When my husband Danny and I started dating in 2007, we were both exactly $0 in debt. Over the last decade, that beautiful $0 ballooned into a colossal +$649,000 (and growing). The question that we get asked all too often– how did this happen?
How we ended up with +$649,000 in debt
After getting married, we graduated with our bachelor’s degrees in 2010 fairly unscathed. Danny had NO student loan debt, and I graduated with a measly $3,500 that I had to borrow my last semester. While measly, it was still a negative number. I had never had debt before. It made me uncomfortable.
Our plan was always to go to law school (me) and dental school (Danny) and we knew that student loan debt would assuredly accompany our higher education. What we didn’t understand is just how awful compound interest can be on a six figure balance and just how much debt we would actually walk away with.
What we did
Danny went to graduate school to amp up his application for dental school. In total, that Master’s of Biomedical Science degree cost us about $60,000. We justified that if that degree could get him into dental school, it would be worth the cost.
I was lucky to attend a very affordable law school, where the cost of tuition was low. I earned my J.D. in 2015 with about $44,000 in student loan debt. I ended up applying to law school one year earlier than I anticipated. My original plan was to start one year after Danny started, so that we could graduate together. This would allow me to work full time for a year to save up a little for school. At the last minute, we decided it would be better if I started school as soon as I could. I would become a lawyer one year faster, meaning I would be earning a lawyer’s salary one year earlier. It seemed like I would earn more money as a lawyer than as a “sociologist.” (Also, hey p.s. there just aren’t that many sociology related jobs for undergrads.) But making this last minute decision meant that I had already missed deadlines for scholarships. That did not come without a cost and should have been factored into my decision of whether to wait one year or apply immediately to law school.
And then there was dental school. Oh my lucky stars there was dental school. I think we were just so grateful that Danny got into dental school that we didn’t take the time to consider the costs too much. Sure, we were nervous about taking out all the student loans, but we felt (and were assured by others) that we’d be able to manage the payments after school. Danny’s dental school cost about $84,000 a year. At 6-7.9% interest, that added up FAST and combined with my law school, undergraduate degree, and graduate degree, left us with more than $600,000 in combined student loan debt by the time Danny graduated in June 2016.
We lived frugally. We used coupons. We didn’t buy fancy things. I was able to work during some of my summers and part time as a research assistant which helped us to have something to live off of besides our loans.
We did not think too much about our student loans. It never occurred to us that we could (and should) start making payments while we were still in school. We had heard of income based repayment plans and were familiar with a few different strategies to paying off the debt, but we never stopped to consider what we were going to do. I think we assumed that things would magically work out for us.
We did not use a budget while we were in school. We rationalized that it was too difficult to calculate what our budget should be when we weren’t even earning significant income. Our thought process was to spend as little as we could. But student life is a trap for eating out too often and drinking too much soda. We fell into those traps.
Then I graduated law school, and everything changed.
I took a job as a judicial law clerk when I graduated. It was an AMAZING experience, but let’s just say it was not a huge money maker. I had student loan payments that were then coming out of their “grace period.” We had a new son to worry about. No one that I talked to (faculty/professional development/financial people at my law school, other law students, other dental students) seemed to have solid advice for managing student loans. Most people I talked to were convinced that finding the way to lower your monthly payments as much as possible was the way to go.
I didn’t know much about money, but I knew that lower payments meant it would take longer to pay off, which meant more interest was accruing, which meant school was costing more in the long run. (p.s. this is true even if your loans are going to be forgiven using any of the IBR plans).
I got stressed out. Me being stressed out lead to a furious journey, seeking the best solution for how we were going to handle our loans. I wanted know every single thing there was to know about money and student loans and how to get out of debt as quickly as possible.
I read every personal finance book I could get my hands on.[P.S. some of my favorites for starting out – Total Money Makeover 7 Years to 7 Figures, The Millionaire Next Door, Rich Dad Poor Dad.] If there is a book, blog or a forum dealing with finances, student loan debt, investing, and or becoming a millionaire, I have likely read it.
What we would have done differently in school:
There are a few things we would have done differently:
- Hunted for scholarships before and during school
- Had a more solid application for dental school so we could have chosen to attend a cheaper dental school
- Done something to create passive income while in school (i.e. purchased a duplex and rent out one side)
- Side hustled during school. (i.e. we could have started our blog sooner, sold things on e-bay, sold plasma, anything to make a few extra bucks)
What we are doing now:
We now have a budget and a financial plan in place. Our goal is to have no student loan debt by the end of 2021 (5 years after graduation). We live off of about $3000 per month and the rest of our combined income and income from side hustles (like our physical and financial a fitness program) gets dumped into student loans. We paid off my law school ($48,000 after interest) in less than 18 months and so far, we are on track for paying off Danny’s dental school by 2021!
But we aren’t sharing our journey just to talk about ourselves. Well we kind of are.
But this website is really about YOU.
I created this blog because I wanted to raise awareness about the student loan debt crisis. If I can, I want to help you with your own student loan debt. At a minimum, I want you to know that you are not alone. Certainly, my own personal experience with our student loans and finances is intertwined throughout the blog, but I hope that you will actually gain insights on how to manage your own debt and finances. We will offer:
- creative ways to substantially increase your income
- frugal living ideas
- student loan repayment plans and options
- budgeting and personal finance discussions
We hope that you will feel comfortable sharing your insights, thoughts, and questions by commenting on posts that interest you. We have a rich community (see-what-I-did-there?) of readers who will keep you uplifted, motivated, and offer their insights on how we can all get out of debt and go from being in the “red” to “green.”
Learn with us!
Learn with us as we navigate through this crazy journey paying off debt. 70% of Americans are graduating with student loan debt. Are you deeply in debt? Do you know someone who is? Please share our website with them!
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