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Newlyweds on a Budget: How we paid off $17,000 in student loans in six months

Erika Torres
by Erika Torres, Dimespring 30 (@newlywedsbudget)

Last week, I made a $10,571 bulk payment toward my student loans, bringing my total for the past six months to $17,071.68 in student loan payments. There is nothing easy about putting such a large amount of your hard-earned money toward your debt, but there is definitely one thing that makes it worth it: freedom.

When I wrote down my goals for this year, a big one was to try and get my student loans under $10,000. I started off the year with $18,248.01 left in student loans of my original $30,000 when I graduated college in 2006.

READ: Newlyweds on a Budget: There's more to life than paying off debt

But another big goal of ours was to start saving for a house down payment. Living in southern California, home prices for a standard three-bedroom home can easily run $500,000+ in our neighborhood. For a standard 20 percent down payment, we were looking at $100,000. Even though we have no intention of buying a house this year, maybe not even for several years, we thought it couldn’t hurt to just start saving now.

So we buckled down and started saving as much as possible. Within six months, we had saved more than $10,000. Not only did we save at least $1,000 a month automatically by direct depositing that amount into our savings account from our checks, but we also put any extra money from overtime, tax returns, etc. into our savings account as well.

During this time period, I was also able to pay down almost $5,000 of my student loans. This was largely due to my side-hustle income — money I make from blogging and freelancing.
So there I was sitting down, realizing we had more than $10,000 in our savings accounts, earning 0.5 percent interest, and I still had more than $13,000 in student loan payments, with an average interest rate of 4.3 percent, costing me an additional $80 or so a month in interest.

Decisions, decisions.

READ: What should I know about my fiance's finances?

I knew what I had to do, but it still wasn’t easy to see all that money go in a single instance. However, the feeling of being free from this interest-accruing debt is so POWERFUL. I can finally see the light at the end of the tunnel.

While I still have $1176 left in a 0 percent interest loan, and my husband has $5500 in subsidized loans till December 2014, at this point, we are going to focus on rebuilding our house down payment fund again. Perhaps we’ll knock out the rest of the debt by the end of the year, who knows?

I know the closer we get to being debt free, the better I feel knowing that our money is really our money.

Erika Torres graduated from Wellesley College with dual degrees in English and Italian Studies — and $30,000 in debt. Since getting married in 2010, she and her husband continue to work at paying off debt and saving money, while still having fun and traveling. Erika is a member of the  Dimespring 30, a community of bloggers sharing their thoughts, opinions and perspectives on personal finance.