Two years ago today I walked across a stage, shook hands with the University President, and received my degree in Accounting. It’s hard to believe I graduated from college two years ago. Of course, in order to earn my degree I had to take out several student loans.
I recently received a bonus from work this past week and with that bonus I was able to pay off my first student loan. I’ve been putting tons of extra payments towards this loan since it had the highest interest rate (6.8%) out of my student loan portfolio. Maybe when I have time I’ll calculate how much I saved in student loan interest payments by aggressively attacking this loan. I hate paying student loans because it feels like I’m losing money. I’d much rather save or invest that money. However, I had to get in the mindset that paying off these loans and getting rid of debt was like investing. Better yet, I was investing and getting a guaranteed return of 6.8%. It was difficult at first to get into this mindset, but once I changed my perspective it started to actually feel good to put any extra money towards these loans. I also found that tracking my net worth (where student loans were recorded as liabilities) helped me to see my progress.
Together, we started with roughly ~$60k in student loans. Over the past 6 months, my student loan balance has dropped significantly. This is due to the fact that we fully funded our emergency fund in January 2016 and implemented an aggressive plan to pay off our high interest student loans.
My wife’s student loan balance has stayed fairly consistent since they are still in the grace period and haven’t entered repayment yet. My wife also had a few subsidized loans as well, which means interest hasn’t accrued on them. We’ll start attacking her loans once my high interest ones are destroyed.
Once we knock out all of our student loans with interest rates above 4.5%, we’ll probably ease up on the payments and look to start saving for a down payment on a house. Until then, I will keep attacking and destroying our high interest student loans (I find its much more interesting to talk about student loans as if it were a battle). I’ll continue to post updates about paying off our student loans in the months to come.