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My wife and I have spent the first 1,000 days of our marriage paying off $120k in student loans. Fortunately, we both hold good-paying jobs and live in one of t
by iambateman 9y ago
My wife and I have spent the first 1,000 days of our marriage paying off $120k in student loans. Fortunately, we both hold good-paying jobs and live in one of the cheapest areas of the country. As a result, we can pay off an average of $3,200/month on the loan while still saving some for retirement and owning a house.
Our rate at the beginning was 6.8%.
A couple of things...
- the student loan interest tax write-off is limited to $2,500/year. The first year of paying off loans, we paid $17,800 in interest. Ergo, I had to pay income tax on the interest I paid to the government for the privilege of an education. It's bizarre to me that we incentivize going to school and then charge income tax on the interest paid. Wealthy folks get to write off all their mortgage interest on their million-dollar mortgages while we pay. It's ridiculous.
- Loan companies provide way too many attractive-looking ways to "reduce your monthly payment" by extending your loan. It's called "income-based repayment." They're creating the appearance of being helpful, while extending the loan and causing interest payments to skyrocket. I get that these services can be crucial to the financial health of some folks but the way they push them makes me uncomfortable.
- Student debt can be a wonderful, life-changing tool. There's no way my wife could have a graduate degree without it. Now she's a fantastic therapist using her considerable skills and abilities to make people's lives better. Do I wish the education didn't cost us 6% of our careers to pay off? Yes I do. But I wouldn't trade it for anything.
- It does feel like we're headed toward a cliff...a cliff where parents are paying off their own student debt while their children are racking up their own.
- iambateman 9y agoBtw, there's no way we could've paid off as quickly as we have without a budgeting tool. We use "YNAB" (You need a Budget). https://ynab.com/referral/?ref=pnPV1oqAP-ZfH0oI&utm_source=customer_referral https://ynab.com/referral/?ref=pnPV1oqAP-ZfH0oI&utm_source=c... (disclosure: referral link. If that makes you feel gross, http://ynab.com http://ynab.com) The budget allows me to confidently spend thousands of dollars each month on student loans, without wondering if I have enough to cover living expenses. Plus, most budgeting tools now will auto-import your bank stuff, which is splendid.
- gowld 9y ago> There's no way we could've paid off as quickly as we have without a budgeting tool. Yes, there is. It's how people did it before YNAB and the Internet, and it's called "don't buy stuff you don't need". https://en.wikipedia.org/wiki/The_Millionaire_Next_Door https://en.wikipedia.org/wiki/The_Millionaire_Next_Door * Spend less than you earn * Avoid buying status objects or leading a status lifestyle * Take financial risk if it is worth the reward
- maxerickson 9y ago$120K is way above average among student debt holders and you paid if off in 3 years. Doesn't that imply you got a pretty good deal? Or would you have been able to get a similar level of income without the education? It certainly isn't evidence of people having trouble paying off debt before their children go to college. (that evidence seems to exist, but your experience is pretty contrary to it...) Mortgage interest deductions should just go away entirely.
- caseysoftware 9y agoCongrats! That takes some hard work and sacrifice but it sounds like it was worth it. The mortgage interest deduction has been capped (at $750k iirc?) in the latest tax law so that should get less absurd.
- votepaunchy 9y agoThe previous cap on the mortgage interest deduction was $1M.
- ourmandave 9y agoMy wife and I have spent the first 1,000 days of our marriage paying off $120k in student loans. It's a big plus the wifey is on the same page.