How We Paid Off $250,000 In Debt in Less Than 5 Years

My husband and I entered our marriage with $250,000 in student loan debt collectively. What a way to start a marriage, right? Looking back, our vows should have stated “for poorer or for poorer.”

Before I depress you, within a little less than 5 years of being married, we became completely debt free. No, we didn’t win the lottery. No, we didn’t inherit a fortune from a dead uncle. What we did is we worked our butts off to pay down debt. Here is our story.

Between college debt, grad school debt, post doctorate training debt, personal loans, and credit cards, we were living the America dream. You know that dream … lots of education and no money. I was working a hospital job making around $48,000 a year, and my husband was employed through LSU as a resident making around $40,000 – all before taxes.

One of the top priorities in our marriage was to start paying down debt immediately. It can be a daunting task when you’re looking at $250,000 in debt. The average American doesn’t even earn close to that amount in a year, and well let’s just say, we were less than average in the income department. Before I tell you the rest of the story, know that the most important key to our success in becoming debt free is that we were both on board to live very frugally to eventually have financial freedom.

Here’s what we did.

Lucky for us, our cars were paid off … because they were old as dirt. While our friends were purchasing new Range Rovers and other luxury vehicles, we drove really crappy cars. We drove the wheels off those cars. I had a rule that we could fix anything on our vehicles with a little elbow grease, the help of my dad, and when all else failed – duct tape. In fact, I kept my 2 door coupe through my child’s first year of life! Imagine how fun climbing in and out of the back seat of a coupe with a newborn was – not!

We also knew we weren’t ready to purchase a home, so we rented a tiny house from my in-laws. We ate dinner at home. We packed our lunches. Our big splurge was cheap wine. We accepted hand-me-down furniture. I took on odd jobs to make extra funds and my husband moonlighted. By doing that, we threw every extra penny we had to our loans.

After my husband finished his residency training, he accepted a great job at a local practice in Baton Rouge. This is where I have to confess that he’s a physician, but I also need to inform you about physician salaries. When they first start out, the salary is not as high as you’d think it would be. On top of all the education, training, and debt, it takes several years past all of that for a physician to make what you probably think physicians actually make. In fact, many physicians finance their student debt anywhere from 10-30 years. On top of all of that, I decided to stay home full time with our newborn, so we lost my income.

In that time, we chose to continue living exactly as we were living until all of our loans were paid. Even though we got a bump in total family income with my husband’s new job, we pretended as though that money didn’t exist. Again, we threw every extra cent toward loans starting with the highest interest loans and working our way down the list of debt.

The moral of the story is that discipline and short-term sacrifice will yield long term gain.

Sure, we had FOMO when our friends were buying nice homes or jetting around the world, but we knew are had the upper hand in the long run.

Now, except for a home mortgage (which we’re working to pay off), we are so happy to be debt free. I can’t tell you how amazing it is to live without the weight of personal debt. If you’re in a similar situation, know that there is a way out. The way out starts with creating a plan, being on the same page as your spouse, remaining accountable to each other, and determination.

Here are a few tips for what worked best for us:

  • Stop buying stuff you don’t need. That can be anything from trendy organic groceries to expensive handbags to a new car when your current vehicle works just fine.
  • Don’t finance vacations. Yes, vacations are so great for your mental health. It’s also wonderful to get away for a few days, but vacations are a luxury. If you’re still paying on that trip 6 months to a year after you took it, was it really worth it? Look for cheaper ways to travel and create memories.
  • Make a plan. Sit down with your spouse and honestly talk about your debt and savings plan – without fighting. It’s easy to get defensive when talking about money, but having an open and honest conversation about money is a great start to getting out of debt.
  • Stop trying to impress people. The only person that cares about the house you live in, the car you drive, where your kids go to school, and what you wear is YOU. Anyone else that cares is not your real friend.

Have you paid off a large amount of debt? Do you have any tips you would add? 

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