Hi, we're Hunter and Sarah, a husband-and-wife, luxury wedding photography team. We’re also educators, helping other photographers build profitable and sustainable photography businesses.
Hey friends! Last month, Sarah and I announced on Facebook and Instagram that we are now 100% debt-free! When we got married in June of 2017, we had just over $27,000 in student debt. As of early April, less than 21 months later, we are now 100% debt free!
Since we posted that, we’ve had an overwhelming outpouring of congratulations, which we were sincerely touched by and SO grateful for! However, we’ve also had multiple people reach out to us and ask for details. “How did you do it?!”, “Have you written a blog yet?”, “When are you going to write a blog about how to get out of debt?”
We honestly had planned on doing this series later this Summer when things were a bit slower, but with so many people asking us, we want to get this out as quickly as possible! So without further ado, here it is: our story of how we paid off $27,000 in student loans in less than 2 years!
In Step 1 of this blog series, we told you to read “Total Money Makeover” by Dave Ramsey. Not only will this equip you with some practical tools to get out of debt, but it’ll also get you fired up to be disciplined and fight against the American norm of being in 5-digit debt for most of your life! In Step 2, we told you to sit down and make a budget. If you haven’t done that yet, the rest of this series won’t be nearly as helpful to you as it could be, so go do it now!
So now that you’ve made your budget, you should quickly realize that if you keep your recreational spending pretty modest, that there can be quite a bit of wiggle room. What we mean is this: if your take-home pay is $1,700 per month and after rent, utilities, groceries, car insurance, etc. you’ve only spent $1,300 of your paycheck, then give yourself a few hundred dollars per month to spend on recreation purchases (eating out, new clothes, etc.), and all that money left over and not assigned to a category in your budget are your “Extra Dollars”. In the example above, if you spent $200 on recreational spending, you’d have $200 Extra Dollars.
Your new task is to take every single Extra Dollar, and throw them at your debt! Begin making monthly payments above your minimum debt payments using these Extra Dollars. This is the only way to get out of debt early. Obviously, you won’t have consistent Extra Dollars without a budget, which is why it’s so important!
Do not (we repeat: DO NOT) do what we’ve heard plenty of people say to us over the last two years. “I’m going to save a little extra every month, then once I have enough, I’ll pay off all the debt at once!”
No. You won’t. Maybe you’ll save those Extra Dollars for a few months, but then some great opportunity will come along, and you’ll be overwhelmed with temptation to dip into that “paying off my debt” fund. Whether it be a concert or a vacation or a new video game or a new dress, you will be tempted to blow your budget, and if you hold onto that money instead of paying off debt with it each month, you’re enabling your future self to make poor decisions. If some of those things that I just mentioned are more important to you than paying off your debt, then refer back to Step 1 and recognize that you don’t really care all that much about paying off your debt.
Plus, even if you had perfect willpower and saved tens of thousands of dollars in your savings account for one big debt payment, you’d still be losing money. While that money in your savings account gathers 0.05% interest, your student debt is probably accruing interest at 4% or more, and your credit card debt at 15% or more at the same time!
Also, keep in mind that paying off your debt early doesn’t just feel good (although it certainly does feel great)! If we had just made minimum payments on our debt, we would have made the final payment in 2027, and that $27,000 in debt would’ve cost around $34,000 in the end! We saved almost $7,000 in interest and another 8 years indebted to our lenders by harnessing the power of our Extra Dollars!
But what if after making your budget, you don’t have any Extra Dollars? Or what if there’s only a few of them left over at the end of the month? We’ll give a few tips on that in Step 4! Until then, start today. Take your Extra Dollars this month, and use every single one to pay down debt!
Best of luck!
Hunter + Sarah