How We Paid Off $59,000 of Debt Together (Part 1)

This is a guest post by Amanda L. Grossman, a personal finance writer and the creator of

Amanda and Paul

Amanda and Paul on their wedding day

September 1, 2010. That is the date on which my husband Paul and I declared ourselves to be debt-free (excluding our mortgage).

And if felt great! The majority of our debt had come from student loans and a car loan (more on that below). According to our creditors, we should still be paying off our loans today — two and a half years later.

But by taking debt repayment seriously and focusing our energies on decreasing the amount of bills in our mailbox each month, we have saved approximately $2,000 in interest payments thus far. I will take that over a student loan interest tax deduction any day!

In this two-part series I will discuss how we accumulated the debt, made payments on our debts as individuals, and our debt payoff strategy as a couple.

Our Debt Accumulation as Individuals

Like many others, the first time I ever accumulated debt was during college in the form of student loans. I had scored $40,000 in scholarships, various grants, and my parents were paying a small portion of the private liberal arts college tuition each year. To make up for the difference, I took out subsidized federal student loans and one private student loan totaling $36,000 over the course of four years.

My living expenses were paid through my federal work study job (at the college library—a gig I highly recommend for any college student), and also from driving Amish to their markets in PA on the weekends (another article all together). I also worked summer jobs and winter jobs, and my mother took me grocery shopping every few weeks.

Paul had a small amount of student loan debt he had accumulated before enlisting in the Navy. He paid this off while serving abroad, and then accumulated a car loan in the amount of $20,000 when he purchased himself a mustang as a gift upon finishing his tour of duty in 2007.  He received a family discount on the car through his father’s employment at a Ford car lot, so this saved him a few thousand dollars up front.

Amanda and Paul

Amanda and Paul on their honeymoon

Our Debt Repayment Plans as Individuals

Paul and I were both fortunate to find good employment with decent salaries right after graduation/finishing service. We each disliked the idea of being in debt to someone else, especially for the length of time our creditors were banking on us paying interest (if I paid off my student loans at the rate Sallie Mae wanted me to, it would take me 11 years to do so; Paul’s car loan was for five years).

Individually, we both knew we needed to pay off these loans as quickly as we could.

My Debt Repayment Plan

I snagged a full-time job from an internship I had started my senior year. The company was located in my college town, so continuing to live like a poor college student was very easy for me. I found a senior who had rented an apartment in town and was looking for a roommate. The apartment was located just two blocks from where I worked, which meant that I only had to fill my tank with gas once per month! I cooked all of my food at home and my groceries cost just $200 per month. Since I had a roommate, rent, utilities, and electricity came to just $380 per month.

At the rate I was going, I accumulated several thousand dollars in my checking account in a short amount of time. With this money I paid off the first of my student loans, a $2,500 loan at 4.2%. Then I opened up an IRA account and began to contribute to that regularly. Finally, I opened up a savings account.

I was paying several checks in small denominations to several different loans each month. Eventually I ran across some articles on the web about student loan consolidation. Fortunately for me, the rates were extremely low the summer after I graduated. I was able to consolidate the lump of my student loans into one loan at an amazing 2.25% interest.

The private loan I had taken out had a staggeringly high interest rate of 9%, and so I did not consolidate this smaller loan into the larger ones as it would have raised the interest rate on the whole pile significantly. Instead, I paid the minimum payments on the larger, consolidated loan and threw extra money at the $6,000 private loan with the highest interest rate until it was paid off. Once that was paid off (it took about a year and a half), I then paid $250 per month on the rest of the student loans (minimum payment was $117).

Get offers for lower-interest rate debt consolidation loans here on ReadyForZero!
Check your rate using ReadyForZero's free debt consolidation tool. People have saved thousands by consolidating higher-interest debts using a single, personal loan, this will not negatively impact your credit. Check Your Rate Now

Paul’s Debt Repayment Plan

For the first several months after getting out of the service, Paul lived with his brother and sister-in-law. This allowed him to save up some money and research an affordable apartment in the city near his new job. Paul also always paid more than the minimum payment each month on his car loan. This meant that he was paying $400 on his car each month instead of the $360 minimum payment amount.

While I would like to say that everything was smooth sailing until we fell in love, worked together, and paid off the last debt, I would be lying if I did. Well, not about the falling in love part or the working together part, just about the smooth sailing part.

To start with, I lost my job after just one year of post-college employment.

To be continued…

(if you want to be sure to catch Part 2 of this story, you can subscribe to our blog)

Receive updates:      
You can always unsubscribe by clicking on the link at the bottom of each e-mail.

  • Christian Losciale

    Amanda and Paul,
    I’d first like to thank Paul for his service in the Navy. Also, congratulations to both of you for working your way out of debt. That is an impressive feat. i’m looking forward to part two!

    -Christian L. @ Smart Military money

  • Mike

    Dear Investors/Financial Seekers. We are a Registered Private Investors/Loan Lender! Do you need FINANCIAL ASSISTANCE? Are you in financial mess OR debts? We offer loan at 3% interest rate within 1 year to 30 years repayment duration period to Individual and Companies that are in need of financial assistance and to any part of the world. We give out loans ranging from $5,000.00 to $500,000,000.00, CURRENCIES: USD, CAD, KWD, OMR, SGD, RUB, GBP, AUD, MYR, ZAR, IDR, UAH, PHP, EURO. Our loans are well insured for maximum security is our priority, Are you losing sleep at night worrying how to get a legit loan lender? Are you in poverty? Do you need financial assistance to set-up a business? We can assist you financially. We’ll help you get over those financial obstacles. Interested Individual OR Companies should contact us via: Email:{}

    Best Regards,

    Mr Jad Kimi.