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And Now It’s Time for a Breakdown (Part 1)


Name that tune.

Now that we’ve done the formal introductions, it’s time to get you acquainted with our debt situation.  We’ve been working on our mountain of debt for 3 years so far, and our goal is to make our last payment on my 35th birthday in July, 2017.

At this point in the journey, we’ve paid off all of our cars, some credit cards, and our undergraduate loans.  Still to go, we have 2 credit cards that are a testament to our ongoing financial lack of discipline, and my remaining graduate school loans.  Here are  the debts we’ve paid off so far.

Emily Credit Line $180
Orchard Bank Card $250
Short-term Loan $500
Prudential Insurance $1,000
Citi Private Student Loan $3,070
Ford Focus $9,365
Emily Dept. of Ed. $7,000
Emily Sallie Mae $6,350
Citi Credit Card $2,400
Lexus RX300 $5,000
Adam Sallie Mae $15,200
Total Paid – July 2013 $50,315

Emily’s credit line was a revolving loan she took on with her bank after college. Thankfully we knocked that out right away, along with the dreaded Orchard Bank card.

Short-term loan: During my first year of graduate school, my loans for the entire semester were disbursed at the beginning, and it was my job to budget my living expenses until the next disbursement in January.  As I approached Christmas my first year, I realized I wasn’t going to make it! This was one of the most stressful times of my entire life. I was worried I might not be able to go home for Christmas, get anyone any gifts, or anything else.  For the first time in my adult life, my bank account approached $0. I’m grateful that my school offered a $500 bridge loan that got me through the holidays, but it was on our snowball list when I graduated.  I definitely knew at that point that I didn’t want to be in that position ever again, to the extent that I could control it.

Prudential Insurance:  Chalk this up to the stupid tax.  My parents bought me a whole life policy when I was a baby. They paid the premiums and the policy was worth about $5000 when I was in high school. I wrecked my car during high school and had to get some repairs, and my mom suggested I borrow against this policy.  She paid the interest on the debt every year (about $30) until I was 26. I finally said I wanted to get that weight off my shoulders and paid that stupid debt back, cashed out the remaining policy amount and paid off some of our other debts. I’m glad to be rid of it.

Citi Private Loan: The hits keep coming. My junior year of college, I had the opportunity to study at Oxford University for 4 weeks during the summer. Of course my family couldn’t pay for this, so Uncle Citibank came to the rescue. It was a great study abroad program, but every month making that payment for several years so I could do a cool extracurricular was just maddening.  Thankfully we got that one eliminated.

Cars: These stories are worth a post of their own. We currently have a 2009 Ford Focus with 60k miles and a 2002 Lexus RX300 with 174k miles. We hope these cars last us until we are out of debt so we can buy our future cars in cash.

Credit card:  stupid stuff that I thought couldn’t wait, like school expenses, interview suits, a plane ticket for the holidays here and there, and suddenly we have a big credit card balance.  We’ll talk more about this as we go.

Student Loans:  Both Emily and I attended small private liberal arts schools.  She had more help from her family than I did, but we both ended up with about $15k in loans.  This May, 9 years after I graduated, I finally paid off that bachelor’s degree.

That’s the story on what we’ve paid so far! Next time we’ll get into the tsunami wall of remaining debt we have to tackle!


  • Reply T'Pol |

    You guys have already paid a large chunk of debt. I am sure, you will get rid of the rest by your target date.

    Although you need to pay debt, you are still contributing to retirements savings don’t you? I hope you do.

    • Reply Adam |

      We will talk more about retirement some time later. In short, we are contributing some but also thinking about real estate.

  • Reply Cathy C. |

    Way to go so far! That’s quite an accomplishment and you guys already seem to be very disciplined in debt payoff. I’m interested to see your remaining numbers and how much snowball you have?

    At your age, I wouldn’t get too wrapped up in worrying about contributing 15% to retirement savings. DH and I started our Roths at age 29 and contributed as we could (which wasn’t very much initially) and they’ve grown nicely over the past 10 years or so. Even if you delay until age 35, if you have no debt and are able to throw a ton into various funds, you can play catch up and still be ok.

    If you follow Dave Ramsey’s plan, based on your age,he’d tell you to defer retirement savings until those debts are paid off and then go all gazelle-like on it:)

    • Reply Adam |

      I’m glad for this testimony, always wondered if catching up is possible.

  • Reply Jackie |

    Congrats on paying off so much already! Can’t wait to see how you accomplished all of that and what your plan is going forward.

    And I agree about not worrying about a 401k just yet. I think it’s more important to be debt free first. If you follow Dave Ramsey’s plan at all, he suggests getting rid of the debt first. You guys are young enough where you can play catch up later!

    • Reply Lori |

      You all have done a great job paying off debt. Keep up the good work.

      As to contributing to a 401K, I have to disagree with the above posters to the extent that one should contribute to a 401K to the amount that qualifies for your employers’ match, if there is one. If you don’t take advantage of that, it is like leaving free money on the table.

      • Reply Cathy C. |

        Well, maybe, until you decide to switch employers and aren’t vested yet and then end up losing the employer match anyway. It’s happened to us twice now, though we did contribute up to the match and kept our own funds.

        Totally depends on the employer’s vesting terms…

        • Reply Adam |

          Great thoughts from everyone. My enployer’s vesting terms just got more favorable. But the match is pitiful. We will address this in more detail sometime in the future.

          • Lori |

            A match is a match, though. Even if it’s only 1%, it’s free money, both from a salary standpoint and tax perspective.

  • Reply Jen from Boston |

    I agree with Lori – you should still contribute to a 401K to get the match. The sooner you start saving for retirement, even if it’s a small amount, the better off you’ll be. Also, I can’t remember if you rent or own, but having a 401(K) counts as an asset when they process your mortgage application. Even though you can’t use the money to buy the home, it’s still factored in some way.

    • Reply Susan M |

      As a 50yo I agree with you 100%. After paying off debt comes kids and a home and, and, and… The expenses of debt are replaced by the expenses of paying cash and of life in general. If you think you can’t afford to contribute to retirement now then you probably won’t feel that you can do it later (at double or triple the rate you’d need to if you start now). Pay yourself first.

  • Reply Jen from Boston |

    What’s Orchard Bank? Is that a credit card from a local bank? Or is it a store credit card?

    • Reply Emily |

      Orchard bank is a credit card. I believe the company was just bought out by capital one.

  • Reply Debt and the Girl |

    Its good to meet you guys. I liked the previous blogger but its good to hear from a husband and wife team on their debt journey. Looking forward to reading more.

  • Reply debtfreeoneday |

    You’ve achieved so much in paying off your debt so far, that’s really fantastic. I’m sure that you and Emily will achieve your goal of becoming debt free on your 35th birthday!

  • Reply Holly |

    Wow! Seems like you’re off to a great start. I was great at contributing to retirement from the beginning of my career, and I just started again after taking a five-year hiatus when I divorced and just had to quit for a while…..it will take me a long time to make that up again. If you have an employer offering a match, you should probably take it. Fifty bucks a check only “feels” like about 35…..and it grows exponentially.

  • Reply theresa |

    Welcome! I am interested in your remaining numbers. I hope blogging here gives you a shot in the arm that you need to be debt free.

  • Reply paul |

    You may want to play around with a debt calculator tool to see how fast you can pay off your debt when comparing all your options. Try this calculator here. goldenfs.org/debt-calculator/

So, what do you think ?