully lived a thrifty, bargain shopped, lived a saver life style. Our furniture was hand me downs, our cell phones were prepaid, and I became a coupon lady, but we always had everything we needed.  It wasn't that we couldn't "afford it" because we could. We chose to look at the bigger picture. Fun fact: Do you know we don't pay for cable or dish? Yes, sir you heard right. We have an antenna and we get "free TV!" We get the basic channels and that works for us because we have a good internet connection that allows for online streaming.

So fast forward to this week. The hubs checks out the remaining balance on our last debt--the largest student loan and sees that the balance is within a reasonable "pay off" amount according to our yardstick. You see, if we had been a bit more die hard about the debt payoff we could have taken it out by withdrawing a large amount from savings a while ago. However, we didn't want to be without that emergency cushion even if it meant paying a little more interest for a little longer. If you know my hubs, he's always expecting the bottom to drop or the worst to happen.

As with all big money decisions, we talked it out. What should we do? I was all PAY IT OFF and be done! The hubs didn't disagree. So we committed to the idea and moved forward with the plan. The money was transferred and once it cleared the hubs did the deed of clicking that submit button and that was all she wrote! Bye, bye bye!  I am proud (more than words can express) of the fact that we met our goal of kicking out Sallie. It is a burden that is no longer ours. We never deferred payments or missed a due date; we faced this problem head on and we accomplished it together. We are smarter, stronger, and most importantly DEBT FREE as a result which is truly simple, but significant.

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