3 Month Debt-Free Journey Update

Written November 2018

Three months ago, Mark and I made the decision to start our debt-free journey in earnest. At the time, we had about $15,000 in credit card debt, $100,000 in student loan debt between the two of us and $150,000 left on the mortgage. We traded in both of our Nissans (one of which was still being financed) for a fully paid off 2007 Toyota Prius. This reduced our car insurance costs, reduced our gas costs and got rid of our car payments, freeing us up to focus on our debt-free journey. I will share more on our car purchase in an upcoming post.

We stopped using the credit cards and planned to have them all paid off by the end of 2018. It turns out, we were able to pay off the credit card debt one month early! We could have finished paying even sooner, but we had to put down over $600 for my USMLE Step 1 exam registration. It makes me happy to know that we were able to use cash for that expense, and we’re on our way to being debt-free.

I am looking forward to the peace of mind knowing that we will have enough savings to cover everything in cash. Furthermore, we will be able to save so much more once our debt payments are gone. We have already been able to reduce our living expenses to less than 30% of take-home pay, freeing up a lot of money to throw at our debts. While we are super eager to pay off the rest of our debt, we will be putting debt payments on a hiatus for the rest of 2018. This is so that we can cover any final wedding related costs, and resume debt payments in January 2019.

Paying off the credit cards is a great victory for us, but it is just one battle in the war. We still plan to knock out our student loans within the next two years. Even though Mark is still in his Master’s program, we will pay his tuition with cash so we don’t add any more principal to his loans as we pay them off.

It is totally possible to meet our goal to have everything paid for within the next four years. In addition, to pay off those loans faster, we are looking for ways to make a little extra money on the side. We still have items that we can sell for a profit, and we are receiving our $200 Big Fat Check from Rakuten this month.

Rakuten is an app that saves you money on things you were going to buy anyway. You can get the Google Chrome plug-in that lets you know what percent cash back you are eligible for when you are on the website of a participating store. You just click to activate, make your purchase, Rakuten (formerly known as Ebates) adds cash back to your account. Then they write you a Big Fat Check and mail it to you or credit your Paypal account. It’s basically free money! Use my referral link to get a $10 bonus on your first purchase of $25 or more!

We will also use our wedding registry gifts to help us furnish our home, since we will be getting married in December. Otherwise, we do not plan to furnish our home out of pocket until the very last debt is paid off. And if you saw our bare living room, you might ask, “why are you depriving yourselves”? We have an old futon and a $15 dining room set from Goodwill , and that’s okay for now.

This does not mean that we aren’t open to saving for some of these projects on the side. However, the priority is to pay off the debt and secondarily pay for furniture, home improvements, etc with cash. We are thankful that in this season of our lives, we are able to focus completely on being financially stable. Out of that thankfulness will come contentment with the present. We are looking forward to all the things we will be able to do once our finances are straight and we’re finally debt-free. Cheers to living on less!