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|
|Citi Private Student Loan||$3,070|
|Emily Dept. of Ed.||$7,000|
|Emily Sallie Mae||$6,350|
|Citi Credit Card||$2,400|
|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!