Our Debt Reduction Story

Student loans and other debt is crippling if you don't have a plan in place. It can still feel incredibly daunting at that point but trust me, little by little you will gain strength and feel like you can take over the world if you do.

We started out with approximately $40,000 in student loan debt combined. We managed to come out of school with a relatively low loan amount but little or small, this is still a LOT of money. My loans went in to repayment in November 2010. Gary's went in November 2011. For a few years, we simply paid the minimum plus a little extra to all of our loans. To this day, I very much regret paying on our loans this way.

Why? This is a perfectly acceptable way of paying off debts but in no way shape or form is this the best way or most motivating way. I honestly feel that if I had practiced our current debt reduction plan back in 2010, we would have been rid of our student loans by 2013. Seriously, this made me really pissed off for quite awhile. It was hard to shake that feeling of deep regret. At this point, it's more now just annoying to think I have to work so hard now when I could have been done already.

But not exactly. Life happens. We had credit card debt. We bought a brand new car in August 2013. We've recently done renovations. Approximately $38,000 more financed using debt. These were all choices that we made and understood would prolong our debt reduction plan. Back in May 2014, I posted this picture and comment:

5 out of 12 school loans paid in full! Our goal is to have the rest paid off by Fall 2016!

I'm happy to report that this was before we had a remodel loan but we still plan to be rid of all these debts by the Fall of 2016. That's what I'd call #aggressivedebtreduction!

Old Debt Reduction Method Explained

Like I previously mentioned, for a few years, we simply paid the minimums with a little extra that went towards all our loans.  I had eight separate federal loans and Gary had four. By having our payment spread out among all of loans, it was a very, very slow reduction. Granted, faster than if we were simply paying the minimums but this wasn't much better. Example, we hung on to three loans that were less than $500 for three years. That's just ridiculous! It wasn't in the least bit motivating to pay this way because you can't see much of a decrease in any of your loans. Motivation is how you can get out of debt more quickly!
I didn't pay much attention to this until we got pregnant with Owen in 2013. That's when I discovered our new method of debt reduction.

New Debt Reduction Method Explained

We've used what is called Avalanche method. We now pay the minimums on all our loans and put all of our extra loan payment money to one loan. More specifically, the loan with the highest interest rate regardless of balance. For us, that was our credit card debt. Because those rates are ridiculously high, that had to go first. Then came our student loans with rates 6.8% down to 4.25%. Our remodel loan is at 4.25% so that will be next followed lastly by our car loan. Using this method, it is not suggested to add in your house loan if you have one of those. Once a loan has been paid off, you take that minimum payment and add it to your extra payment. That's what creates the avalanche. Each time you get rid of a loan, add what you were paying on that to your next loan payment.

If numbers make more sense to you, let's say you have $500 in minimum payments. You want to put an extra $500/month towards that first targeted loan. For the duration of your debt reduction journey, you'll always pay $1,000 a month but the amount you put towards each loan will gradually increase as you pay loans off. Loan A has a minimum balance of $50. When that gets paid off the next loan in line will receive an extra payment of $550, up from $500. Make sense?

By targeting one specific loan at a time, it is quite motivating. Using a worksheet downloaded from this website, we can see at a glance when all of the separate loans will be paid off depending on how much extra we have to put towards the debt. I play around with this so much it's crazy. I had a realistic approach saved and then also a crazy wishful thinking approach as well. I followed the realistic approach until May 2015. Once we started paying for two kids in daycare, I realized we should get out of debt as quickly as possible. That moved us to the crazy wishful thinking approach, hence my second job at Rubaiyat!

My suggestions are literally to do whatever possible to get out of debt ASAP. Think 24 months or less. Take a second job, live on a teeny tiny budget, use apps like ibotta and PactApp to save money on everyday things and activities. Again, I wish so very much that we had done this sooner without kids. Talk about busy!

