How I Paid Off $22,000 in Student Loans in Only 9 Months

I cut our grocery bill in half. The grocery total would vary every month. But in January 2014, I only spent $170 on groceries -- my lowest total ever. I like to feed my family organic produce, but I had to let that go for the sake of a bigger goal.
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By Ashley Redmond, Contributor

No other country in the world charges as much for post-secondary education as the U.S. In fact, according to Bloomberg there is $1.2 trillion in outstanding education debt in the U.S. -- that is more than the rest of the world combined. So, it makes sense that many young Americans are struggling to pay off their student loan debt after they graduate college.

Take Shannon Brown, for example. She's a 31-year-old mother and blogger that runs GrowingSlower.com. When she graduated with an architecture degree from the University of Idaho in 2007, she and her husband combined had about $60,000 worth of student loan debt.

They plugged away and paid the minimum payments for a few years. But in September 2013, Shannon decided that she'd had enough. She was still six years away from paying off the loan, and with a growing family she knew it was time to start saving money for her family's future.

She set a goal to pay off the remaining $22,000 of debt in 25 months. She paid it off by May 2014 -- and it only took nine months.

How did she do it? Read on to find out.

GOBankingRates: Did you feel like you were drowning in debt?

Yes, and it was frustrating because it was student loan debt, not consumer debt. And my husband and I felt stuck at $22,000. We had been making the minimum payments since graduating from school six years prior. And we went to state school -- imagine if we had gone to a private college.

What was your 'aha!' moment when you realized that it was time to tighten your belt?

I had been trying to budget for a long time because my husband and I wanted me to stay home with our kids. So, I signed us up to Mint.com to help automate our budget. You can connect all your bank accounts and credit cards, and track your spending.

I remember seeing it for the first time and thinking, "Oh my Goodness, we live so close to the edge." We were living paycheck to paycheck, and I told my husband if we want to travel or own two cars that just isn't feasible at our current pace.

What resonated with you about Mint.com?

It has nice graphics that show you exactly what you're spending and where. Green is your income, and red is your spending. And it's broken up into categories, such as income, shopping and personal care. For example, my grocery category was red, so I knew I was overspending there.

I also incorporated Dave Ramsey's Monthly Cash Flow Plan into making our budget. Here is a breakdown of our budget during the nine months that we paid off our debt:

  • Charity: 1%-2%
  • Savings: 0%
  • Housing: 15%-20%
  • Utilities: 6%-10%
  • Food (groceries and restaurants): 3%-20%
  • Clothing: 1%
  • Transportation: 2%-4%
  • Medical Health: 4%-27%
  • Personal: 4%-24%
  • Recreation: 0.1%-0.5%
  • Debt: 23%-77%

There's a range of percentages because life happens. For example, the first month we paid the midwife for the birth of our second child, so you'll see a big variation in the health category.

What was your lifestyle like right before you paid off your debt?

It was not extravagant. We were just meeting our family's needs at that time. My husband was working full time in Seattle as an architect, and I was taking care of my children and working on a freelance basis as work came my way -- either architecture projects or blogging assignments.

What was your first step?

My first step was realizing that even a small change could make a big impact. My family was technically living on a low income at the time, so it was hard to cut corners. We already had cheap rent and were living in a 730-square-foot home with our children.

I decided to allocate $39 a month to our debt because after doing some calculations online, I realized that even that small amount was going to cut several months off of our debt payment timeline. I set up an automatic banking payment for that amount every month, and that way it's done for you.

What sacrifices did you make?

We were already frugal, but we continued to have one car. My family did not travel in our car for more than 40 miles from home to save on gas. My husband started commuting to work as part of a park-and-ride program. We lived in Washington at the time, and he would commute on a shuttle bus and his company agreed to pay for the monthly pass.

I cut our grocery bill in half. The grocery total would vary every month. But in January 2014, I only spent $170 on groceries -- my lowest total ever. I like to feed my family organic produce, but I had to let that go for the sake of a bigger goal.

Here are a few tips that helped me get some fresh ingredients into our family's diet:

  • Meal planning for the week
  • Price comparisons between stores (online and inside local grocery stores)
  • Pick your own produce. You pick fruits and vegetables during peak season for a reasonable price, and then you freeze or can the food for the rest of the year. You can make jam, jelly, fruit preserves, salsa -- the opportunities are endless.

Also, anything that would break in my house, I didn't replace. When our bathmat unraveled we used an old towel instead.

What challenges did you face?

Realizing that I could not pay off our debt as fast as I wanted if I didn't increase my income. I had already been working from home as projects came my way, but I set new goals and intentionally took on more projects. I gave up sleep to grow my blog and do more architecture projects. I opened an ETSY store -- I did anything I could to make more money and put it all toward our debt.

Now I tell people, "If you want to make progress on your debt you may have to find creative ways to increase your income." You can buy and sell items online through Craigslist or Kijiji. Or, you may have to take on a second job.

What's the best part of paying off your debt?

My family was able to move because of getting out of debt. Within a couple of months we made the move from Washington to North Idaho to be closer to family, so my kids could grow up with their grandparents. We were also able to rent a bigger house and purchase a second car.

And we even topped up our six-month emergency savings fund. It was fairly easy because we were already in savings mode. Plus, we met our end goal of having me stay home with our kids.

Any money plans for the future?

Yes! Saving for retirement, family vacations and, hopefully, in the future saving for a house.

What advice do you have for others who are in a similar situation battling debt?

The biggest thing would be to get started. Try paying off your smallest loans first because having that taste of success motivates you. And of course, sticking with your financial plan and remembering that it's only for a little while ... you have so much more freedom once you are debt-free.

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