Isn’t it ironic that college students go from limited income and taking on debt, to making a decent income, but then just adding on more debt? Jessica and Daniel saw their spending patterns change from frugal students to splurging as Daniel took a position as a software engineer. Find out how Jessica and Daniel paid off $21,000 in a year as a single-income household with two kids.
Here’s how they owed $21,000
Jessica and Daniel were full time students at Texas State and brought in incomes by working part-time. They lived modestly and were able to minimize how much they took out in student loans. They had a modest wedding and only spent $2,500 with cash.
After graduating they both moved to Austin with Daniel’s job and started a family. After years of student living on a budget, “We actually had the wiggle room, it was too convenient to splurge,” said Daniel.
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Together they owed only $6,103 in student loans. After an unexpected car accident, they purchased a car with a $15,000 car loan. That’s when they enrolled in Best Money Class Ever, a 4-week class that’s like CrossFit, but with money.
Why Jessica and Daniel wanted to be debt-free.
“We were more motivated than ever to become debt-free. Taking the class helped us prioritize. Once we took the class we buckled down and said, let’s do this,” said Jessica.
They didn’t want money and debt to be a huge stress in their lives. Being debt-free meant they could live comfortably as a family, save money for a house, and for their kid’s future.
How Jessica and Daniel paid off $21,000
Immediately after taking the class they paid their debt minimum payments and then an extra amount towards debt each month.
“There are so many things that people think are mandatory for the monthly budget, but so much of that isn’t mandatory,” said Daniel.
They switched cell phone plans, don’t have cable, and started using their apartment gym to work out for free. It had gotten easy for Daniel to eat out for lunch with coworkers or grab fast food on the way home from a stressful day. After Best Money Class Ever they saw big savings on how much they spent on food.
Jessica stayed at home but brought in an income by tutoring and babysitting other children.
She did little things like using cloth diapers, trading baby clothes among cousins, and not buying a gazillion baby bouncers and gadgets.
They paid extra towards debt each month.
Then some months they paid even more towards debt when pay raises, bonuses, or tax refunds came around. Just a year after taking the class Jessica called the bank to get the exact amount left on her car loan.
She then wrote the last check and became 100% debt-free, “My hands were shaking, I had so much adrenaline,” said Jessica.
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After becoming debt-free, even though they kissed monthly debt-payments goodbye they continued with that intensity. What they were paying towards debt monthly plus their extra amount, but now is all going towards their future.
Currently they now have three months of expenses saved for an emergency fund, and a large down payment for a home. I’d say they’ve got this money thing down for 25-year old’s.
That’s how Jessica and Daniel paid off $21,000. If they can do it, so can you!