What we are putting towards debt
*Every single penny I earn from Rubaiyat
*The extra money from both of our pay increases at our day jobs
*A fixed dollar amount extra from our regular budget
*Money earned from ibotta, Checkout51, PactApp, ebates

Debt Reduction Timeline

Credit card debt - eliminated November 2013
Vanessa's student loan debt - eliminated fully in August 2015 (4 years, 9 months)
Gary's student loan debt - eliminated fully in September 2015 (3 years, 10 months)
Remodel Loan - projected completion date: April 2016
Car Loan - projected completion date: July 2016

If you want my help with the worksheet, please don't hesitate to ask. You can facebook message me or email me at vanessa.wiest11@gmail.com.

Good luck with your own Aggressive Debt Reduction journey!


Baby Jack {Six Months}

What a fun month it has been! Jack recently turned six months old and is such a lovable rolly polly little guy.

Likes: kicking and squirming about, waking up reallllllly early, snuggling, watching his big brother, listening to people singing and being danced around, talking, making low almost-like-hissing sounds, tracking (& recognizing) our voices and movements and lights, watching everything, giggling, blowing raspberries, sticking out his tongue, grabbing anything and everything in sight, putting things in his mouth

Though we're all still pretty sleep deprived, I do feel like we made a step in the right direction. We finally took away the swaddle a few weeks ago because Jack seemed to do slightly better without it. Though it's still pretty inconsistent, he went one night of waking only once, another only twice, and then of course others a solid three or four times. I'll take the one to two wake ups any day. Sadly, little Mr. also started cutting a tooth this month so there goes any sort of chance for a full night's rest! With our remodel coming to a close, I am anxious to move Jack's crib downstairs. I'm thinking we'll need to buy a partition of some sort to keep the light out of the play-area-turned-nursery. Actually, now that I'm typing this, we might have exactly what we need! We're going to put in a permanent shower curtain rod so we could use the tension rod here instead. Great idea, Vanessa, great idea.

Yes, I did mention above that Jack has his first tooth! His lower left central incisor was the first to come in and it was noticed by complete surprise. I went up to him to cup his face and say, "YOU ARE SO DARN CUTE!" and immediately squealed when I saw it a week ago! I'll admit, I figured one would come pretty soon since he just very recently had an ear infection. Hope he isn't one of those kids that gets an ear infection with every tooth! Yikes!

Another fun development - rolling over both ways! For a few weeks, Jack could only roll from back to tummy...........buuuuutttttt, he can now roll over both ways! I noticed he was rolling both ways on his playmat pretty well just a few days ago but I'm fairly certain he can't figure it out when he's half asleep/frantically crying in the middle of the night. That would be helpful :)

Rice cereal also started this month. More specifically, last week. With how easily he seems to do, I'm guessing he could have started a couple weeks earlier. Oh well. I'm excited to start real food with him but hope to have enough energy and motivation to make it myself. That was so gratifying with Owen and I would love to do that for Jack too. I've got green beans, carrots, and broccoli in our fridge right now so looks like that's what we'll start with this time!

6-Month Appointment (9/8/2015)
Weight: 17 lbs 6 oz
Height: 26.5 in

5-Month Mommy Guesses

Weight: 16 lbs 1 oz
Height: 26.25 in
4-Month Appointment (7/7/2015)
Weight: 14 lbs 13 oz
Height: 25.75 in
3-Month Mommy Guesses
Weight: 13 lbs 9 oz
Height: 24.25 in

2-Month Appointment (5/8/2015)

Weight: 12 lb
Height: 23.75 in

Mommy-wants-a-weight-check-kinda-visit (5/1/2015)

Weight: 11 lb 9 oz

Add'l Doctor Visit (4/16/2015)
Weight: 11 lb 

2-Week Appointment (3/26/2015)

Weight: 9 lb 8 oz
Height: 21.5 in

Newborn (3/6/2015)                  
Weight: 8 lb 14 oz           
Height: 21.5 in


Addicted to Busy & All Sorts of Crazy

These two phrases perfectly describe our life right now.

All Sorts of Crazy describes our life with two littles under the age of two. Because really, who in their right mind decides to have two kids so close in age? Well, WE DID! I absolutely love that Owen and Jack are so close in age. I can tell without a doubt that Owen loves his little brother and that may be one of the cutest things. Jack, too, is enamored by what Owen does since he's always moving or talking. I have high hopes that they will become the very best of friends.

Buuuttttt.......having two littles under the age of two is simple put - ALL SORTS OF CRAZY! It's a struggle to do quite a few things but I'm finding that it's all about routine and how you choose to respond to any given situation. Patience is key and I'll admit, I sometimes (or a lot of times) run out of that pretty quickly. Owen recently learning how to climb out of his crib is a major struggle; Jack not sleeping through the night is a serious struggle.

This is what we've signed up for and we are braced for the challenge. Major meltdowns, potty training, paci weaning and a little tot that will soon learn to walk - bring it on!

Addicted to Busy
is another phrase that perfectly describes our everyday life.

Let's be real, loans suck. I recently took a position in not one but two different places. One, my full-time day job at Luther, is pretty awesome. I love working with spreadsheets and numbers and sitting at a desk. I also love working with students and getting to interact with them.

But do our two full-time day jobs do the trick in us paying down our debts as aggressively as we'd like? Of course not. Two littles in daycare really does a number on our budget.


So, in comes my second job at Rubaiyat, a local restaurant. I love that job for the night hours, the consistency, meeting tons of pretty cool people, and making good money in a short amount of time. To get the most out of that position, I'm trying to work as much as I can. Gspice is a pretty sweet dad and takes care of the boys while I am away at night. THIS allows us to pay debt down in the aggressive manor we'd like. In the past month alone, we paid off two student loans!

Yes, I will admit, our life is a little out of control right now. However, we're both fully aware and accepting of it. The boys will keep us on our toes for awhile but that'll eventually simmer just a little bit. We'll eventually pay off our loans (GOAL: less than a year from now!) and I won't have to have a second job and Gspice won't have to be a single parent.

We'll get there!


Little Mr. {21 Months}

Owen has been such a fun little guy lately and recently turned 21 months old! Though I'm more busy than I have ever been in my entire life, I thought it'd be nice to provide a short and sweet update on Little Mr.!

I truly have NO idea what Owen might weigh. He eats like a grown man but still looks like he always has - small and petite. His use of spoons and forks have gotten really good too. Not so much with soup but that'll come. I'm definitely looking forward to his 2-year appointment - not for the shots but to see how much he's gained and grown. I heard that you will get a general idea of the height as an adult by doubling the height they are at two years old (some have also said three but I think for my kids it might be the two). Crazy! Owen has absolutely no chance to breech 6'. Sorry, bud.

Certain developments have been really fun to watch. Though he still isn't saying too many words yet, he's definitely saying more than a few short months ago.

18-Month words: 
mama (still not nearly spoken as much as dada)
kitty (which sounds more like titty....)
buh bye

new words at 21-Month: 
please (sounds like "peas"; he also does the sign for this as he says it)
down town
all done

Watch the video below to see Owen's sweet skills :)

Other developments have been a bit more challenging. Teething! This time = upper canines! They finally popped through in August and are slowly making their appearance. Owen also loves to say "No". Most questions get answered with a pretty strong "No". Not super difficult to deal with but definitely something we are working on. I'd love to hear "Yes" more often :)

Also, it seems that the past couple of months that Owen much prefers to be held. He used to LOVE walking. I could go on a mile long walk and he'd want to walk the entire way. Now, we go a couple of steps and I have this little dude whining to be picked up. I then try to get him to say, "Up, please" but all I get is more whining. One day we'll get there, Owen. One day.

Beyond that, it's been busy busy busy! Owen is a fun loving little man and we love him to pieces!